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    British Economic Policy & Its Impact in India

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    British Economic Policy & Its Impact in India

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    Economic impact of British rule in India

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    Economic impact of British rule in India

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    23 views7 pages

    British Economic Policy & Its Impact in India

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    yashwantvinzuda98
    Economic impact of British rule in India

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    of 7
    Role The impact of British policies pecoming visible only ater the death of Mughal ler ‘Aurangzeb. on the Indian economy started “The generous concessions given by he successive Mughal rulers tothe med the trots of the hdigenous rede. The Bish established their monopoly on Indian trade after the battles of Plassey (1757) and Buxar (1764). As 2 result, the Indian economy: transformed from @. surplus and self-reliant economy to a colonial economy, fr colonial economy was to obtain raw materials then European traders hat “The objactive ofthe Bi for their industries from India ar 11 aspects related tothe indian economy ony ind sell their products in the Indian smarkot The Bilsh used a to full herinterests, As country to an importing country. Various stages of British colonialism in India inder which ‘a result, India changed from an exporting Colonialism is an expansionist concept, Ut there is economic exploitation and oppression of a country. ‘Under this, one nation controls the political, economic, social and cultural sspucture of another nation. The controling county is called ‘mother country’. Thus, the main goal of policies made within the ‘colony is to benefit the mother country (colonial power). From this point of view, the Brish made various potcies from time fo time to get economic benefits from their Indian colony. British colonialism in India can be divided into three phases. First phase of colonialism: commercial ‘Stage of capitalism (1757-1813) ‘Ajo the Battie of Plassey in 1757, Englands East India Company ‘estabished dominance over Bengal ts rom nere that Bish clersm pinta is considered tobe the beginning. | «nthe fst phase of colonia, the entire focus ofthe Briish Company -was on economic plunder. Asa result, inthis phase they had to fight ran wars wy Porugvse ssh and enh eomparies wad monaeh “Tne man objecvs ofthe ish nts asa were ws lls ‘© To monopolize India's trade. + Gaining revenue by establishing polticalinfuence , + Buying goods at minimum prices and selling them ‘at maximum prices in Europe. + To oust its European rivals by any means possible. «Ean prof hough capil invest (Here copa NESTE means the company making profit by purchasing Indian goods from te revenue nfact received from Bengal and exporting them to Europe: through this, now paople from England are coming to buy Indian good ‘There was no need fo bring money. «To obtain capital without making any fundamental changes in he Incian edminitraton, customary jus aws,transper, communicator and tre campony gear cn moos pee cna meat 2 PST economic funds, ter te Bate of Plassey, the Company estbisned “omploe con over te goverment care ofthe conauered teas (Ben Bina, Orissa ete) «etic economic pofcy led othe decine of ndusbes. As 2 esut, agriculture became the only source of national wealth and most ofthe emulation began to depen on agriculture. spe acar tne ro ener seedy BRAN he ‘and were exported to England and Europe inthe frm of precious melas, _Te lune ofa was an indirect source of capital arcumuaton in Endane “Thus, the only objective of the company in the first phase of conan was to somehow lot the wealth rom hee. The famous Brith historian Percival Spear commented, "Now began the period of open and shameless plunder in Bengal The famous Indian historian K-M. Pankkar has called the period from 1765 to 1772 the ‘Dacolt State: Second phase of colonialism: Industrial capitalism (1813-1858) + 1n 1813, the company's monopoly on Indian trade, “Thereafter a new form of exelatation of Inia by industrial capitals jag in mind the srl ended, emerged. n this phase, policies were made kes revoluon that took place n England n fact, industries wore established on lage seal in England «tis known that between 1765 and 1785 many scientific inventions. were made, such as spinning machine, steam engine, Power Jom, waterrame etc Mth the establishment of industries, on ane hand the need for raw materials and food grains was felt, while on the other rand there was @ need fra large marke ortho sale of factory made pfoducs, Asa result, offi hese objectives the British pamatecnew pc «¢ policy