Throughout the 18th and 19th century, momentous of episodes have taken place in the world. One of such episode can be said to be the industrial revolution which started in England and then eventually spreads itself around to other countries in Europe (Chauhan 1989: 109). Another information which is to be mentioned is the discovery of the sea and trade routes by a Portuguese in which it included a sea route to India and as a result of that many nations from Europe came to India for trade. Through which as it is often said that it was the beginning of modern period in Indian history. Before we go further in to the economic impact British had in India, we shall first have a glimpsed of how it began in other words its background. It was in 1579 when a letter was written by a fellow English man by the name Thomas Stevens, in which he managed to motivate four of London’s traders to travel to India (Chatterjee 1998: 11). The main purpose was because of the industrial revolution where by Britain needed more raw materials for its factories and also a location where they could sell all their valuable goods. A struggle of power occurred in India in the 18th century. Where by the Mughal Empire was declining in forces, which gave the British the precise advantage to take over the Indian colony (Chatterjee 1998: 13). The colonization of India by the British was more towards a business point of view than that of other colonial powers. Its own motivation was more on economics and not pious (Coupland, 1941: 3).
With India under the colonial rule of Britain, they set up their own policies which kept them in control over the territory. One of such policy was the land revenue policies, which made the low income farmers to work more and in return more revenues for the Britain administrative. They also forced the Indians to commercialize their raw materials and some of their cash crops for the industries in Britain (Chauhan 1989: 19). Britain knew they are going to face some competition with other European countries so they managed to defeat all of them. They also devour the sale of raw materials and made the Indian weavers to buy their raw materials at an exorbitant price where as they bought there’s at a low price (Gopal 1963: 17).
The British gained more land for their empire through the colonization of India. They also imported raw materials from India. All the successes and progress experienced by India came into a downfall because when Britain really came in and colonized India the “ possession of power, the economic consequences of the trade was reversed and India was placed on the precipice to roll down to the bottom,” (Gopal, 1963: 11).
The British made the Indian soldiers to fight their battles of seas against the Portuguese and some of the other European traders (). The British then hired the Indian soldiers to engage in their fight battle. The Indian soldiers also fought in World War II alongside the army of Britain. The British came to India to establish their industries in order to exploits its raw materials and labour. So Britain, in the seventeenth century, found the landscape of India as the “ tropics which represented both paradise and opportunities” (Stein, 1998: 12). India then became the market for the British. Calcutta and Bombay became the major trading cities and it opened doors to trade with its neighbouring Asian countries and the rest of the world ().
As said through my introduction, the colonization of India by the British had its set of drawbacks. One of the greatest freedom fighter Mahatma Gandhi told the British that “ even though you have given us our own government but you have not given us any responsibility to run the government” (). The citizens of India where not allowed in running its own government and the Indian natives where not allocated any position in its own administration.
Even though as said by Chauhan “ English educations were introduced to create a class of educated Indians who would assist the British in ruling the country and strengthen their political Authority” (Chauhan 1989: 20). From what we just mentioned above we could say that the British imperial rule has just been using the Indians and its resources to better their own nation. So towards this point of view this essay will discuss the economic impact towards the negative point of view on the impact British rule had on India. To further elaborate on the negative impact, we have decided to use the various Indian industries and trade, which includes the textile industry and trade, Land Revenue Policy and Land Settlements, Commercialisation of Agriculture, Rise of the New Money-lending Class, Rise of the New Middle Class and finally transport and communication.
ECONOMIC IMPACT
From the above statement we can see that the industrial revolution has really assisted the English traders to a lot of profit from countries in Asia, Africa and America (Gopal 1963: 20). From the profit they gained, they wanted to invest it in trade with India (Coupland 1941: 4). With the help of the East India Company they were able to increase their industrial base (Coupland 1941: 3). During this spread of industries across India many English traders in India were gaining more profit from manufacturing than trading.
