HISTORY - Amazon Web Services...Dadabhai Naoroji wrote that it was the main reason behind the...
Transcript of HISTORY - Amazon Web Services...Dadabhai Naoroji wrote that it was the main reason behind the...
HISTORY March 21, 2018
Capitalism-System in which the means of production is in the hands of an individual
Three stages of Capitalism in India
Mercantile phase of Capitalism
Started with the arrival of Europeans and existed till the end of 18th 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.
The economy was well balanced between agriculture and industry.
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
Industrial 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 2nd 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 1st &
2nd phase of capitalism
Financial phase of Capitalism
Questions expected from this area: People who wrote about the drain of wealth
1st 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
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
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
2015
Channels through which drain of wealth took place
Bribes taken by Robert Clive from the Nawabs of Bengal
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
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.
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.
2011
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 1896.
The British claimed that there was no drain of wealth but they were providing
services like roads, railways, health, education etc.
Impact of Drain of Wealth
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
Deindustrialization
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
Implementation of discriminatory laws by the government
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
17th & 18th 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
Lack of financial and technical support
Indian goods were charged higher than the English goods for transportation through
railways
It was prevalent everywhere, not only in railways
Discrimination in freight rates
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
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.
Loss of craft industries
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
Commercialisation of agriculture
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
Factors leading to commercialization
Gave advance payment to the peasants: 1st 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
Process of commercialization
Positive
Indian markets linked with international markets
More profits due to export of cash crops by rich peasants
Improved agricultural infrastructure
Impact of commercialization
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.
Negative
Only in the 2nd half of the 19th 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 19th century & in sugar,
cement etc in the 20th century.
Development Of Modern Industry
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.
Continued
“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:- 1876-1877 – period of Lytton. Vast past of central India.
Great famine in Calcutta of 1943 was directly linked with 2nd 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
Famines
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 1831. But
the wagons of this railway were to be drawn by horses.
Construction of steam-driven railways in India was 1st proposed in 1834.
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.
1st railway line running from Bombay to Thana was opened to traffic in 1853.