of free trade towards India PY 4 the policy of fee trade towards te «Britain adop! 3 The company's trade monopoly ort 23h th Caer Ac Irian eniory ended excopt fortes anatrade wth Cina ns sina the doors of nia were opened for ver Bish 1 atfls and Now nda has beoome a mere exporter of raw materi importer of frished goods. any aso « nno'1813 in tion 16 adonal exports, te Company Inpoted ee ches enn ata der expres toes also ichided interest on Indian loans, Thus, India's odin omen tg Toa wt by @ British offical (John Sutivan) who said "Our aystem eck sponge. sing Up every good hing Kom he banks of the Ganges an agvezn ct aan on te bark of to Thare. _ Mer the company’s trade monopoly ended, British-made ‘athe stata boing sono Insan mae a cheaper coals, Thos cole Compete with the cheap prices of + Indian textile industry declined, “Wf ho ain of changing the economic sactor and ncreasng precueton of ‘se moter, the rts stated experiential management At eet, "sew 7s Ie Ferman Seton, Rye Setemar wer ede hs woh | __“membeing Inala on one han the PemanentSetlement nasa pat ‘Fe far eoctng ply ofthe Bt. on he te and he Ryan eaten Was the peak of exploitation ofthe indian farmers, ~ Now more commercial rops are being grown in the country Instead of food crops. As a result, grain prices increased due ‘a shortage oF grains inthe county. * An important achievement of this phase was the ‘development of ralways'. However, railways were developed not for the | Brog-e8 of Inia but bacauso of the svalegic and economic needs o the Brtsh. This because tere was 9 nad or devlopment of anspatation ‘means in the country for export of raw materials from Inia and import of goods produced in Britsh factories and its ‘The sevond resson fo its development was o transport he ‘army to far-flung aréas forthe security ofthe Bitch Empire, so that ‘279 rebelion against the Exish Empire could be crushed without any delay. Result + To promote export of ran mate's, phe ws li on commen of agriculture, in which farmers were forced to »==* Indigo, cotton, opium, tea, jute, coffee ete. As a result, food ‘shortage started inreasing in Idi + Emphasis was laid on modem westem education, which led to ‘neaiaty We nde econ system, *xpensive clothes could n} English clothes. As a result * Indian handicraft cottage industry began to deciine. Due to the ‘estrucon orindustries, poverty, unempleyment, starvation ec. increased in India, important statement Karl Mar-"The clothing house of the world was filed with foreign clothes.” ‘Lore Wiiam Bentinck: "The land of aia became wl vith the bones ofthe irae ee development of raiways History In 1846, Lord Harcinge talked forthe fist ime about the development of ralay in India for ‘itary transport. * The fst phase of development of always nina s considered to be Wot In 184, the frst alway le was lid rom Calta to Ralgon ‘Dabousie Meme 1859 gare mpatus tothe development of rauays, ‘And what is noteworthy is thatthe investment was nt inated by ;publc companies, but by private companies, to atract investment Forth they were gion a gunn of 5 percent tree, |i 1853, the fist train an from Bombay to Thane. * Foreign investment in india started in 1856 in the context of ralways. Money was collected by public debt. * T1869, ere ware 33 compari for raivay management of which 24 wore hte, Sew aoemmant nd erga apc nen *Thote wes an ayeement wth hese companies hth ley ne woud be oer a eho cosine ~ Eastem Railway was fist purchased during Lytton’s tenure in 1879, 71"1903, Cuzon established a Relay Boag under fe leadership of Thomas Roberton, who presente several recommenda ele [naemreerenia athe Stee one ken rege o + On me bec ofthe rpot of kta Commis (1921-2), ne aay budget was separates trom tn al budget in 1826 + Before independence in 1947, K.C. Under the chairmanship F108 conte was omedtoingect he cs eat aay finances, notes + Kail Mane "i technology fs made avaiable oa county where ion ‘ang coal ar present, then that county cannot be stopped from modemization." Drishti Publications ‘© Arnold: "Railways in india did what autocratic ruler like | Akbar and Tipu could not do, they could not unity India™ + lak "Beng heopy on te derdopmert fray by ha Erte nna ie ko being happy on seeing the decoraton of someone es's. wi Third phase of colonialism: financial capttaism (1858-1947) + This phase of colonialism was the logical conclusion ofthe ‘rst two phases, under whieh the explotation process of hose ‘Phases continued, but its form changed. ‘competion fram inecoasing indusriazation in other European counties, outside England, etc. “gave rise toa now phase of colonlalsm Ina, which scale franca capitalism, +The francial market was one of the main sectors chosen by British investors for investment during this phase. Under tis, banks and Insurance compariae ware etalshed. Oat