HISTORY. March 21, 2018

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1 HISTORY March 21, 2018

2 Capitalism-System in which the means of production is in the hands of an individual The economy was well balanced between agriculture and industry. Three stages of Capitalism in India Mercantile phase of Capitalism Started with the arrival of Europeans and existed till the end of 18 th century India used to receive gold and silver from the Europeans in exchange for the goods which earned India the title of Golden Bird. India occupied 24% of the world trade while England s role was only 2% in 1790 In 1947, the percentage were reversed Before the advent of the foreigners the trade & commerce was in Indian favour.

3 Industrial phase of Capitalism It actually started ever since the Industrial Revolution in Europe in 1750 s to 1850 s Charter act hastened the process of the second phase The finished goods from England were brought to India Raw material from India were exported to England Economy primarily became agricultural Led to deindustrialization Policies adopted favoured only the British industries The export of raw materials from India to England consumed both time and money

4 Financial phase of Capitalism Post 1850 Some industries were setup in India due to the presence of both raw material & markets The cost of journey and the time taken in the 2 nd phase were considerably reduced Example would be Railways, establishment of cotton & jute industries But the problem was the kind of revolution which occurred in England never took off in India & hence it is called partial industrialization A large number of cottage industries were ruined by the colonial system These industries were not replaced because the capitalists feared that if the industry in India developed, the parallel industry in Britain would be forced to shut down As a result, only few select capitalist were allowed to establish the industries Indian capitalists were also not encouraged by the government These are some of the reason why the third phase was not as successful as the 1 st & 2 nd phase of capitalism

5 Govind Ranade R.C. Dutt made drain of wealth the subject of his The Economic History of India R.P. Dutt Dinshah Wacha S.N. Banerjee Prithwishchandra Ray G Subhramaniya Iyer supported the cause of India's freedom & used his newspaper The Hindu to protest British Imperialism. Drain of Wealth Questions expected from this area: People who wrote about the drain of wealth 1 st man to write about the drain of wealth was Dadabhai Naoroji He wrote about it in a paper called The English debt to India He also wrote a book Poverty and un-british rule in India Other people who wrote were

6 2015 Who of the following was/were economic critic/critics of colonialism in India? 1) Dadabhai Naoroji 2) G. Subramania Iyer 3) R.C. Dutt Select the correct answer using the code given below: (a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3

7 Channels through which drain of wealth took place Bribes taken by Robert Clive from the Nawabs of Bengal They used to pay less than the market value while purchasing Indian goods Support the India office in London. Salaries & pensions of British personnel engaged in India. Interest paid to English companies who invested in India The English government in India borrowed money from English capitalists and they paid the interest from India s exchequer Home charges The salaries of Secretary of State Maintenance of the army and funds for waging wars even outside India Other expenses related to administration Profits earned by British capitalists through illegal channels

8 2011 With reference to the period of colonial rule in India, Home Charges formed an important part of drain of wealth from India. Which of the following funds constituted Home Charges? 1. Funds used to support the India office in London. 2. Funds used to pay salaries and pensions of British personnel engaged in India. 3. Funds used for waging wars outside India by the British. (a) 1 only. (b) 1 and 2 only. (c) 2 and 3 only. (d) 1,2,and 3.

9 Impact of Drain of Wealth Dadabhai Naoroji wrote that it was the main reason behind the poverty of the nation The drain of wealth became a big issue in the Congress session that followed The British claimed that there was no drain of wealth but they were providing services like roads, railways, health, education etc.

10 Deindustrialization Factors that led to deindustrialization Industrial revolution in England Requirement of raw materials from India Markets in India The English goods were much cheaper than the Indian goods & hence penetrated easily into the Indian markets The English traders started buying most of the raw material at a relative higher price Hence the Indian traders were facing shortage of raw material & since they had to pay a higher price of raw material, their cost of production increased

11 Implementation of discriminatory laws by the government Import duty on Indian goods in England was 200% to 400% while for the English to sell their goods in India, it was just 2% to 10% Extinction of ruling class, & Indian ruling families by the British

12 Lack of financial and technical support There were no banks or co-operative societies in India On the other hand in London alone, there were more than 600 banks at the turn of 17 th & 18 th century No technical progress made by Indians There was no sense of entrepreneurship Indian traders did not search for new markets after losing a big market in the west

13 Discrimination in freight rates Indian goods were charged higher than the English goods for transportation through railways It was prevalent everywhere, not only in railways

14 Impact of deindustrialization Indian economy, which was a balanced economy earlier, became a purely agricultural based economy Large scale unemployment The small cottage industries which were destroyed were not replaced which led to severe unemployment Industries were established only in few places like Bombay, Ahmedabad etc. due to pressure from certain Indian traders Most of the Indian traders went back to agriculture, leading to fragmentation of land holding size. This resulted in stagnation in agricultural production & disguised unemployment

15 Loss of craft industries India was very famous for crafts like brass work, Malmal of Dhaka etc, but on establishment of industrial products from England, these craft industries lost their markets which ultimately resulted in loss of culture and history.

