Economic Impact of British Rule in India: The British conquest had the most pronounced economic impact on India and that is because of the structural changes in the Indian economy.
The major difference between British colonists in India and earlier invasions was that none of the invaders made any structural changes in India’s economy. None of the earlier invaders drained India’s Wealth.
The foremost economic analyst of India, Dadabhai Naroji, The Grand Old Man of India’ put forward the theory of economic drain in Poverty and UnBritish Rule in India. In his theory, Dadabhai Naroji asserted “It is not the pitiless operations of economic laws, but it is the thoughtless and pitiless action of the British policy; it is the pitiless eating of India’s substance in India, and the further pitiless drain to England; in short, it is the pitiless perversion of economic laws by the sad bleeding to which India is subjected, that is destroying India.”
Economic Impact of British Rule in India: Ruin of Artisans and Craftsmen
There was a quick collapse of the handicraft industry. The collapse of urban handicrafts was caused largely by competition with the cheaper machine-made goods imported from Britain.
The Charter Act of 1813 imposed a policy of One-way free trade on India. Indian goods made in old and primitive ways could not compete with the goods produced en masse by powerful machines. On the other hand, Indian products found it more and more difficult to enter the European markets.
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The ruin of Indian industries proceeded more rapidly when the railways were built and started operating.
The railways enabled British manufacturers to reach the traditional industries in the remotest villages of the country. American writer D.H Buchanan, has put it, “The armor of the isolated self-sufficient village was pierced by the steel rail, and its lifeblood ebbed away.”
Apart from the foreign influx of foreign goods, there were some other factors also which were arising from the British conquest. All of these factors led to the ruin of Indian industries.
The oppression practiced by the East India Company on the craftsmen of Bengal during the second half of the eighteenth century forced them to sell their goods below the market price and to hire them below the existing wage. A large number of craftsmen have abandoned their professions.
Tariffs of nearly 80 percent were imposed on Indian handicrafts which also led to the ruin of Indian artisans and handicrafts.
The tragedy was heightened because the fall of traditional industries was not accompanied and prospered by the growth of the modern machine industries.
Consequently, the ruined handicraftsmen and artisans failed to find alternative employment. The only option left with them is to crowd into agriculture.
Thus, the British conquest led to the de-industrialization of the country and the increased dependence of the people on agriculture.
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Impoverishment of Peasantry
Economic Impact of British Rule in India: The peasants were also progressively impoverished under British rule. In both Permanently and Temporarily Settled Zamindari areas, many old peasants were left to the mercies of the zamindars who raised rents to unbearable limits which compelled them to pay illegal dues and to perform begar.
The condition of the cultivators in the areas belonging to Ryotwari and Mahalwari was also worse. The government replaced the zamindars and levied high land revenue.
The peasant would get little economic return for his labor. The government spent barely on improving agriculture.
It devoted almost its entire income to meeting the needs of the British-Indian administration, making a direct, and indirect tribute to England and serving the interests of British trade and industry.
The rigid manner of land revenue collection further heightened the harmful effects of its demand. The land revenue had to be paid promptly on the fixed date, even if the harvest had been below normal or had failed completely.
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Economic Impact of British Rule in India: The government would put up peasants’ land on sale to collect revenue whenever he failed to pay land revenue.
The inability to pay revenue compels the peasant to borrow money at high rates of interest from the moneylenders. But once in debt, the peasant found it impossible to get out of it.
The growing commercialization of agriculture also helped the money lender to exploit the cultivator.
The peasant because of poverty was forced to sell his produce at a lower price. The peasantry was under the pressure of a triple burden of the government, zamindars, and money lenders.
Stagnation and Deterioration of Agriculture
Economic Impact of British Rule in India: Overcrowding in agriculture, excessive land revenue demand, growth of landlordism, increasing indebtedness, and the growing impoverishment of cultivators, made Indian agriculture stagnate and even deteriorate.
The government could have helped improve and modernize agriculture but refused to recognize any such responsibility.
The burden of taxation was majorly on the shoulders of the peasant. The government spent only a tiny part.
At the time when agriculture in the entire world was getting modernized, Indian agriculture was stagnating. Hardly any modern machinery was used in agriculture.
Poverty and Famines
Economic Impact of British Rule in India: Regular famines became a common feature in India. The famines occurred because of the food grain security which was the result of poverty. The poverty was unleashed by the British colonial forces.
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