Sakshi Education
By Srirangam Sriram, Sriram's IAS, New Delhi.
Drain of wealth
In the process of fulfilling these imperial obligations, India was being drained out of her wealth, so complained the early nationalists. There were several pipelines through which this drainage allegedly occurred.
These forms of drain of wealth included: 
According to some estimate, the amount of drainage was around£17 million per annum in the late nineteenth and early twentieth centuries, and point out that this represented less than 2 per cent of the value of lndia's exports of commodities in that period. But though a small amount, as the Indian nationalist Dadabhai Naoroji argued what being was drained out was potential surplus that could generate more economic development if invested in India.
After the pacification of the revolt of 1857, the classical colonial economic relationship between Britain and India gradually emerged. The Indian Empire was supposed to pay for itself and at the same time the country's resources were meant to be available in the imperial cause.
India had to provide a market for Britain’s manufactured goods, and serve as a source of agricultural raw materials. Till the end of the nineteenth and the beginning of the twentieth century, India fulfilled many of her imperial obligations successfully.
India’s imperial obligations
India had to provide a market for Britain’s manufactured goods, and serve as a source of agricultural raw materials. Till the end of the nineteenth and the beginning of the twentieth century, India fulfilled many of her imperial obligations successfully.
India’s imperial obligations
- It served as a major market for British industries, like cotton, iron and steel, railways, machinery etc. At the time of World War One, Indians consumed 85 per cent of cotton piece goods produced at Lancashire and 17 per cent of British iron and steel production was absorbed by the Indian railways.
- Until World War One, there was no import duty, which could possibly offer any sort of protection to any of the Indian industries.
- Apart from that, India was also a field for British capital investments in railways and agency houses; the Government of India had to ensure the payment of interests on guaranteed railway stock and debt bonds and meet its annual home charges. This invariably increased India's public debt.
- On the other hand, India's export trade with other countries helped Britain to overcome its own problems of balance of payment deficit with them, particularly with Europe and North America.
- Finally, Britain could use the Indian army to maintain its far-flung empire across the world, the entire expenses being borne by the Indian tax payers. Military expenditure had been the greatest single burden on Indian revenues, accounting for almost one-third of the budget.
Drain of wealth
In the process of fulfilling these imperial obligations, India was being drained out of her wealth, so complained the early nationalists. There were several pipelines through which this drainage allegedly occurred.
These forms of drain of wealth included:
- interest on foreign debt incurred by the East India Company,
- military expenditure,
- guaranteed interest on foreign investments in railways, irrigation, road transport and various other infrastructural facilities,
- the government purchase policy of importing all its stationery from England and
- "home charges" or paying for the secretary of state and his establishment at the India Office in London, as well as pay, pension and training costs for the civilian and military personnel.
According to some estimate, the amount of drainage was around£17 million per annum in the late nineteenth and early twentieth centuries, and point out that this represented less than 2 per cent of the value of lndia's exports of commodities in that period. But though a small amount, as the Indian nationalist Dadabhai Naoroji argued what being was drained out was potential surplus that could generate more economic development if invested in India.
Published date : 30 Oct 2020 03:12PM