16 Commercialisation of agriculture Agriculture I I Direct Consumption Selling in market Commercialisation Food Crops E.g.-Rice, Wheat Cash crops E.g.-Sugarcane Commercialisation existed in ancient, medieval and modern times The difference between the commercialization in 1890 s and in ancient times was its magnitude

17 Factors leading to commercialization Industrial revolution They required raw material like cotton, indigo, sugarcane which were agricultural products Later, tea was also in great demand as it acted as a stimulant for workers who worked in cold conditions Improvement in communications through rail and roads Emergence of a unified national market Linkage of markets Boost to international trade given by entry of British finance, capital, etc

18 Process of commercialization Gave advance payment to the peasants: 1 st time advance payment was made The British traders paid part-payments, around 10% to 20% in advance for growing cash crops This was a big allure as advance money was in great demand since there was no credit market The British took land on lease For growing these cash crops, intensive care and technical know-how was required They hired landless labour to work on the leased lands The wages paid to them was very low The situation in the tea gardens were very inhuman

19 Impact of commercialization Positive Indian markets linked with international markets More profits due to export of cash crops by rich peasants Improved agricultural infrastructure

Negative Shortage of food crops Exploitation of peasants Rural indebtedness Got loans with heavy interests Negative impact due to linking with international

20 Negative Shortage of food crops Exploitation of peasants Rural indebtedness Got loans with heavy interests Negative impact due to linking with international markets: If the harvest is good in some other markets, the Indian peasants were ignored Impact on land For the Indian peasant, commercialization was a forced process.

21 Development Of Modern Industry Only in the 2 nd half of the 19 th century modern machine-based industries came up in India. The first cotton textile mill was set up in 1853 in Bombay by Cowasjee Nanabhoy The first jute mill came up in 1855 in Rishra. But most of modern industries were foreign-owned. Indian-owned industries came up in cotton textiles & jute in the 19 th century & in sugar, cement etc in the 20 th century.

22 Continued The colonial factor also caused certain structural & institutional changes. The industrial development was lopsided core and heavy industries & power generation were neglected & some regions were favored more than the others causing regional disparities. These regional disparities hampered the process of nation building. Absence of technical education, the industry lacked sufficient technical manpower. Socially, the rise of an industrial capitalist class & the working class was an important feature of this phase.

23 Famines An Acute shortage of food in a given area due to natural or manmade reasons is called famine Causes Poverty causes famine or famine cause poverty? British scholars:- Famines cause Poverty Indian Scholars:-Poverty cause Famine Colonial economic policy, not using rail networks etc Between 1850 and 1900, about 2.8 crore people died in famines. Eg: period of Lytton. Vast past of central India. Great famine in Calcutta of 1943 was directly linked with 2 nd world war. Famine commission headed by Richard Strachey. Famine code was drafted in 1883 It s recommendations Food would be supplied to people would be given in famine affected area No tax Fodder for animals

24 Development of Means of Transport and Communication They were confined to bullock-cart, camel and packhorse. They introduced steamships on the rivers and set about improving the roads, Work on the Grand Trunk Road began in 1839 and completed by the 1850's. The earliest suggestion to build a railway in India was made in Madras in But the wagons of this railway were to be drawn by horses. Construction of steam-driven railways in India was 1 st proposed in It was given strong political support by England's railway promoters, financiers, mercantile houses trading with India, and textile manufacturers. It was decided that Indian railways were to be constructed and operated by private companies who were guaranteed a minimum of 5% return on their capital by GoI. 1 st railway line running from Bombay to Thana was opened to traffic in 1853.

CHAPTER-II THEORETICAL ANALYSIS OF THE BRITISH INDUSTRIAL POLICY IN INDIA

CHAPTER-II THEORETICAL ANALYSIS OF THE BRITISH INDUSTRIAL POLICY IN INDIA The present study has tried to analyze the nationalist and Marxists approach of colonial exploitation and link it a way the coal