Economic Impact of British Rule

Mercantile Phase,1757-1813

East India Company trade monopoly|Raw materials exported from India|Finished British goods imported

Industrial Phase,1813-1858

Started after Charter Act 1813|India became market for British manufactured goods|Indian handicrafts declined

Financial Phase,1858-1947

British capital invested in railways plantations mines and banking|Profits remitted to Britain

Charter Act,1813

Ended East India Company's trade monopoly except tea and China trade|Beginning of Industrial Phase

Deindustrialization

Decline of Indian handicrafts due to competition from machine-made British goods

Drain of Wealth

Unrequited transfer of Indian wealth to Britain without adequate return

Dadabhai Naoroji

Propounded Drain Theory|Author of Poverty and Un-British Rule in India|Grand Old Man of India

R.C. Dutt

Supported Drain Theory|Criticized British economic policies in India

Sources of Drain

Home Charges|Remittances by British officials|Interest on public debt|Profits of British companies

Home Charges

Expenses incurred in Britain but paid from Indian revenues|Major source of Drain

Permanent Settlement,1793

Introduced by Lord Cornwallis|Implemented in Bengal Bihar and Orissa|Also called Zamindari System

Permanent Settlement Features

Revenue fixed permanently|Zamindars recognized as landowners|Peasants had no ownership rights

Ryotwari System

Introduced by Thomas Munro and Alexander Read|Implemented in Madras and Bombay Presidencies

Ryotwari Features

Direct settlement between government and cultivator|Ryot recognized as proprietor

Mahalwari System

Introduced by Holt Mackenzie in 1822|Modified by R.M. Bird|Implemented in North-Western Provinces and Punjab

Mahalwari Features

Settlement made with village community or mahal|Revenue revised periodically

Land Revenue Systems

Permanent Settlement-Zamindar based|Ryotwari-Cultivator based|Mahalwari-Village community based

Economic Impact of British Rule

Deindustrialization|Drain of Wealth|Agricultural exploitation|India became supplier of raw materials and market for British goods