Britain Does Owe Reparations: Examining the Focus of Economic Policies in Colonial India

Author: Suryansh Govind


The fundamental focus of the economic policies sought after by the colonial government was to make India a mere supplier for Britain's very own flourishing modern base. The arrangements were concerned predominantly with the advancement and progression of their nation of origin. The interests of the Indian economy were totally disregarded. Such arrangements acquired brought certain changes in the Indian economy by changing it to a supplier of raw materials and consumer of finished products from Britain.


DadabhaiNaroji upheld the theory of ‘Drain of Wealth' in the nineteenth century. The colonial period was set apart by the misuse/exploitation of Indian resources. The sole thought process of Britain to vanquish India was to own a perennial source of cheap raw materials to feed its own industrial base in Britain. Further, the British government utilized India's labor to spread its colonial base to external India. Likewise, the authoritative costs that were brought about by the British government to deal with the colonial rule in India were borne by the Indian Exchequer. Subsequently, the British principle emptied out Indian abundance for the satisfaction of its own advantages.


I. Low Economic Development

According to certain researches, the Indian economy grew at even less than two percent during 1900-50. The justification for such a low degree of advancement was that the British government was more worried about the progression of economic interests of their nation of origin. Consequently, the colonial rule transformed India’s agriculture sector into a simple provider of raw materials for British enterprises. This not just influenced the production of the agricultural sector yet additionally demolished the little manufacturing units likehandicrafts and cotton industries.

II. Backwardness of Indian Agriculture

Thedevelopment of the horticulture/agriculturalsector was pitiful. This was because of the predominance of different systems of Land Settlement, especially the Zamindari system. Under this framework, the zamindars (proprietors of land) were required to pay high revenue (Lagaan) to the British government, which they used to gather from the peasants and workers (landless workers, who were actually cultivating).

The zamindars were for the most part concerned about extracting high revenues from the laborers however they never took to improve the profitability/productivity of the land. In addition, to take care of British enterprises with cheap raw materials, the Indian workers had to grow cash crops, (for example, indigo, cotton, and so on) rather than food crops, (for example, rice, and wheat). This commercialization of agriculturenot just expanded the burden of high revenues on the helpless peasants yet, in addition, drove India to confront a lack of food grains. Hence, Indian agriculture remained backward and primitive.


India neglected to build up a sound and strong industrial base during colonial rule. The status of the Industrial sector during British rule can be all around characterized by the term ‘Systematic Deindustrialization'. The reason for deindustrialization can be credited to the destruction of India's handicraft industry and the cause for the bleak development of modern industries was the absence of investment. The conventional handiworks businesses were destroyed under the British times. The reasons for the assertion are:

1. Discriminatory Tariff Policy: During colonial rule, the British government possessed monopoly control over India's foreign exchange. The British government utilized the exchange strategy according to the interests of their home nation. The export and import exchanges were confined distinctly to India and Britain. On one hand, the exports from India provided the cheap raw materials to the British enterprises and then again, India's imports from Britain gave a virgin market to Britain's items. In one of the other manners, British enterprises have profited. Additionally, the excess/surplus created from foreign exchange was not invested into the Indian economy; rather it was utilized for authoritative and war purposes by Britain to spread their power.

2. Competition from machine-made Britain Goods: The interest for the crafted works items encountered a descending pattern in the domestic business sectors too. This was because of the rivalry from the machine-made items from Britain. This was because the products produced mechanically in Britain were comparatively less expensive and of unchallenged quality than the Indian hand-made merchandise. This limited the market for Indian enterprises.

3. The emergence of New Class: The British rule in India advocated/popularized the western lifestyle here. There was a rise of another segment of the populace (comprising fundamentally of zamindars) in India who preferred the British merchandise. This group of people used to spend luxuriously on the British items that gave impetus to the advancement of British businesses at the expense of the domestic units. Thus, bit by bit Indian ventures died away.

4. The disappearance of Princely State: Prior to the approach of the British, India was managed by regal states. They used to patronize handicraft industries and therefore, Indian handiworks acquired standing in the worldwide business sectors. Be that as it may, during the British rule, these princely states were demolished consequently destroying the assurance of these handicraft enterprises. Subsequently, step by step Indian handiworks lost their standing and their significance crumbled.


Earlier India was known as the sink of gold and silver. It was self-sufficient in agricultural and handicrafts products and had a steady market of finished products abroad. However, with the coming of British rule, the Indian economy was transformed into a colonial economy that suited the interests of the British, not the local population. India was transformed into a supplier of raw materials, a market of British manufacturers, and a field of investment for foreign capital.


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