ECONOMIC

CRITIQUE OF
COLONIALISM
• Moderates- were 1st to develop an economic crtique-
m
co
• This was their most important contribution ma
il.
g to the
@
development of national movt in india. an
a ray The themes built
w.n
around laid the foundation through sa
nje e lectures, pamplets,
o r
newspapers, songs. n ly f
O

• The process of disillusionment -1860

• 3 imp- naoroji, mg ranade, romesh chandra dutt- economic
history of india.
• They delineated colonial structure- four aspects of domination-
• 1) trade- distorted pattern, tariff policy, role aof om
il.c raliways
gm
n@
• 2) industry- role of foreign capital n ara
ya
.
ew
nje
• 3) finance- taxation policy fors
a
ly
On
• 4) expenditure pattern- high expenditure on army and
bureaucracy
TRADE- THE DISTORTED
PATTERN
Capitalism no longer functioned through the crude tools of
plunder & tribute, but through the more disguised om & complex
a il.c
gm
mechanism of free trade and foreign capital
ya
n investment.
@
ra
w.na
The essence of 19th century colonialism e
s an
je lied in the
o r
n ly f
transformation of india into a supplier of food stuffs & raw
O
materials to metropolis, a market for invest of british capital
& british made goods.
Nationalists said that bcoz of the adverse impact of trade on
indigenous industries, there was a progressive decline of india’s
traditional handicrafts.
British pointed with pride about the increasing volume m
of foreign
c o
trade & the rapid construction of railways- as ail.
gm sign of economic
@
development, but the nationalists pointed y anout that it was not the
r a
w.na
volume but its pattern/nature of goods s an
jee internationally exchanged
for
& their impact on national industries
On
l y & agri.
In trade the bias being overwhelmingly towards the export of raw
material & import of manufactured goods
Railways- nationalists pointed out that the railways had not been
coordinated with india’s industrial needs.
• The railways principally opened up the indian hinterland as a vast market
to british made goods, om
a il.c
• the railways tarrif policy was such that it wasan@much gm cheaper to transfer
r a y
goods from indian port cities to smallerewtowns .na (goods imported) rather
je
than transfer goods manufacturedfowithin an one part of country to other
rs
l y
location- On

• moreover the benefits of railways construction- ie in terms of

encouragement to machine industry & capital investment went to british
industries.
 m
il.co
gma
@
A major obstacle to rapid industrial develop ya
n
ra
was the policy of free
n a
ewhand ruining india’s
.
trade which was which was on the one je
an
rs
handicraft & on the other forcingnlthe
y f o infant & underdeveloped
O
modern industries into a premature & disastrous competition with
the highly organised & developed industries of west.
INDUSTRIALIZATION- FOREIGN CAPITAL
The nationalists agreed with remarkable unanimity that the
complete economic transformation of the country on the basis of
modern techno & capitalist enterprise was the primary co
m goal of all
a i l .
economic policies. @
gm
n
ya
ara
At the same time, they were all clear that ew
. n however strong be the
a nje
s
need of india for industrialization,lyitforhad to be based on indian &
O n
not foreign capital.
While birtish said that foreign capital was a precondition to national
advancement the nationalists pointed out that foreign capital
created vested interests which demanded security for investors &
perpetuated foreign rule.
 FINANCE- TAXATION POLICY
Nationalists criticized the colonial pattern of finance, taxes were so
raised that they overburdened the poor, while letting the rich foreign
capitalists & bureaucrats free.
m
il.co
regressive taxation policy- nationalists demanded ma g the reduction of
a n@
ra y
land revenue & abolition of salt tax and wthe .na imposition of income tax
jee
& import duties on products which othe s an rich & middle classes
l y f r
consumed. On
EXPENDITURE PATTERN-ARMY
• The pattern of expenditure was such that it was meant to serve
imperial interests, in particular
• the high expenditure on army which was used om by the british to
a il.c
conquer & maintain imperialist control over @
gm large parts of asia
an
ay
& africa. w.n
a r
e
anje
• Expenditure on bureaucracy-nlyhuge
fo rs
salaries paid to european
O
officers which were repatriated back to their home states in
Europe.
 THE DRAIN THEORY- NAIROJI
• The focal point of the nationalist critique of colonialism was the
drain theory. The nationalist leaders pointed out that a large part
of capital & wealth was being drained to britain in m
the form of
co
salaries & pensions. m ail.
g
@
yan
• The drain took the form of excess of eexports
ara
w.n
over imports for
nje
which india got no economic or material
fo r sa return
ly
On
R.c dutt- the taxation raised by a king, is like moisture being
sucked up by the sun, to be returned to earth as fertilizing rain;
but the moisture raised from indian soil now descends as
fertilizing rain largely on other lands, not on india., om econmic drain
a il.c
has reduced india to a land of famines-more @ frequent, more
gm
y an
widespread & more fatal than any known . n ara before in the history of
w
jee
india/world or
s a n
ly f
On

Moreover, the drain theory possessed the great political merit of

being easily grasped by a nation of peasants- “no drain” became a
political slogan
DRAIN THEORY- UNDERMINE
HEGEMONY
The agitation on economic issues contributed to undermining
ideological hegemony of alien rulers over indian il.c
omminds- that is the
m a
idea of benevolent colonial rule in the minds an
@
gof people- ie british
r a y
intend to work for the welfare of indians.
e w.na
anje
rs
fo only in physical but also in
The secret of british power liedOnot
nly
moral force, the nationalist economic agitiation gradually
undermined these moral foundations
The corrosion of faith in british rule inevitably spread to the
political field, the nationalists linked every important economic
question with the politically subordinated status of the country.
om c
the result was that while early nationalists were m ail. moderate in
g
n@
political method- they cut at the politicalararoots
y a of the empire &
. n
sowed in the land seeds of disaffection,
je ew disloyalty & even sedition
an s
for
Only
CONCLUSION-
Early nationalists were laying strong, enduring foundations for the
national movt to grow upon. They sowed the seeds well & deep,
they did not base their nationalism primarily on appeals to
m
abstract or shallow sentiments- like religion, caste
ail.
co etc.
gm
n@ a
They rooted their nationalism in a brilliant a ray scientific analysis of the
e w.n
complex economic mech of modeern r sa
nj colonialism & on the chief
e
o
contradiction b/w indian & british
n ly f interests.
O
Nationalists of 20th cent were to rely heavily on this economic
critique of colonialism, these themes were to reverberate in indian
villages and cities carried forward by youthful gandhian agitators,
thus serving as the basic foundations on the basis om of which mass
a il.c
gm
movts were launched at a later stage. ayan@
r
w.na
e
At the same time, bcoz of this firmr sfound,
an
je they would not, unlike
f o
china, egypt and many other colonial
On
ly countries waver in their anti
imperialism.