6th Part
Q Write a note on the de-industrialisation in India. 20
A De-industrialization refers to the process of a continued and marked industrial decline. The proportion of the national income generated by industries and the percentage of population dependent on it are used as measures to determine industrial growth or decline. An increase in these data suggests industrialization while a decrease indicates industrial decline or de-industrialization. The Indian Nationalists used the data on the destruction of Indian craft industries under early British rule to substantiate their point that de-industrialization took place under the British rule.
Industries before British rule -
In India, Cotton textiles were produced virtually all over the country and were one of the important items for export. Dyestuffs (predominantly indigo) and sugar were the other important commercial industrial products. The other significant agro-based industries included oils, tobacco, opium, and alcoholic beverages. Although the mining industry was not fully developed yet India was self-sufficient in iron. Shipbuilding was another important and developing industry.
The Nature of Early Trade with Europe -
Early European trade with India was heavily balanced in India's favor. The seventeenth-century witnessed the Indian cotton textiles replacing pepper and other spices to become the most important item exported to the west. European trade with India up to the first decade of the nineteenth century was based upon the price differential between Asia and the rest of the world. That is European merchants bought goods at a low price in India and sold them for a much higher price in the European, African and New World markets. The profits were based on the difference between the purchase price and the selling price. Since there was no demand for British or European exports in India the purchases of Indian goods had to be financed in gold and silver.
Monopoly
Gradually this situation started changing once British EIC eliminated all the other rival companies. Now the Indian merchants and traders were also barred from dealing in certain communities and thus the monopoly of the company was established. Thereafter it started harassing weavers and artisans who were bullied to supply the goods below the market price. Thus the artisans were reduced step by step to the position of bonded labourers by the denial of free access to the market. They were forced to supply their produce to the Company at low prices arbitrarily fixed by the Company.
Impact
The East India Company's objective was to buy the maximum quantity of Indian manufactured goods at the cheapest possible price so that substantial profits can be made by selling these goods in Britain and other foreign countries. The reckless and anarchic methods to increase their purchases while forcing down the price had an adverse impact on the traditional Indian export industry, especially the cotton textile industries.
Process of De-industrialization
There were two ways by which Indian industries were severely impacted by British policies -
# Firstly the Company depressed the purchase price of cotton manufactured goods in India thereby virtually reducing the weavers to the status of bonded labourers. They were forced to take advances from the Company and sell their products below market prices. This severely affected the textile industry as well as the economy as a whole. Forcible reduction of purchase prices in India was resorted to by the East India Company to increase the difference between its buying and selling price and consequently increase its trading profits.
# Apart from this exploitation of the Indian industries by the Company, during this period, British textile manufacturers at home launched an agitation to force the British Government to impose restrictive import tariffs and bans on the import of fine Indian textiles. Thus the import of Indian silks products and other goods were prohibited into Britain. The duty for home consumption of Indian goods was very heavy. The import restrictions on Indian textiles in England further weakens this industry. As a result, the income of weavers and spinners were drastically reduced, thereby ruling out any possibility of capital investment and technological upgradation in this traditional industrial sector.
The Company's exploitative policies and the import restrictions on Indian manufactured goods into Britain led to the decline of industries in India.
While India's traditional manufacturing sector was being steadily weekend under the Company, in the same period Britain was undergoing the Industrial Revolution. Britain rapidly expanding its industries by adopting new technology as well as the organization of production. The growing British textile industry had all the advantage which were denied to its Indian counterpart. It had the advantages of economies of scale and finally, it was carefully protected in its formative years from foreign competition.
Q Write a note on the economic impact of the British rule. 12
Q Critically examine the economic impact of the British rule on India. 20
A The economic impact of the British rule on India was devastating, some of its impacts were -
SUBORDINATION OF 'NATIVE' CAPITAL
The early European traders required the help of the Indian 'native' traders for business. In the middle of the 18th century, there were flourishing native business communities in many parts of India that were engaged in various kinds of commercial activities. They were needed for the procurement of goods for export. But, as the English East India Company began to spread in India, some of these lines of the business began to close for Indian business communities. Due to political hegemony and a dominant position as the chief buyer of export goods, the local trader's position was reduced to that of dependent agents and, in some branches of trade, to the status of servants of the English.
The decline of export industries in the early half of the 19th century further restricted the opportunities for Indian businessmen. In the new lines that were opening up (e.g. jute and opium), a role subordinate to the English business houses was assigned to Indian businessmen. Petty money lending, internal trade in agricultural and artisanal products, the sale of imported manufactured goods - these were the areas of activity of Indian businessmen in Bengal in the first half of the 19th century.
Monopoly and ruining of Artisans -
Up to the middle of the 18th century, the weavers appear to have enjoyed Independence and freedom to sell their products to the English, the French or the Dutch or to Indian merchants. After the elimination of the French and the Dutch from the competition by military means, the British enjoyed monopoly of trade.
Factors of the company started harassing weavers and artisans who were bullied to supply the goods below the market price. Thus the artisans were reduced step by step to the position of bonded labourers by the denial of free access to the market. They were forced to supply their produce to the Company at low prices arbitrarily fixed by the Company.
The decline of the rural economy -
Land revenue system followed by the British destroyed the rural economy as the land rents were kept at the highest thus squeezing the maximum out of agriculture produce. With the onset of the industrial revolution in Britain commercialization of agriculture was stressed upon. In the ryoti system, the peasants was forced to cultivate and supply indigo at a low price by the English indigo planters. To a lesser degree, opium was also produced under the threat of coercion. The forced cultivation of commercial crops for export in place of food grains was one of the major factors for famine during this time period.
