Indian Economy : British Impact
Angus Maddison, a distinguish British economic historian, specializing in quantitative macro economic history including the measurement and analysis of economic growth, after decades of research published his book ‘Contours of the World Economy 1–2030 AD”. The results of his research astonished the world. He states that India’s share of world GDP at purchasing power parity was more than 25–30 percent throughout CE 1 to 1700. India’s GDP was stagnant in Mughal Empire and started to decline in 1700. In British period it declined from massive 24.4 percent in 1700 to meagre 4.2 percent in 1950.
The British regime had a pronounced and profound economic impact on India. The British conquest of India directly differed from all previous foreign conquests. The previous conquerors had overthrown Indian political powers but had made no basic changes in the county’s socio-economic structure. The peasants, the artisan and the trader had continued to lead the same type of existence as before. Hence, the change of rulers had merely meant change in the personnel of administrative mechanism. But the British conquerors were entirely different. They totally disrupted the traditional socio-economic structure of the Indian villages.
Throughout the historical ages, Indian village remained a unique and remarkable socio-economic organization. The villages enjoyed a self-contained and self-sufficing existence. One of the remarkable historians, Elphinstone had described Indian villages as “Little republics, having nearly everything they can want within themselves.” The needs of the village community were satisfied either within the village or by the neighboring villages. The simple needs of the villager could be met by craftsmen or small traders. Traditionally, the cultivator purchased his cloth, oil or pot by paying in grain. Other professional groups of the society were also paid a fixed annual share of grain. This procedure of mutual exchange has been termed as barter system. The barter system acted as hedge against inflation. At the time of harvest, the cultivators appropriated his produce for land revenue, contribution of village temple, share of professionals like barber, ironsmith, carpenter etc. being annual charges of their services.
Whatever any particular village community could not produce itself, the adjacent village or villages could supply. If the needs could not be satisfied within the immediate vicinity, there was a periodical or weekly market of various neighboring villages, where the required commodities could be available. Moreover, there was the annual fair to which the inhabitants of a number of villages eagerly looked forward to buy commodities of a specialized nature or technique. Every household has a cottage industry of its own. The traditional skills were passed on from generation to generation. The caste played a major role. Every community has skills of its own. The people including women and children use their time gainfully in these activities as agriculture kept them partially employed only.
The Land revenue was collected as certain percent of produce, it was collected by local Jamidar through village Panchyats. The judicial and administration of the villages was in the hands of Panchayat. Panchs were so much respected that they were treated as representative of God in their role. The cost of administration was negligible. Jamidar’s, local Raja employed a few persons. No large standing army was maintained. At the time of need they called upon their relatives and faithful and a small army was collected.
From their beginning, as political masters, the English Company relied on land revenue as the principal source of income. The collection of land revenue was auctioned to the highest bidder and a non-cultivating intermediately was introduced. The land revenue was collected in cash. The peasant cultivators who suffered most, were forced to pay very high rent. They were compelled to pay many illegal dues and were often required to perform forced labor as there was no control on rant collectors. The cultivators were also forced to cultivate crops like cotton, opium and indigo required for industrial production.
Due to the exploitative nature of the British rule, moneylenders emerged as an influential economic and political force in the country. Without the help of moneylender neither excessive land revenue could have been collected nor could the agricultural produce be brought to the ports for export. The moneylenders, manipulated the new judicial system and the administrative machinery to his advantage and the government, helped him. By the end of the 19th century, the moneylender had become a major curse of the countryside and an important cause of the growing poverty of the rural people. The entire process became a vicious circle. The pressure of taxation and growing poverty pushed the cultivators into debt which in turn increased their poverty. In fact, the cultivators often failed to understand that the moneylender was an inevitable cog in the mechanism of imperialist exploitation and turned their anger against him as he appeared to be the visible cause of their impoverishment. For instance during the Revolt of 1857, wherever the peasantry rose in revolt, quite often its first target of attack was the moneylender and his account books.
Moreover, the introduction of centralized administration, the codified revenue arrangements and the extension of modern means of communication broke the isolation and identity of the villages. Local produce began to be exported and the imports found their way in the countryside. The village based cotton-weaving and spinning cottage industries were the worst hit. Silk and woolen textiles fared no better and a similar fate overtook the iron, pottery, glass, paper, metals, guns, shipping, oil-pressing, tanning industries, etc. This collapse was caused largely by competition with the cheaper imported machine-goods from Britain. The ruin of Indian industries, particularly rural artisan industries, proceeded even more rapidly once railways were built. The railways enable British manufactures to reach and uproot the traditional industries in the remotest villages of the country As the American writer, D.H. Buchanan has put it, “The armour of the isolated self-sufficient village was pierced by the steel rail, and its life blood ebbed away.” Millions of rural artisans, who lost their traditional livelihood on this account, became agricultural laborers on petty tenants holding small plots. They also added to the pressure on land. The number of agricultural laborers was very large and was rapidly growing. They lived a life of abject poverty. They were treated as the most backward, the most exploited and the most neglected class in the social structure. Indeed, they formed the weakest link in the chain of rural economy.
Drain of resources from India to England was one of the economic consequences of British rule in India. Indian national leaders have criticized the British rulers of India for the massive drain of wealth from their country to England during their rule. Two world wars were financed by Indian money. DadaBhai Naoroji termed it as the major and sole cause of India’s poverty. More than 60 Million people died in recurring famines in India during British rule. Their blood should be on British conscience.
