BPSE - 212

BPSE (Government And Politics In India)
1st Part 
Block-1 (Unit-1)

Colonialism: A system where a country dominates and exploits another country in all aspects of life, especially economic.

Neo-colonialism: It is a system in which the economy of the colony gets integrated with that of the metropolitan country by the development of infrastructures like railways and transport.

Q1 What was new features to the 16-18th-century colonization?

A.   The new feature of the 16-18" century colonialism was that unlike the earlier colonialism it saw the forced incorporation of the major part of the world by a small part of it. One small part of the world with the use of force and better technology subdued a major part of the globe. A few countries like Spain, Portugal, Holland, Britain, and France established political domination over the rest of the world. Unlike earlier when the balance kept shifting between different powers, colonialism established the rule and domination of a few countries over the entire world. Before the rise of

colonialism, the level of development of many countries like India or China or some Arab countries were as high or higher than that of the colonizing powers. In fact, the Mediterranean or the Indian Ocean trade was controlled by the Arabs. It was therefore only with the colonization that the decline of countries like India begins. In a few decades, the west had established absolute supremacy in most fields over the countries.

              The exploitation of the resources of the colonies by a small number of metropolitan countries and the ruination of the economy of the colonies was another important feature of colonialism.

Q2. Describe different phases of colonialism.

A.    The defeat of Siraj-ud-Daula in 1757 at the battle of Plassey was the beginning of the colonial rule. After the battle of Buxar in 1765, the Diwani of Bengal passed into the hands of the British. (Bengal revenue circle then comprised what are now West Bengal, Bangladesh, Bihar, and Orissa). Firstly, The East India Company under the charter of the British parliament was given the monopoly of trade with the East including India. After these battles, they established political control over the conquered territories. The British used their political control to bring the economy under their direct command. Rapidly the direction of the Indian economy was changed to serve the interests of the British economy. Trade and

revenue were then the two direct means through which they exercised their control to exploit the Indian economy and transfer the surplus to Britain which was soon to enter on the stage of a long Industrial revolution. All of this had very disastrous

repercussions for India. There were 3 stages of colonialism -

1) First Stage Monopoly trade and revenue appropriation - 

The Period of East India Company's Domination, 1757-1813. The first was to acquire a monopoly of trade with India. This meant that other English or European merchants or trading companies should not compete with it in the purchase and sale of Indian products. Nor

should the Indian merchants do so. This would enable the East India Company to buy Indian products as cheaply as possible and sell them in World markets at as high a price as possible. Thus the Indian economic surplus was appropriated through monopoly trade. The English competitors were kept out by persuading the British Government to grant the East India Company through a Royal Charter a monopoly of the right to trade with India and the East. Against the European rivals, the Company had to wage long and fierce wars on land and the sea. To acquire a monopoly against Indian traders and to prevent Indian rulers from interfering with its trade, the Company took advantage of the disintegration of the Mughal Empire to acquire increasing political domination and control over different parts of the country. After political conquest,

Indian weavers were also employed directly by the Company. In that case, they were forced to produce cloth at below-market prices. 

The second major objective of colonialism - at this stage was to directly appropriate or take over governmental revenues through control over state power. The East India Company required large

financial resources to wage wars in India and on the seas against European rivals and Indian rulers and to maintain naval forces, forts, and armies around their trading posts, etc. The much needed financial resources had, therefore, to be raised in India from the Indian people. This provided another incentive to make territorial

conquests in India. For money appropriation, the first method was barred because of the British produced hardly any goods which could be sold in India in competition with Indian products. British industrial products could not compete with Indian handicraft

products until the beginning of the 19th century. It is important to note that at this stage there was no large scale import of British manufacturers into India; rather the reverse occurred, that is, there was an increase in exports of Indian textiles, etc. The weavers were, for example, not ruined at this stage by British imports but because of the Company's monopoly and their exploitation by being forced to produce for the company under uneconomic conditions. This period witnessed a large scale drain of wealth from India. This wealth played an important role in financing Britain's

industrial revolution. The drain of Wealth from India constituted 2 to 3 percent of Britain's national income at the time.

2) Second Stage 1813-1857 - Britain was after 1750 undergoing the Industrial Revolution. The newly developing industrial capitalists began to attack the East India Company and the forms of its exploitation of India. They did not gain much from a monopoly trade in Indian products or from the Company's control over Indian

revenues. They wanted India to serve as a market for their ever-increasing output of manufactured goods, especially textiles. They also needed from India exports of raw materials, especially cotton, and food grains. second stage. India must become a subordinate trading partner of Britain, as a market to be exploited and as a

dependent colony to produce and supply the raw materials and food-stuffs Britain needed. India's economic surplus was to be appropriated through trade based on unequal exchange. As a result, Britain increasingly produced and exported goods which were produced in factories using advanced technology and less labor, and in which the level of productivity and wages was high. On the other hand, India produced agricultural raw materials through backward methods of production using a great deal of labor leading to low productivity and low wages. This international division of

labor was, moreover, not only highly unfavorable to India but was unnatural and artificial. It was introduced and maintained forcibly by implementing colonial policies.

