IMPACT OF BRITISH RULE ON ECONOMY AND COMMERCE IN INDIA

Positive effects of British rule on Indian economy – In course of time British rule brought with it modern industries in India. These proved helpful in industrializing India and put her on the industrial map of the world.

Under the British rule, means of communication and transport were improved. A cheap postal system was introduced. During the regime of Lord Dalhousie, the telegraph system was established. Though the railways were primarily meant to encourage the British industrialist and to facilitate the movement of British soldiers, they proved to be greatly beneficial to the people of India. The railways did go a long way in stepping up the pace of industrialization in India.

Harmful effects of British rule on Indian economy – The British rule also produced a series of adverse effects on the Indian economy. The total impact was to weaken all the economic potential for growth and brought untold poverty and misery to the Indian masses.

Industrial revolution resulted in Economic exploitation of Indian masses – The Industrial Revolution (1750-1850) started in England when the East India Company got the Diwani rights from the Mughal Emperor Shah Alam. In England, factory system developed and started producing finished commodities on a massive scale. These factories needed large quantities of raw materials which they could obtain from India easily because of their political power. On the other hand, the Indian market was readily available to British manufacturers for dumping their goods. This is how the Industrial Revolution in England resulted in economic exploitation of India.

Growing poverty of agriculturalists – Before the rise of British power the peasants in India were by no means contented and happy. However, they were not very miserable. The British rule increased the poverty and suffering of the farmers who constituted the larger proportion of the Indian population. When they were ruled by the Indian rulers, the Indians received and felt the personal touch. This they totally lost since the establishment of the British rule.

Flooding of Indian economy with British goods – When England followed the policy of free trade, Indian markets were flooded with English goods. Millions of small Indian producers were destroyed as their industries were ruined. In 1840, a number of Indians brought to the notice of the British parliament that while British cotton and silk goods imported to India paid only 3 ½ % and woolen goods 2%, Indian cotton goods imported to Britain had to pay 10% silk goods 20% and woolen goods 30%. The ruinous effects of the British commercial policy on India’s textile manufacture were highlighted by the governor generals report for 1834-35.

Increasing export of raw materials – With the establishment of British rule and introduction of a commercial policy favorable towards the British manufacturers, there was distinct trend towards increase in export of raw materials. The export of manufactured goods from India steadily declined and the export of raw materials increased rapidly.

Economic balance in the Indian economy destroyed – British rule resulted in destruction of the very basis of the Indian economy. It destroyed the balance and harmony between agriculture and domestic industry. Indian economy was a blend of agriculture and industry. It now became a dominantly agricultural economy. When the East India Company’s monopoly in trade ended, the Indian economy was openly exposed to exploitation by British commercial and trading interest.

Destruction of village self-sufficiency – British rule ended the age long self-sufficient village communities in India. The British Commercial Policy was disastrous to village communities. After the establishment of the British rule Indian villages started buying from outside tea, sugar, matches, umbrellas, cloth, kerosene, oil, mirrors, bangles, sewing machines, drugs, aluminum ware and several other commodities. This marked the destruction of the age old self sufficiency and self-reliance of village communities. The introduction of money by the British rulers also adversely affected the Indian village economies.

The decline of Indian handicrafts and its consequences – The decline of Indian handicrafts brought about by the discriminating policies of the British rulers, had the following consequences:

-       It led to an increase in the tremendous pressure of population on land.

-       The demand for land increased. This led to a rise in the rentals and prices of lands.

-       The rise in demand of land meant more fragmentation and subdivision of land.

-       Small land holdings were uneconomical. They did not provide to the cultivators even their subsistence needs and made them steeped in debt.

-       The farmers had to lose tehri lands ultimately. They became landless laborers / migrated to urban areas whereby increasing the number of the unemployed.

-       India which was a seller of rare artistic wares and much sought-after specialties was converted into a handy source of food stuffs and raw materials for materially advanced countries of the world.

Railways – an instrument of exploitation – Railways were introduced for movement of raw materials and proved an instrument of exploitation of India and her people by destroying Indian industries and trade. The Government of India guaranteed a very high rate of profit to the British investing companies, who provided capital for building railways in India. Consequently, railways proved to be an effective instrument of exploitation of India, by the British rulers. The freight structure was fixed in such a way that it helped the export of raw materials and the import of manufactures from England.