Economic Impact of British Rule in India - MIND MAP | Drishti IAS English

Summary

This episode of the Mind Map program explores the economic impact of British rule in India, detailing the phases of economic exploitation, including commercial capitalism, industrial capitalism, and financial capitalism. It discusses the impoverishment of peasants, deterioration of agriculture, destruction of industries, and the late development of modern industry. The video also highlights critics like Raja Ram Mohan Roy, Dadabhai Naoroji, and G. Subramanya who opposed British economic policies, and concludes with practice questions on economic critics of colonialism in India.

Takeaways

• 🏛️ The British Empire's establishment in India led to a transformation of its economy into a colonial one, with the Indian economy's nature and structure determined by British economic needs.
• 🛑 The economic exploitation of India by the British occurred in three phases: commercial capitalism, industrial capitalism, and financial capitalism, each with distinct objectives and impacts.
• 💸 Commercial capitalism involved the British acquiring a monopoly on trade with India, leading to large-scale wealth extraction and the exploitation of Indian weavers and artisans.
• 🏭 Industrial capitalism, starting with the Charter Act of 1813, aimed to use India as a market for British manufactured goods and a source of raw materials, causing a sharp increase in raw material exports.
• 🚂 Financial capitalism marked an era of foreign investments in India, with the construction of railways, banking, post, telegraph services, coal mining, and shipping initiated during this period.
• 📉 British policies resulted in the impoverishment of peasants due to high rents, illegal dues, and exploitative tax collection methods, leading to the deterioration of agriculture.
• 🌾 The commercialization of agriculture led to the cultivation of specialized crops for national and international markets, but the increased production did not benefit cultivators and was monopolized by Europeans.
• 🏗️ The destruction of Indian industries like textiles, shipbuilding, and steel to promote British machine-made products resulted in de-industrialization and large-scale unemployment.
• 🚢 The Charter Act of 1813 enabled one-way free trade, flooding Indian markets with cheap British imports and making it difficult for Indian products to compete in European markets.
• 🏭 The lack of industrialization in India, despite the loss of traditional livelihoods, led to de-industrialization while Europe experienced the Industrial Revolution, impacting Indian artisans and handicraftsmen.
• 🗣️ Critics of British economic policies in India, such as Raja Ram Mohan Roy, Dadabhai Naoroji, and G. Subramanya, highlighted the negative impacts of colonial policies on India's economy and the drain of wealth from the country.

Q & A

What was the primary objective of the British during the period of commercial capitalism in India?

The primary objective of the British during the period of commercial capitalism was to acquire a monopoly of trade with India against all other European trading companies.

How did the Charter Act of 1813 change the economic relationship between Britain and India?

The Charter Act of 1813 marked the beginning of industrial capitalism and colonialism of free trade, where India was to serve as a market for British manufactured goods and a source of raw materials like cotton and food grains.

What were the main features of the financial capitalism stage in India?

The financial capitalism stage was characterized by the expansion of British investments in India, including the construction of railways, banking, post, and telegraph services, coal mining, and shipping.

How did the British policies contribute to the impoverishment of peasants in India?

British policies such as the permanent settlement, ryotwari system, and mahalwari system restructured the old agrarian system to extract maximum profit, leading to the impoverishment of peasants who faced high rents, illegal dues, and exploitative tax collection.

What was the impact of British policies on the agricultural sector in India?

British policies led to the deterioration of agriculture, with increased burdens on the sector without any development or modernization. This resulted in stagnation and a perpetually low level of productivity.

How did the commercialization of agriculture affect the Indian farmers?

The commercialization of agriculture led to the cultivation of specialized crops for sale in national and international markets. However, this did not benefit the cultivators, who instead faced exploitative means of product action.

What was the effect of British policies on Indian industries?

British policies led to the destruction of Indian industries such as textiles, shipbuilding, and steel, promoting British machine-made products and causing large-scale unemployment and a heavy drain of wealth.

Why did the modern industry in India develop late during the British rule?

The loss of traditional livelihoods was not accompanied by a process of industrialization in India, leading to de-industrialization at a time when Europe was experiencing the Industrial Revolution, which acted as a major setback for Indian artisans and craftsmen.

Who were some of the main critics of British economic policies in India?

Some of the main critics of British economic policies included Raja Ram Mohan Roy, Dadabhai Naoroji, R.C. Dutt, and G. Subramanya Aiyar, who highlighted the negative impacts of British rule on India's economy and society.