teas of aestnent were a, coffee, rubber plantations, jute industry and shipping. The ‘most interesting aspect dng tis farcialeatalem Was tht Bash ievestors di not invest in those Industles (colton textes, ste!) wich woul ater compete wh Brtsh companies, = The sdverse ofects of franca capitalism made the Indian economy even hotower than befor. Duting this period, Indians had © pay interest on public debt which weakened the process of capital formation and invesiment. This foreign fnancial capitalism oi not alow he development of indigenous industies and agreuturo to flourish. As a resu, te Indian economy became merely a colonial economy attached tothe British economy. Result + The side effects of nancial capitalism made the Indian economy hollower than before, India also had to pay interest and, dividends on public debt. + Indians were considered unft for selfgovemance and political participation. + Modem society, culture and poitical leas were discouraged because there was a danger of anti-colonal ideas growing + The collision of Indian interests and India's Social, economic ‘and political progress afd British colonialism gave rise to ‘a powerful national movement Land revenue system under British rule in India The Company Hooded alt of money 1 expand and rengthen Bich sm in India, purchasing of raw materials, ZamindariPermanentistharrer system »» Economic'policy of British rulers in India and its impact 4 “The Company needed Indian revenue for the salaries of cil ‘and mary officials and for ght in Indian vilages and remote areas, the main source of which was land revenue. Teplice of eats a othe 1 cen avery ese the normal fe ofthe vilages. In 1765, when the Company getthe Dwan rights of Bengal, Bar and Orissa, senate Dans ‘wore appointed in these areas for revenue collection. The work of even colecton was given tothe carta by these Nab Duan + Through ths, the contractors callected arbitrary taxes fram the ferma new 9 fiaed scr wasp by tem nec thelr nancial condison Cpertne, dee nenestences pavletin me verve syste Were Hastings edd the dul rein Banga 1772.nd stared the work of revenue cotection under the supervision ofthe a hm ‘Monopoly system (farming system) + In 1772 a five-year monopoly was introduced. According to this new system (farming system), the contrac for land avenue collection was given to the highest bidderin the ution, he sat, lors wor kept ut Because Waren Hastings beloved that including landers in his would mean depriving the government of a large rate of land revenue. + Butte consequenoas f ts eystam wer als Narr Det, he “amount af land reverve increased but the actual collection Kept ‘oreo ae decreasing evry year. Tis lan also cous not fl he red of th company forthe progress af agate stp estan otters smote Sie the zanindar omits te uel are and were oxbe's in and revenue, the Scheme coud not Succeed witha | their cooperation. ‘After the fllue ofthis fve-year contract scheme, Warren Hssnge enangee to one yor n 1778. (Now the contract wa sivenforcne person ony Inti, pronty Was lve to th lands + At this time, Britain had lost its American colony, so it ‘was trying to strengthen its Indian colony. it was under these ‘Greumstances that Crnwalis arrive as the Governor General (of Bengal after Warren Hastings, + Lord Comal realized that the company's revenue rate was fluctuating due tothe dectine inthe agricultural econoniy, As ‘a result, @ new system was introduced for land revenue. oh +n 1790, Corals implemented a 10-year lard revere systan Inwhich the zamindar was conskred the awe ofthe land and | ctor tocol hen, Hence i lead Zama sem “ape? ‘The economic policy of the British rulers in India and its impact + In 1793, Convalis changed the 10-year system to a ermanent one because he fet hat 10 ATS Wasa shor Glo ote for land revenue experiments. “101 pet of err catcion wos esate govermat and he * The biggest flaw of this system was that it was not made clear ‘orice andor sh clam he temas er wancn va ‘dlrs 2 bane of colecrg mere ren na he govern ‘nthe rnd at ba te expkiaion of be nots on anne stared ineoasio. "BY Resulatow 4 of 1783 te goverment got he rt confiscate the Property of the zamindar ann 1704 the ‘ue of sunset ae Implemented hats, team or rvarue dot ech he gvemmen nih testbed tn, then Ns zaindar woud be aucioned. * This system (Zamindar) was implemented on 18 percent of Inia whic incuted the areas of Banaras and North Karnataka besides Ben Bhar Ors, * By 1812, through amendments, landlords were given the ight ‘© confiscate he land of farmers wh dd ot pay axes without rior permission ofthe courts. Duet his, farmers stated tuming into ser + Du0 Law Sunset, now ans Fades money te sna Becoming andor by purchasing lan, which eo ha emerge of absence dst anortom * Sub-feudalization arose due to auction of lands. + Duet bang permanent