Impact of British on Economy of India
The Battle of Plassey was fought in 1757 and Battle of Buxar in 1764. The economic loot started from 1757 ended only in 1947 when India was free.
From the third quarter of the 18th century, Industrial Revolution in England started and this brought the age of spinning genny, power looms and steam engine. The most important initial developments were as follows:
- Richard Arkwright developed water frame.
- James Hargreaves developed Spinning Jenny
- Samuel Crompton developed Spinning Mule
These were developed in the initial decades of the 18th century. The last of above three i.e. Spinning Mule was patented in 1769, but the patent ended in 1783. As soon as this patent ended there was a rapid growth of cotton mills in England.
- In 1775 James watt patented the improved Steam Engine which was apart from pumping out machines; it was used in the power machines.
- This enabled the development of the semi automated factories.
- In Iron making, Coke was finally applied to all stages of Iron smelting, replacing the Charcoal. It improved the production as well as efficiency.
But, the economic loot in India provided the profits to the Great Britain in these years that no other investment had ever provided. For almost half a century, England was standing without a competitor.
- Great Britain kept on maturing the manufacturing and industrial revolution and in India; it kept changing the objectives and methods of control towards a more centralized colony.
The first state of economic loot from India started when East India Company was given a status of Monopoly Company. So far, the company carried Indian goods such as Silk, Saltpeter, Muslin, spices to the European markets.
- Till its charter was renewed for second time in 1813 and its monopoly was ended, it kept working on the basis of the 17th century Buccaneering capitalism in which , using the power of the gun and politics, it kept dictating its terms to the weavers in Bengal.
The cost of production had nothing to do with the prices fixed by the company in European Markets. The political advancements from 1757 till 1813 gave the company squeeze out enormous wealth from Indian Rajas, Nawabs and Nizams.
- The money was put to the best use in England’s infrastructure, Industrial development and financial strength.
After the Charter Act of 1813 ended the monopoly of company in India, the process was reversed.
- Now the loot was guided by the needs of the British Industry. The Charter Act of 1813 closed the British Markets for Industrial Goods produced in India. But this act allowed one way duty free trade for the British Mercantile Capitalists, who made India a dumping ground for cheap and machine made imports.
- The result was the Indian Industry which was based upon the handloom and cottage based production for thousands of years, lost foreign markets as well as Indian markets.
- The machines of England devoured Indian raw products such as raw cotton, jute, Silk, Oilseeds, Indigo, Wheat, Tea etc. and imported the British made products.
- If Indians wanted to export, there was a heavy duty imposed over there for entry in the market.
- The acts and legislations excluded the Indian Goods from British markets and other foreign markets.
- In India also the movement of the goods was subject to various kinds of duties.
The Indian Industries such as silk and textiles collapsed. The new manufacturing methods replaced the old manufacturing methods in ship building, metal works, glass works, paper and many other crafts.
In summary, after losing the industries, Indians were confined with the only industry– that was agriculture.
- But the agrarian economy also produced raw materials for England’s machines.
- The large population of India was a large market for Britain. Destruction of Industries rendered large scale unemployment. People started running from the Industrial hubs to villages to become cultivators, the pressure on land increased.
- The Zamindari system made it sure that agriculture keeps the rural peasants indebted always, generation to generation.
The Zamindari, The Military structure, the Judiciary and administration, all were meticulously designed by the British to keep Indian Land and its vast resources under their control. The mercantile exploitation remained till 1860.
- From 1860 till 1947 India remained a victim of Britain’s Finance Capitalism.
In Finance Capitalism, the Capital which was actually of India was rerouted by the British to create infrastructure that was under the “Guaranteed returns to the British Investors“.