From the year 1793 to 1813 the Britain manufacturers started a movement against the company, “ its trade monopoly and the privileged it enjoyed” (Chatterjee 1998: 17). They finally thrive in downgrading the East India Company’s monopoly of Indian trade (Chatterjee 1998: 18). With this happening India then became an economic colony of Britain. With this said we shall now look into the negative impact the British rule had on India through various Indian trades and industries.
TEXTILE INDUSTRY AND TRADE
Previously before the coming of the industrial revolution, Indian traders had a successful market in Europe. The Indians produced textiles such as cotton, woollen and silk which also had markets in both Asia and Africa (Stein, 1998: 157). Now with the industrialization coming up in England, this affected the Indian market. There was now a change of pattern in trade between the two nations. There was a vast majority of textile machines being imported from England to the Indian market. The products which were produced by the machines became a huge risk for the Indian handicraft industries because the British goods were sold at a very cheap price (Rothermund 1988: 29).
The reason why the British goods were being sold at a cheaper price was because of the policy in India which allows any foreign goods to be given free entry without the payment of duty. While on the other hand the Indian handicrafts were being taxed a lot of money when they are leaving the country (Rothermund 1988: 19). Sometimes the British government keen to set a protective tariff on the Indian textiles. So with this kind of tax India exchange its importation from clothes to raw cotton, silk and even wool, and also an importer of British attire. This change of process made a great impact on the Indian weaving industry contributing to its essential disruption (Sood 1989: 75). So with the industry being collapsed it created unemployment to a large association of weavers. This made them travel back to the rural areas to harvest on their land as agricultural workers (Lucas, Papanek 1988: 159).
By 1813, the Indian market lost all their markets abroad as well as their domestic market. This was due to the factory made products by the British, and Indian goods just could not cope with it. As said by stein “ These markets were now captured and monopolised by Britain by means of war and colonisation” (Stein, 1998: 205). They withdraw money from the rulers of India, zamindars, traders as well as from common citizens. This was added to the income of the British officials (Rothermund 1988: 20). So through this aspect we can see that the economic policies imposed by the British were meant to be benefited by the East Indian Company and later on by the British Empire.
Land Revenue Policy and Land Settlement
As we all know the main source of income for the monarch’s right before time were from agriculture, through the tax imposed on land. By the 18th century most of the Indian citizens worked on their farms. But when the British took over the tax imposed on land kept on increasing (Rothermund 1988: 22). This could be because of various reasons. One of the reasons was because they needed money to run their administrative, trade and even new projects for their industries. The British administrative also added the tax so that they could endorse their order of rule and war efforts.
At the end of the day this taxes which were being imposed affected the cultivators because they were not able to gain anything after giving its daily outcome to the landowners. By the year 1793 the permanent settlement was suggested by Lord Cornwallis. The permanent settlement made the landowners and the zamindars deliver a certain amount of money into the state treasury (Stein 1998: 213). With this new policy it made the zamindars the owner of the land. So with a fixed price deposited, the zamindars made the farmers produce more goods in other for them to earn profit. If a zamindars was not able to pay the revenue his land was sold to the other zamindars. This favoured the British administrative because the new class of zamindars became political allies of the British (Rothermund 1988: 20).
Another settlement was introduced in 1822, which was the mahalwari settlement. This settlement was in the north western provinces, the Ganga valley and in the Punjab (Stein 1998: 213). The function for this settlement was that the products of a mahal or estate were now jointly going to pay for the amount of the tax imposed by the British administrative (Stein 1998: 213). Even though the payment was jointly it did not help because the amount charged was still very high.
Then there was the Ryotwari settlement which started in the 19th century. This settlement was imposed on the farmers working on the land (Stein 1998: 213). The farmers were now considered as the owners of the land as long as they can pay the tax, but the exploitation continued with high demand by the British administrative.