What was the 'drain of wealth' theory proposed by Dadabhai Naoroji?

The 'drain of wealth' theory proposed by Dadabhai Naoroji stated that Britain was draining India's wealth and resources, which were not available to Indians for consumption, leading to India's economic backwardness.

Outlines

00:00

📚 Economic Impact of British Rule in India

This segment delves into the profound economic changes India underwent under British colonial rule. It begins with the establishment of the British Empire, which significantly altered India's economic, social, and political landscape. The British policies steered India's economy towards a colonial model, with its structure and nature being dictated by British economic needs. The script outlines three distinct phases of economic exploitation: commercial capitalism, where the British aimed to monopolize trade with India; industrial capitalism, marked by the Charter Act of 1813, where India became a market for British manufactured goods and a source of raw materials; and financial capitalism, characterized by foreign investments and the construction of infrastructure in India. The paragraph also discusses the detrimental economic impacts of British policies, including the impoverishment of peasants, deterioration of agriculture, commercialization of agricultural practices, destruction of indigenous industries, and the one-way free trade that flooded Indian markets with cheap British goods.

05:02

🔍 Critique of British Economic Policies in India

The second paragraph focuses on the critique of British economic policies in India, highlighting the voices of prominent Indian critics such as Raja Ram Mohan Roy, Dadabhai Naoroji, and G. Subramanya. These critics argued that British rule led to the de-industrialization of India, with the destruction of industries like textiles, shipbuilding, and handicrafts, causing widespread unemployment and a significant outflow of wealth. The paragraph also discusses the late development of modern industry in India due to the loss of traditional livelihoods without a corresponding industrialization process, which was a major setback for Indian artisans and craftsmen. The critics pointed out that India's economic backwardness was a direct outcome of the colonization of its economy. The segment concludes with a mention of practice questions related to the economic critics of colonialism in India and an invitation to examine the various facets of British economic policies critically.

Keywords

💡Economic Impact

Economic impact refers to the changes in an economy that result from a particular action or event. In the context of the video, it discusses how British rule influenced India's economy, transforming it into a colonial economy. The video outlines various phases of economic exploitation and their effects, such as impoverishment of peasants and deterioration of agriculture, which are direct results of British policies.

💡Commercial Capitalism

Commercial capitalism is the phase where the primary objective is trade and the acquisition of goods. The video describes this period as one where the British aimed to monopolize trade with India, leading to large-scale extraction of wealth and a significant impact on Indian weavers and artisans, who were exploited and forced to produce for the British companies.

💡Industrial Capitalism

Industrial capitalism is characterized by the dominance of large-scale industry and machinery. The video explains that this phase began with the Charter Act of 1813, where India was to serve as a market for British manufactured goods and a source of raw materials. This led to the rapid expansion of industries and intensive commercialization of agriculture to meet the needs of British industries.

💡Financial Capitalism

Financial capitalism is the stage where investments and financial services play a significant role in the economy. The video mentions that this era was marked by British investments in India, including the construction of railways, banking, post, and telegraph services, and coal mining. This period was influenced by global dynamics such as transportation revolutions and competition from other countries.

💡Impoverishment of Peasants

Impoverishment of peasants refers to the economic decline and hardship faced by agricultural workers. The video highlights that British policies, such as the Permanent Settlement and Mahalwari system, restructured the agrarian system to extract maximum profit, leading to the impoverishment of peasants who faced high rents, illegal dues, and exploitative tax collection.

💡Deterioration of Agriculture

Deterioration of agriculture indicates a decline in the productivity and health of the agricultural sector. The video discusses how British policies increased the burden on agriculture without any development or modernization, leading to a stagnation in the sector and low productivity levels.

💡Commercialization of Agriculture

Commercialization of agriculture is the process of producing crops for sale in markets rather than for subsistence. The video describes how certain crops were grown for sale in national and international markets, and how the plantation industry, including tea, coffee, indigo, and rubber, was monopolized by Europeans, leading to exploitative practices for cultivators.

💡De-industrialization

De-industrialization is the decline of industrial activity and the shift away from manufacturing. The video explains that Indian industries, such as textiles, shipbuilding, and steel, were steadily destroyed to promote British machine-made products, leading to large-scale unemployment and a significant drain of wealth from India.