            After 1813 India's colonial economy was integrated with the British and world capitalist economy. The chief instrument of this was the introduction of free trade. All import duties in India were either totally removed or drastically reduced to nominal rates. Thus India was thrown open to British manufactures. Free entry was also now given to British capitalists to develop tea, coffee and indigo plantations, trade, transport, mining, and modern industries in India. The British Indian government gave active state help to these capitalists. The agrarian structure of India was also transformed for better revenue generation, through the Permanent Settlement and the Ryotwari systems. Many changes were now brought about in the administrative field. The administration was made more elaborate and comprehensive and it reached down to the villages and outlying areas of the country so that British goods could reach, and agricultural products are drawn from, its interior villages and remotest parts. The legal and judicial structure of India was overhauled to promote capitalist commercial relations and maintain law and order. The changes, however, related to criminal law, the law of contract and legal procedures. Personal law, including that relating to marriage and inheritance, was largely left untouched since it did not in any way affect the colonial transformation of the economy. India played a crucial role in the development of British capitalism during this stage. British industries, especially textiles, were heavily dependent on exports. India absorbed 10 to 12 percent of British exports and nearly 20 percent of Britain's textile exports.

Third Stage 1860-1947 - During this stage, Britain's position in the world was constantly challenged and weakened by the rival capitalistic countries. It now made vigorous efforts to consolidate its control over India. After 1850, a very large amount of British capital was invested in railways, loans to the Government of India, trade and to a lesser extent in plantations, coal mining, jute mills, shipping and banking in India. India also performed another important role for Britain. Its army -men and financial resources - could be used to fight Britain's rivals in the struggle for the division and re-division of the world. In fact, the Indian army was the chief instrument for the defense, expansion, and consolidation of the British empire in Africa and Asia. Politically and administratively the third stage of colonialism meant renewed and more intensive control over India. Moreover, it was now even more

important than ever before that colonial administration should reach out to every nook and corner of India. The administration now became more bureaucratically tight, efficient and extensive than earlier. Railways were built at even a faster rate.

Q3. What was the impact or consequences of colonialism?

A. Impact - First phase - the impoverishment of the peasantry - British enormously raised the share of govt. revenue collected. It has been estimated that the total revenue collected from the Bengal Diwani in the first few years of British rule was doubled whereas for the last 100 years it had remained the same which was a huge increase. It overburdened the peasantry which led to severe famines and death of a third of the population. British introduced land revenue system like -

(a)Permanent Settlement created by Cornwallis in Bengal, where the government gave over the right of revenue collection to a small number of large Zamindars who had powers over cultivators now reduced to tenants. The Zamindars had to pay to government fixed

amount which was fixed but was kept high that broke the bone of the peasantry.

(b) Ryotwari of Elphinstone in Bombay presidency and of Munro in Madras presidency where direct settlements were made with the peasant proprietors and periodic revenue assessment was made every 20-30 years. The revenue demand was kept so

high it led to the impoverishment of peasants.

Impact - The Second Phase-De-industrialisation and its Effects also ( Q. -(500 words) - developmental impact on Indian political economy.)

A.  During this phase, colonialism had a dual impact on the Indian political economy the destructive and developmental.

Destructive - Before colonization, manufacture in India was spread all over the country and were closely tied up within the agrarian economy and the relation between agriculture and manufactures was mutually beneficial. Much of the secondary manufacturers were destroyed during the course of the first half of the 19h century and during this period no new industry grew in India. From around the first decade of the 19th century, the Indian economy was integrated with the British economy, thus, India became a subordinate partner. This was achieved by the introduction of the policy of free trade. That is the exports of goods from Britain would be exempt from customs duties while goods produced in India had to pay a higher duty than those imported from Britain. Exports like cotton textiles for which India was famous all over and which they used to export in large quantities was one such example.

Within a few decades, cotton textiles completely disappeared from the list of India's exports instead of textiles from Britain that captured the markets. In the 1880s, 40% of British textiles were exported to India.

