The rulers of India, as well as the colonial intellectuals who analysed their authority, made a point of emphasising that the British had delivered peace and excellent governance to the subcontinent. The Pax Britannica and massive public investment in the country resulted in the building of a sophisticated transportation and communications network, laying the groundwork for a modern economy. The British-constructed railway network and irrigational system were the foundation upon which India’s modern economy was developed. The British provided the Indians with access to western science and education, as well as preparing them for ultimate self-government. Scholars such as Theodore Morison and Vera Anstey were ready to concede that there was some form of tribute in Britain’s economic dealings with India, but that British rule was ultimately beneficial to the Indians. In any event, their principal goal was to present a counter-argument to the accusations of colonial oppression levelled by nationalists and nationalist economists.
Manufactured imports, it was said in early left nationalist appraisals of India’s demise of traditional artisanal industries, led to a large drop in the number of people employed in the secondary sector and the increase of landless agricultural labour. S.J. Patel utilised the Census of India Reports to demonstrate that India’s landlessness had skyrocketed. In Land and Labour in India [Bombay 1962], Daniel Thorner utilised the same Census Reports from 1881 to 1931 to demonstrate that the drop in secondary employment throughout this period was just one or two percentages. The high projections of loss in the secondary sector were due to a misinterpretation of Census categories. Following then, scholarly emphasis switched to the pre-Census period’s drop in employment.
Wealth being drained.
Sir John Shore and Rammohan Roy provided some approximate estimates of the money that moved out of the nation when the notion of tribute from India to Britain first developed in the late 18th century. The drain idea is linked to Dadabhai Naoroji, who calculated that 1500 million pounds was already carried away in the guise of drain by the late nineteenth century. In his book Poverty and Un-British Rule in India, he maintained that the nation was destitute as a result of the drain, and as such the capital that Britain put in the country was just a small portion of the money that Britain had taken out previously. The British generated tremendous profits through commodity exports, which also served as a type of drain. There was also an internal drain, according to his study, as resources were swallowed up by a few urban hubs. The ‘home charges,’ or expenditures incurred by the Government of India in Britain as contracted expenses outside of India, were directly tied to colonial authority.
Agriculture becoming commercialised.
Agriculture was commercialised even before the colonial period, but it flourished significantly throughout the colonial period. Nationalists contended that agricultural commercialization was fostered in order to make India a cheap food and raw material provider for Britain, as well as to produce trade surpluses with other nations such as the United States. India’s trade surfeit would assist Britain in addressing its balance of payments issues with America and Europe.
The Development of Modern Industry
The nationalists claimed that Britain maintained a free trade strategy in India in order to promote British industry’s products. If India were a independant country, it might have industrialised behind tariff barriers, as the United States and Germany did in the late 1800s. These points were argued with vigour by R.C. Dutt, R.P. Dutt, and D.R. Gadgil. The British policies in India indirectly slowed the growth of Indian industry by enabling the country’s revenue and buying power to languish.
Finance and Money
The Indian nationalists’ favourite critique of colonial authority concentrated on the government’s tariff policy—the policy of free trade imperialism as in 19th century and the policy of limited support and imperial preference during the interwar era. The rupee-sterling exchange rate and the negative repercussions of the high exchange rate were also discussed in the 1920s and 1930s. Fixing the rupee at one shilling and six pence rather than one shilling and four pence was deemed to be detrimental to Indian economic interests. A higher exchange rate would diminish agriculturist exporters’ earnings, since they would receive 12.5 percent less in rupees for the produce they exported.