💡One-way Free Trade

One-way free trade refers to a trade relationship where goods flow in one direction without reciprocal access to markets. The video mentions the Charter Act of 1813, which allowed British citizens to engage in one-way free trade with India, flooding Indian markets with cheap, machine-made imports and making it difficult for Indian products to penetrate European markets.

💡Late Development of Modern Industry

Late development of modern industry refers to the delayed industrialization process in a country. The video argues that the loss of traditional livelihoods in India was not accompanied by industrialization, leading to de-industrialization at a time when Europe was experiencing the Industrial Revolution, which was a major setback for Indian artisans and craftsmen.

💡Economic Critics

Economic critics are individuals who analyze and critique economic policies and practices. The video lists several critics of British economic policies in India, such as Raja Ram Mohan Roy, Dadabhai Naoroji, and G. Subramanya, who highlighted the negative impacts of British rule on India's economy, including the drain of wealth and the destruction of indigenous industries.

Highlights

Introduction to the economic impact of British rule in India, detailing the transformation of India's economy into a colonial one.

Phases of economic exploitation: Commercial capitalism marked by British efforts to monopolize trade with India.

The impact of British policies on Indian weavers and artisans due to increased export of Indian textiles.

Industrial capitalism phase, starting with the Charter Act of 1813, aimed at making India a market for British goods.

Financial capitalism characterized by British investments in India, including railways, banking, and mining.

Economic impact of British policy: Impoverishment of peasants due to exploitative agricultural practices.

Deterioration of agriculture under British rule, with increased burden and lack of modernization.

Commercialization of agriculture leading to the growth of specialized crops for international markets.

Destruction of Indian industries like textiles and shipbuilding to promote British machine-made products.

One-way free trade policy post-1813, allowing cheap British imports to flood Indian markets.

Late development of modern industry in India due to the de-industrialization caused by British policies.

Criticism of British economic policies by Indian reformers like Raja Ram Mohan Roy and Dadabhai Naoroji.

Drain of wealth theory by Dadabhai Naoroji, highlighting Britain's extraction of India's wealth.

G. Subramanya's argument on India's economic backwardness as a result of colonialization.

Comprehensive nationalist critique of British rule by leaders like Gopal Krishna Gokhale and Surendra Nath Banerjee.

Practice questions on economic critics of colonialism in India, including a prelim's question on notable critics.

Mains question examining the various facets of British economic policies in India from the mid-18th century to Independence.

Transcripts

foreign

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welcome to mind map program today's

