Question

Discuss about the Indian economy during the British Period.

Answer 1

Britain had exploited India over a period of two centuries of its colonial rule. On the basis of the form of colonial exploitation, economic historians have divided the whole period into three phases namely the period of merchant capital, the period of industrial capital, and the period of finance capital.

1. Period of merchant capital (1757 to 1813):
   The only aim of the East India company was to earn profit by establishing monopoly trade. India was considered the best hunting ground for capital. By attaining political power the objective of monopoly trade was fulfilled. The company administration succeeded in generating huge surpluses which were repatriated to England.

    

2. Period of industrial capital (1813 to 1858):
   India had become a market for British textiles. Indians were exploited by fixing the low prices for exports and high prices for imports. India’s traditional handicrafts were thrown out of gear.

    

3. Period of financial capital (Late 19th century – 1947): Finance imperialism began to entrench. Britain decided to make massive investments in various fields by plundering Indian capital.

    

4. The land tenure system in India: Land tenure refers to the system of land ownership and management.
   The Zamindari system, the Mahalwari system, and the Ryotwari system were the systems of land tenure introduced by the British.

    

5. Problems of British rule: Their profit motives led to the drain of resources from India. The handicraft industries were collapsed.
   The British rule stunted the growth of Indian enterprise. Capital formation in India was retarded.