Economic Impact Of British Rule In India
Prior to Britih colonial rule, India was well known for its handicraft industries coping with silk and cotton fabrics, metal and precious stone functions, etc.. These products manufactured in India needed a worldwide market as a result of fine quality of material used and high standards of workmanship employed from the products that were exported.
The policies followed by the company rule caused a basic change in the structure of the Indian market, transforming India into a provider of raw materials and a customer of finished industrial products from Britain.
With the arrival of British colonialism in India, the economic policies adopted by the British were concerned about the protection and promotion of their financial interests of their own country instead of the development of the Indian market under British rule.
The financial effect of British rule in India can be examined under these stages to estimate the full meaning of British rule.
The initial stage was: Mercantile development (1757-1813)
It dictated the terms of commerce in its dealings with all the traders and retailers of Bengal. The Company imposed inflated costs of goods resulting in adventurous capitalism where the wealth was generated by the political clout of the British traders.
The second stage was: Industrial phase (1813-1858)
Impact of British Rule on economic conditions:
- The British rule stunted the development of Indian business.
- The economic policies of the British assessed and retarded capital formation in India.
- The Drain of Wealth funded capital growth in Britain.
- Indian agricultural industry became stagnant and dropped even when a large part of the Indian populace was dependent on agriculture for subsistence.
- The British rule in India directed the meltdown of handicraft industries without making any significant contribution to the development of any modern industrial foundation.
- Some efforts by the colonial British regime in developing the Plantations, mines, jute mills, banking, and shipping, mainly promoted a method of capitalist firms that were handled by foreigners. These selfish motives led to an additional drain of resources from India.
Fiscal Roast or Drain of Wealth
Following were the component of ‘Drain of Wealth’
- The money extorted by business servants from several staples, zamindars, retailers as well as the common man was delivered to Britain.
- The Duty-free exchange provided to the British producers gave them a competitive edge over the Indian dealers.
- The remittances and wages alongside different incomes sent to England by company officials working in India.
- ‘Home prices’ were the cost of wages and pensions of the firm officials in India, that were charged on the treasury of India.
- Hefty interests were paid to these British investors resulting in drain of riches.