topic of discussion is economic impact

of British rule in India first of all we

will discuss about the introduction

phases of economic exploitation economic

impact of British policy major critics

of British economic policies and

practice question

first of all let's have a look at the

introduction of the topic the

establishment of the British Empire in

India transformed India's economic

social and political scenario in the

economic context the British policies

led to Rapid transformation of India's

economy into a Colonial economy the

nature and structure of Indian economy

was determined by the needs of the

British economy the result of this

subordination of the Indian economy to

the interest of British trade and

Industry were many and varied

now phases of economic exploitation

first is commercial capitalism this

period is also known as period of

merchant capitalism the basic objective

of britishers during this period was to

acquire Monopoly of trade with India

against all other European trading

companies in this phase there was

large-scale reign of wealth from India

there was no large-scale import of

British manufacturers into India rather

there was an increase in export of India

textiles this had huge impact on the

Weavers and other Artisans as they were

exploited and were also forced to

produce for the company NeXT is

industrial capitalism the stage is also

termed as colonialism of free trade it

started with the Charter Act of 1813 and

continued till 1860s India was to serve

as a market for the ever increasing

output of British manufactured goods

especially textiles at the same time the

new capitalist in England needed from

India exports of raw materials

especially cotton and food grains the

export of raw materials was increased

sharply to meet the dividends of the

company and profits of British merchants

rapid expansion of Industries coupled by

intensive commercialization of

Agriculture for producing raw materials

for the British Industries was the main

feature of industrial capitalism next is

financial capitalism the third stage is

often described as the era of foreign

investments and international

competition for colonies the changing

Dynamics in the world affairs such as

revolution in the means of

transportation emergence of other

countries which challenged British

Supremacy Etc impacted the British

policies this resulted in expansion of

British investment in India the

construction of Railways banking post

and Telegraph Services coal mining

shipping were initiated during this

period

now moving on to economic impact of

British policy first is impoverishment

of Peace entry the comment was only

interested in maximization of rents and

in securing its share of Revenue

policies like permanent settlement

settlement and mahalwari system were

introduced which restructed the old

agrarian system their main aim was to

extract maximum profit and since the

rural population was highly dependent on

agriculture its destruction also led to

impoverishment of peasants peasants also

had to deal with high rents illegal dues

beggar exploitative means of tax

collection under developed agricultural

methods Etc all this led to extreme

exploitation of the peasants who

suffered under the triple burden of

government zamindar and the money

lenders next is deterioration of

Agriculture with exploitative policies

the burden on the agriculture increased

despite which no development or

modernization was done for the sector

the cultivated had neither the means nor

any incentive to invest in agriculture

apart from that since many other

industries were destructed which

resulted in overcrowding of Agriculture

thus due to all these reasons there was

no development and stagnation in the

agricultural sector which led to

perpetually low level of productivity

commercialization of Agriculture with

consolidation of power in the British

hands the agricultural sector became

highly commercialized certain

specialized crops began to be grown for

sale in National and even International

markets products like cotton jute oil

seeds sugarcane tobacco are some

examples perhaps the commercialization

phase reached its peak with introduction

of Plantation of tea coffee Indigo and

rubber the plantation industry was

completely monopolized by the Europeans

even when the production was increased

rapidly it did not benefit the

cultivators rather they had to face

exploitative means of product action

destruction of Industries Indian

industries were steadily destroyed to

promote British machine made products

the destruction of Industries like

textile shipbuilding and steel industry

is an example of the

de-industrialization of India after

agriculture cotton textile industry was

the biggest sector for providing

employment in India but the

discriminatory policies and constant

competition with British goods led to

its decline the flourishing shipbuilding

industry of Surat Malabar Bengal and

masulipatnam was crushed handicraft

industry also received a setback after

1835 when it had to compete with the

British machine made products all these

eventually led to large-scale

unemployment Exodus of population

destruction of indigenous craft and

heavy drain of wealth one-way free trade

the Charter Act of 1813 allowed one-way

free trade for British citizens as a

result cheap and machine made Imports

flooded Indian markets it was different

difficult for the native producers to

compete with British made products in

the local markets on the other hand

Indian products found it even more

difficult to penetrate the European

markets tariffs of nearly 80 percent

were imposed on Indian textiles and

Indian cloth also after 1820 Indian

exports were barred from the European

markets next is late development of

modern industry the loss of traditional

livelihood was not accompanied by a

process of industrialization in India

this resulted in de-industrialization of

India at a time when Europe was

witnessing Industrial Revolution this

acted as a major setback for Indian

Artisans and handicraftsmen when they

were already facing loss of patronage

and unemployment

now let's discuss about major critics of

British economic policies since the

beginning of the British rule their

economic policies were highly criticized

people like Raja Ram Mohan Rai dadabhai

naroji arshidad G subramanya were some

of the main critics of British economic

policies in the early 1830s Raja ramohan

Roy spoke against Colonial economic

policies and practices he was critical

of the tribute paid to Britain and was

concerned about the situation of

self-cultivating peasants later the

other by naroji spoke about the impact

of British policies on Indian economy in

1867 he propounded the drain of wealth

theory in which he stated that the

Britain was completely draining India RC

that also promoted the same Theory by

keeping it as a major theme of his book

economic history in India the reign of

wealth was a portion of India's wealth

and economy that was not available to

Indians for consumption Bhaskar pandoran

argued that the destruction of the

Indian genus industry in Maharashtra was

in India as a whole resulted in poverty

and misery of The Artisans g subramanya

a year was another critic of British

economic policies in his book some

economic aspects of British rule in

India 1903 he argued that India's

economic backwardness was an outcome of

the colonialization of the Indian

economy more comprehensive nationalist

critic of British rule in India emerged

from Mahadev gobindranade gopal Krishna

gokhale jeevi Joshi

and Surendra Nath Banerjee

now it's time for the practice questions

first is prelim's question who of the

following was or were economic critic or

critics of colonialism in India one the

other by naroji two g subramanya a year

three arcidat select the correct answer

using the code given below one only one

and two only two and three only or one

two and three and our Mains question

examine critically the various facets of

economic policies of the British in

India from mid 18th century till

Independence so that's all for today

stay tuned for the next episode thanks

for watching

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thank you foreign

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