is ates wer ot changed despite orb or untavorsbie arculural eds, tao sufered _90¥Erment fesse. wet +The Bish had the advantage that they got permanent assurance otras eh oye fr expenstn nests th ean ‘stato vesting or aja steno the apical tem, ey tocol ir atesonon he progess cf rade + tiantevotry hat the colecton orn by the anos was recognized inthe Pits nda Act of 1784 Hees this syst got support “Al resent the Bish nether hadhnowledoe ofthe non arta system nor dt they have enough officers to un the revenue system on their own + The Bits found soll aly Ina the form ofianonner, who wanted the British to remain here. That is ‘yt ats spared Brtshin Grea Revot 1857 Othe land and the responsibly of colecing te taxwae one {Fentoe emer. Shc th stom vas npomerad dec wt, the farmer othe general pu, twas cated Rayyotuad! “Ifthe farmer could not collet the prescribed rent, he was deprived of and ownership, ‘Tromss Mean Capi Reed a conte eh gates te tn sen 1780. Rear sp sas impnetd bre nt {imei Baraahal tt by Colonel Rea "This system was implemented in Madras in 1820. ‘Here, to run this system smoothly, Munro was appointed ‘he Governor of Macas. 71” 1825 his system was ietemenisd in Bombay ae by 1858. wos * This system covered 51 percent of the British teritory + Itwas implemented for 30 years and its rate was fixed at 16. Note:The supose of mplemaning this oystem by th governement was to fina he clas of middlemen Gandords) Ths was because nthe Permanent Setiement, ll ho arcunt collected in excess of te fed aroun ms soropaedby lands an the was ora ne Inoame of the government. Therefore, o increase the income, tho rn inlamer Spam, So atl canto rece eau apt) tamidcemen + Regarding the Ryoinar system, twas argued thal ns systan was in accordance with indian farmers and indian agriculture, but the reaty was fetent for his, n praca tm. ts eye was no ss harmful than the Zarnindar system. This system ended the eonceptot colectve ownership ef he rural sci andthe anarde ‘were replaced by the Briish government itself. In order to callet maximum revenue, the goverrert dominos the lar ovorue arbirarlly and forcibly forced the farmers to produce mora or i Distt Publeatons + Under this system, the farmer had ownership of the land only as long as he paid the rent amount to the {government within the stipulated time, otherwise he was vite from the land. In most aren, tax rates were Kept high fo generate more revenue. Mahalwadi system + Maha means viage. Under ts systan, he governmer hed an agreement Ws cau vetomert + Holt Kenzo is considered 1 bo the father ofthis system. ithas In his report of 1819, he introduced the Mahatwari Did, system which was frst legally implemented in 1822. + Itappeared in its best form in 1893 under the arrangement of Martin Bird and James Thomson, “Ths system was inplomonted in Cantal Prownce, Uitar Pradesh and Punjab and under tls stam 30 percet ofthe land of Bish Ina was induced + Under this system, tie land revenue was determined on the basis ofthe production of the entire vilage and the land revenue of lhe land onners ofthe palace was dotemingd ity In ths, the vilage people, through their head or representatives, upon themselves the responsibilty of paying the tax within a stipulated time iit. ect +The most important drawback of the Mahalwari system was ‘hate made the head or head of he palace extremely power, farmers Ther ponerncrmod immensely withthe ht ove oop ram be and, The second erawhack of is systom was that tended he ret retereip ares he iver andthe are. “+ Under tn method the doterminationofrent was based on estimates ‘and by taking advantage ofits dscrepancies, the company officals started serving thee own inlerets and tre company has to spend ‘more on ren cllecton. Asa resulthis system failed miserably ‘Sone practices related tothe Indian economy during the Bish period 1. Tkathia System: Une tis system, was mandatory forthe {armors cf harparan (Bint to culate inci on abut 27200 oF thei and on contract with their British plantation ownec. 2 Dadhisyetam: Unda ths sstam, Bren Waders sad rte aarerents o Indian producers, artisans and erattsmen by ging a small amount _8'acvaneo or vanes which was Sod athe mart pre. ggg tobe ata very low price. +>» Economic policy of British rulers in India and its impact 2. Dubai Hal sytem: This practice was provaent inthe west ri of 8 mainly n Surat under witch the srs cales Dubai and Hali gave ther property and themselves to thelr owners, canara tt “The ojoive of is and even plies was to acnive masiqum lond revenue. As resin suenatuston, whatever systam cfd even nos inplrarin, faers were High ono Sine farmers ved ages ‘and he mejety ofthe people of nda were engaged in apie. Hence, reat ne ‘auto impoverishment of famers the wages became poor A

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