           The story was the same for other manufacturers. For silk goods, the British forced the weavers under its control to give

up weaving and replaced it with the production of raw silk as the sale of raw silk in Europe was found to be more profitable. Britain also monopolized the manufacture and sale of salt, opium (a key item in trade with China), indigo (very important in the

bleaching of cotton goods), etc. Many other manufacturers were also decimated. By the second half of the 19th-century de-industrialization was complete. Its consequence on agriculture was extremely damaging. People who were thrown out of secondary manufacturing thronged to agriculture for survival, thus land had to

support so many more people. This further led to the ruination of the already impoverished peasantry. As the number of people on land went on increasing, the relations of peasants with the landlord (or the superior owners) were worsening on the one hand and the number of landless agricultural laborers increasing enormously.                        The result of this process was immediate of a two-fold character: there was first the absolute reduction in the wages of workers in agricultural operations and then there was secondly the increase in the rent the peasants were forced to pay and in failure to pay rents led to the frequent eviction of the tenants.

Developmental - The colonialism had the following developmental impact on the Indian political economy.

First - The British Government improved river and canal systems in India. It encouraged the introduction and use of steamships on the rivers. It also tried to improve the road infrastructure. During the latter half of the 19th century, it encouraged and financed a large network of railways linking India's major cities and markets to its ports. By 1905 nearly 45,000 km. of railways had been built. Development of railway network contributed to the increase of India's economic exploitation. It was done through route alignment and fare-structure. Apart from the trunk routes linking the main cities to the capital, the railroad primarily was so aligned so as to link the interiors of the country to the port cities. It was done so that finished goods were exported into the interiors of India and raw material was procured at the cheapest possible price thus benefiting the British immensely. The fare for goods was higher if transported

between two interior places, e.g., between Indore and Gwalior but much lower. (almost half) if the same were to move from interior to the port cities, e.g. from Gwalior or Indore to Bombay or Calcutta. So that these would discourage internal trade but help external trade with Britain. That is how the British goods were supported while Indian goods were discouraged by the policies adopted leading to exploitation of India. Similarly, a modern postal and telegraph system was introduced to facilitate economic transactions.

Second - Many changes were now brought about in the administrative field. The administration was made more elaborate and comprehensive and it reached down to the villages and outlying areas of the country so that British goods could reach,

and agricultural products are drawn from, its interior villages and remotest parts. The legal and judicial structure of India was overhauled to promote capitalist commercial relations and maintain law and order. The changes were related to criminal law, the law

of contract and legal procedures. Personal law, including that relating to marriage and inheritance, was largely left untouched since it did not in any way affect colonial govt. Modern education was introduced with the objective to support the administration

and also to help transform India's society and culture. This transformation was needed for two reasons; it was expected to,

i)  create an overall climate of change and development and,

ii)  generate a culture of loyalty to the rulers.

             Thus English was introduced in schools and a new class of Indians well versed in English emerged.

Third Phase - The third important change to which reference has to be made is the development of modem irrigation networks. During the second half of the 19th century, the British govt facilitated the expansion in irrigated areas. The British govt undertook the construction of vast irrigation networks although it was confined to a few areas. By 1914, 25 million acres of land were brought under cultivation. Some significant changes in the cropping pattern were also introduced. The govt encouraged the cultivation of exportable food grains and commercial crops. Although the development of irrigation channels brought more land under cultivation more focus on growing commercial crops adversely impacted the agrarian economy. Together with the development of railways, irrigation networks, the introduction of telegraph and telephone networks and large-scale mining gave a big push to the growth of trade both within India & between India & other countries especially Britain. Therefore by 1880s fairly sizeable Indian capitalist class was getting formed and was present in many areas but largely concentrated in and around the port-towns. This led in small ways to the beginning of capitalism under Indian entrepreneurs and slow growth of modem industry.

Impact: Third Phase-Imperialism and industrialization - With an excess of capital to export available in developed countries there was intense competition among these countries to export capital to countries like India and establish industries. The idea of such competition was to make huge profits and export these to the home countries This was a way of capturing the domestic market of the colonies for the benefit of the metropolitan economy. By 1914 India had developed a good industry. These industries were wide-spread but were concentrated in a certain enclave like the Jute

Textiles around Calcutta, Cotton Textiles around Bombay, etc. This process got a big push after the first world war. The important feature in this period was that the Indian capitalist who had accumulated large capital through trade started establishing industries on their own. After the war, Britain's position relatively

declined within the advanced capitalist world and it faced strong competition from other industrial powers. The Indian capitalist wrested large concessions from Britain to start industries and also forced it to modify the one-way free-trade. As a result of it, Indian industrialists got some state protection. The rise of the mass-based national movement also helped the aspiring Indian industrialist to bargain better with Britain. By the time of the second world war, India had achieved a good measure of self-sufficiency in consumer goods as also in crude & intermediate goods like pig-iron, steel, cement, etc. Much of what was imported from Britain earlier was being produced within the country itself this pattern of industrialization has been referred to by economists as "import-substitution" industrialization.