Commercialisation of Agriculture
Another important economic impact of the British rule in India was the initiation of a large quantity of commercial crops such as tea, indigo, opium, cotton and oilseed (Rothermund, 1988: 1). All of these crops were brought in with different intentions. For example the Indian opium was brought to establish a balance in the trade of Chinese tea with Britain in the latter’s favour. The opium market was being in charged by the British traders and they did not leave much profit for the Indian producers. One of the cash crops was indigo. This crop was produced without the Indians will, and it was sold under the conditions instructed by the British. The indigo was produced used in British towns as dyeing agent for cloths. Unluckily growing indigo was bad for the farm because it leaves it infertile for some years. This made the peasants unwilling to cultivate it. While as for tea, it made it difficult because plantation ownership was changed almost always. The workers on these plantations worked under a lot of personal discomfort.
This policy of commercialization of agriculture also increased the rate by which ownership of land was being transferred (Robinson, 1998: 113). The increase in ownership transfer let to an increase in landless labourers. Commercialization of agriculture also brought in a sum numbers of traders and merchants who also took advantage of the situation. With the coming of the traders and merchants into India, the farmers now were counting on them to sell their crops during harvest time. With the farmers now moving into commercial crops food grain production went down. With the food stock becoming scarce this led to starvation in some part of India and eventually this made the farmers rebel against the foreign traders and merchants (Allen, 2001: 60). There was a lot of money being sucked away from India into Britain due to the several economic policies. More financial responsibility was placed on India due to the expenses on pensions, salaries and training of military and staffs employed by the British to help them rule India().
That is why we think if this money was invested in India it would not have the same economy it is having right now, it would have been better. This period in time was described by Robinson in his book as the time “ agricultural technology remained relatively backward; surpluses were not reinvested; the burden of Government revenue demand was heavy”, (Robinson, 1989: 260).
Rise of the New Money-lending Class
The rise of the new money lending class impacted the economy of India in a way, because the time restriction and the extravagant demand of tax and revenue by the British administration made it compulsory for the framers to take loans from the money lenders. The money lenders took advantage of this situation by often exploiting the farmers by afflicting high interest rates (Robinson, 1998: 112). They often used illegal means like forged signatures, fake accounts and thumb impressions. Later on a new legal system was introduced by the British. This new legal system brought in by the British only helped the money lenders who were either landlords or local merchants. This was unfortunate because in most cases the farmers were not able to pay back the loans with full interest (Robinson, 1998: 112). Hence, their lands were gradually taken by the new money lending class.
Rise of the New Middle Class
Another major impact of the British rule in India was the beginning of a new middle class. With the coming up of the British commercial interests, it brought about a new advantage opener to a small population of the Indian citizens. They often served as agents and intermediaries of the British businessmen to obtain wealth. The new landed aristocracy which went into action after the introduction of the permanent settlement also formed a part of this new middle class. A great section of the Indian society who was the old landowning aristocracy lost the ownership of their land and in many cases it was replaced by the new class of land owners. The looted the riches of the people of India, this weakened the economy and deprived the citizens of India of their rights as citizens of India.
Transport and Communication
Before the coming of the British the means of transport in India was mostly by bullock’s carts, pack animals and camels. So when the British came they needed a railway system which can be used to connect the raw material producing cities with exporting ports and to ease the movement of British goods to other parts of the country as well as to bring raw materials to the ports (Rothermund, 1988: 33). This vast networking of railways that one is still seeing in India today was made during the end of 19th century. This of course attracted British bankers and investors to invest surplus wealth and the materials in making of the railways. The railway system benefited the British capitalist in two major ways. First of all, it made trading of goods much easier and more profit was gained by connecting their internal markets with the ports. Secondly, most of the coaches, the rail engine and the capital input for the construction of the railway system came from Britain. The British capitalist who invested in railways were also given at least a minimum profit of five present by the government. These companies were also given lands for free with a lease of ninety nine years (Rothermund, 1988: 33).
