Impact of British rule on Indian Economy

1. DECLINE OF INDIAN I NDUSTR Y
DURING B R I T I S H RULE

2. The British who came as traders became the masters of India by their
policies and strategies including interventions, conquests and alliances.
Their constant exploitation followed by suppression and corruption
resulted in the accession of power by the Queen in 1858 soon after the
mutiny.
This phase witnessed the transition from traders and later to masters
and then the rule by a foreign power in the country.
Also with the industrial revolution, this territorial expansion and
imperialistic rule completely shifted India to a source for raw materials
and a good market for finished products of British industries. All these
had brought changes in the structure of the very basis of Indian
economy and are still reflected after many years of independence.

3. Reasons for Coming to India
The European and the British traders initially came to India for trading
purposes.
The Industrial Revolution in Britain led to the increase in demand for raw
materials for the factories there.
At the same time, they also required a market to sell their finished goods.
India provided such a platform to Britain to fulfill all their needs.
The 18th century was a period of internal power struggle in India
and with the declining power of the Mughal Empire, the British officials were
provided with the perfect opportunity to establish their hold over Indian
Territory.
They did these through numerous wars, forced treaties, annexations of and
alliances with the various regional powers all over the country. Their new
administrative and economic policies helped them consolidate their control
over the country.

4. Their land revenue policies help them keep the poor farmers in check and
get huge sums as revenues in return.
They forced the commercialization of agriculture with the growing of
various cash crops and the raw materials for the industries in the Britain.
With the strong political control, the British were able to monopolies the
trade with India.
They defeated their foreign rivals in trade so that there could be no
competition.
They monopolized the sale of all kinds of raw materials and bought these
at low prices whereas the Indian weavers had to buy them at exorbitant
prices. Heavy duties were imposed on Indian goods entering Britain so as
to protect their own industry.

5. HENCE
The Indian economy under British rule underwent a phase of arrested
development. This was so,inspite of the fact that most pre-requisites for
economic development were met by India even prior to the British advent.
These were; a prosperous agriculture, significant indigenous industry,
sizable exports, abundance of minerals and ores, and above all, a surplus
which could be invested.
Thus, India had the potential for economic growth. With the advent of the
British came modern business, technology, capital, and the political
institution. The obvious question that follows is that, why did not India
experience any significant economic progress. The answer to this lies in the
nature of colonial relationship between Britain and India.

6. Before Britishers
Several economic historians have argued that real wage decline occurred in the
early 19th century, or possibly beginning in the very late 18th century, largely as
a result of British imperialism. Economic historian Prasannan Parthasarathi
presented earnings data which showed real wages and living standards in 18th
century Bengal and Mysore being higher than in Britain, which in turn had the
highest living standards in Europe.
Mysore's average per-capita income was five times higher than subsistence level,
i.e. five times higher than $400 (1990 international dollars),or $2,000 per capita.
In comparison, the highest national per-capita incomes in 1820 were $1,838 for
the Netherlands and $1,706 for Britain.
It has also been argued that India went through a period of deindustrialization in
the latter half of the 18th century as an indirect outcome of the collapse of the
Mughal Empire

7. Under British rule, India's share of the world economy declined from 24.4% in
1700 down to 4.2% in 1950.
India's GDP (PPP) per capita was stagnant during the Mughal Empire and began
to decline prior to the onset of British rule.
India's share of global industrial output declined from 25% in 1750 down to 2%
in 1900.
At the same time, the United Kingdom's share of the world economy rose from
2.9% in 1700 up to 9% in 1870.

8. The British East India Company, following their conquest of Bengal in 1757, had
forced open the large Indian market to British goods, which could be sold in
India without tariffs or duties, compared to local Indian producers who were
heavily taxed, while in Britain protectionist policies such as bans and high
tariffs were implemented to restrict Indian textiles from being sold there,
whereas raw cotton was imported from India without tariffs to British factories
which manufactured textiles from Indian cotton and sold them back to the
Indian market.
British economic policies gave them a monopoly over India's large market and
cotton resources.
India served as both a significant supplier of raw goods to British
manufacturers and a large captive market for British manufactured goods.

9. Before the British rule, India was
self-sufficient in textile and Cotton
products but during the British rule,
India fell down to the position of
importing cloth from England.

10. In the 19th century A.D. British government
abolished the tariff protection of Indian goods. The
country was reduced to the position of supplier of
raw material to British industries. In 1850 Jute mills
were established in India but there was no
economic development in the country. In the time
of 1st World War some goods, acquired by the
people were reduced in India. This gave some
industrial progress in our country.

11. The economic policies of the British Raj caused a severe decline in
the handicrafts and handloom sectors, due to reduced demand
and dipping employment. After the removal of international
restrictions by the Charter of 1813, Indian trade expanded
substantially with steady growth.
The result was a significant transfer of capital from India to
England, which, due to the colonial policies of the British, led to a
massive drain of revenue rather than any systematic effort at
modernisation of the domestic economy

12. CRAFTS

13. THE CAUSES OF DECLINE
Impact of the industrial revolution
Loss of royal patronage
Loss of external markets
Coercive tactics used by the British
Indifference of the British rulers

14. IMPACT OF INDUSTRIAL
REVOLUTION
The same goods produce in industries ,when
compared to a craftsman's goods , were very cheap.
They were also better in quality and quantity.
So these were the major factors in front of
industries ,for the slowly dying Indian crafts .

16. LOSS OF ROYAL
PATRONAGE
After the British ended their conquest in India most of
the Indian rulers were on their side .taking advantage of
this British promoted the selling of their of goods and
under influence they waived of taxes on their goods
and increased the taxes of Indian goods .
Thus losing the patronage of Indian goods

18. LOSS OF EXTERNAL
MARKETS
Due to the high taxes levied on Indian goods,
by the British, the sellers and crafters suffered
heavy losses .
And slowly Indian crafts loss their place in
external markets like:
Britain ,France ,Dutch and Arabian countries

19. COERCIVE TACTICS USED
BY BRITISH
The British forced the Indian farmers grow what
was profitable to the company not to the farmers .like
indigo which was growing good in india.it was of
huge demand in births. So it was forced to grow in
India.
Soon India like this became the largest exporter of
raw materials.

20. From the beginning of the 19th century, the British East India Company's
gradual expansion and consolidation of power brought a major change in
taxation and agricultural policies, which tended to promote
commercialisation of agriculture with a focus on trade, resulting in decreased
production of food crops, mass impoverishment and destitution of farmers,
and in the short term, led to numerous famines.

21. Indigo
Cotton

22. INDIFFERENCE OF THE
BRITISH RULERS
They treated the people of their own country
carefully while ruling India they did not even try
to help them.
For example: in Britain when artists got
displaced by industrial revolution they provided
them with certain benefits but not in India .

23. SO RESULTED IN
 In great loss to the local artisans in India .There was a huge
migrationof people from cites to villages , for primary
activities like farming .
 This put further pressure on land ,with pieces getting
fragmented .
 So the traditional crafts and products went into trouble during the
British times in front of industrial revolution .

25. REVENUE INTO BRITISH
Taxes gone in the respective year
1859=361 million rupees (today’s value $
5,415,000,000 )
1890=851 million rupees (today’s value $
12,765,000,000 )