Question

Discuss the economic impact of British Rule in India.

Answer 1

There are three phases under the colonization of the Indian Economy.

• Phase I Mercantilist Capitalism

 

1. Before it gained dominion in India, the East India company carried on a very profitable business selling Indian – made cotton textiles and silks and printed cloth.
2. It was during this period that the textile lobby in Lancashire and Birmingham succeeded in making the Parliament enact a law prohibiting the import of Indian textiles.
3. Those who were found in possession of or dealing in Indian cotton goods were fined 200 pounds.
4. The company acquired the Diwani right in 1765.
5. East India Company crushed every industry which came in conflict with British industry. The ship building industry collapsed manufacture of paper and glass dwindled.
6. India which had became the ‘Lancashire of the Eastern World’ began to lose its Position.

• Phase II Industrial Capitalism

1. By the beginning of nineteenth century the Company had emerged as a territorial power.
2. During this period India was converted into a market for British textiles and a great source of raw materials.
3. Home charges were special types of contribution which were used by the British government for meeting various types of expenses for maintenance of the colony.
4. These consist of payments of pensions and salaries of British people staying in India and industries earned on external debt of India.
5. Surphases from the trade were used for making these payments.

• Phase III Financial Capitalism

1. The company government decided to make a massive investment in railroads, the postal system, irrigation, modem banking and education with its surplus capital.
2. All these investments were made for the benefit of the British. The railways helped to move British troops quickly across the country as well as enabled the conquest of the Indian market to the maximum extent.
3. The Company, supported by the English Parliament, encouraged British investment in railways with a guaranteed annual interest of 5 percent.
4. Mining companies were given for nominal fees and low royalties.
5. Land for cultivation of coffee, tea, pepper and rubber was given at a throwaway price.
6. Removing slavery in 1843, introduced indentured labour.