De-industrialization - already discussed
Q What were the causes of famine in British-India? 12
A Some of the causes of famine were-
# With the onset of the industrial revolution in Britain commercialization of agriculture was stressed upon. In the ryoti system, the peasant was forced to mark a part of their land by the English indigo planters for growing commercial crops while only a small portion was assigned to grow food grains for his family. To a lesser degree, opium was also produced under the threat of coercion. The forced cultivation of commercial crops for export in place of food grains was one of the major factors for famine during this time period. From the middle of the 18th century, a number of major famines occurred in India because of it.
# In the 18th and early 19th centuries an important factor for the famine was the devastation caused by frequent warfare between the British and various regional powers. Warfare leads to loot and plunders in rural areas causing famine.
# In the part of the country which was ruled by the British there was a tendency in the early days of British administration, to push up land revenue demand to the highest level. Moreover, the British collected the revenue with greater rigour in comparison to the pre-British days. They also refused to reduce revenue as a concession to farmers in a bad season. This inflexibility of revenue policy was certainly a major cause of famine in Bengal in 1770, apart from the failure of the seasonal rains. Due to higher revenues even in mean seasons, farmers give up their land and migrate to neighboring areas thus leading to less production of food-grains.
# The activities of the English traders and their agents have also contributed to the intensity of famines in some cases. For ex. speculation in grain trade by the Company's servants in 1770 in Bengal was one of the reasons for famine.
# The neglect shown by the British administration to maintain or expand the pre-British irrigation works in the territories that come under their rule led to the decline of agriculture. As the only focus of the government was to increase the revenue and extract it, the canals and other irrigation works were neglected leading to droughts during lean years.
Q Drain of wealth 6
A Drain of wealth' means the unilateral (one-sided) transfer of funds. It was the portion of India's wealth and economy that was not available to Indians. After attaining complete control over Bengal, East India Company started collecting money in the form of taxes. However, the Company used the money collected to invest in its business (for purchasing Indian goods). As a result, the company was getting Indian goods for sale in Europe for nothing. The company was collecting a tribute from its territories in India in the form of goods. It can be called a 'political tribute' - a 'tribute' because for this India obtained nothing in return and thus it was not normal trade. It was 'political' because it was the Company's political power that enabled it to collect revenue to invest in its business. This system operated in full swing from 1765 till 181 3 when the Company's monopoly was abolished. The money transfer also included earnings of Englishmen from plunder and loot during wars, bribery obtained from regional principalities, and fraudulent dealings with Indian business partners.
Q Subsidiary Alliance 6
A Subsidiary Alliance is a system of ruling a subjugated nation by British. The main principles of a subsidiary alliance were:
1. An Indian ruler entering into a subsidiary alliance with the British had to accept British forces in his territory and also agreed to pay for their maintenance.
2. The ruler would accept a British people in his state, such a ruler would not form an alliance with any other power, nor would he declare war against any power without the permission of the British.
3. The ruler would not employ any Europeans other than the British, and if he were already doing so, he would dismiss them.
4. In case of a conflict with any other state, the British would decide what to do, and he would accept their solution.
5. The ruler would acknowledge the East India Company as the power in India.
6. In return for the ruler accepting its conditions, the Company would undertake the protection of the state from external dangers and internal disorders.
7. If the Indian rulers failed to make the payments required by the alliance, then part of their territory was to be taken away as a penalty.
8. Under this doctrine, Indian rulers under British protection surrendered the control of their foreign affairs to the British. Most disbanded their native armies, instead, they started maintaining British troops in their states to protect them from attack. As British power grew, in most parts of India this became increasingly unlikely.
9. The system also allowed the British to maintain a large army at the expenses of the local ruler. Due to this system the company was able to maintain a large army without much financial burden.
Q How did the industrial revolution in England affect India? Explain. 12
A Before the Industrial revolution the European trade with India was heavily balanced in India's favor. The seventeenth century saw Indian cotton textiles rapidly displacing pepper and other spices to become the most important Asian, import into the west. European trade with India up to the early years of the nineteenth century was based upon the price differential between Asia and the rest of the world. That is European merchants bought goods at a low price in India and sold them for a much higher price in the European, African and New World markets. The profits were based on the difference between the purchase price and the selling price. Since there was no demand for British or European exports in India the purchases of Indian goods had to be financed by bullion payments. India had developed agro-based industries including cotton textiles, Indigo, oils, tobacco, opium, and alcoholic beverages.
But after the Industrial Revolution took place in Britain, British textile manufacturers at home had begun to force the British Government to impose restrictive import tariffs and bans on the import of fine Indian textiles. The British manufacturing interests had successfully prohibited the import of Indian silks and other goods into Britain. The duty for home consumption of Indian goods was very heavy. The import restrictions on Indian textiles in England further weakens this industry. The income of weavers and spinners were drastically reduced, thereby restricting any possibility of capital accumulation and technological innovations in this traditional industrial sector.
The Company's own shortsighted exploitation and the free trader inspired sanctions against Indian manufactured imports into Britain resulted in a progressive decline in the share of Indian manufactured goods.
While India's traditional manufacturing sector was being steadily weekend under the Company, in the same period Britain had begun its Industrial Revolution and was rapidly expanding its industries by revolutionizing its technology as well as an organization along with principles of capitalist production. The growing British textile industry had all the advantage which were dented to its Indian counterpart. The British industry had a rapidly developing technological base, it had the advantages of economies of scale and finally, it was carefully protected in its formative years from foreign competition.
Thus, the Industrial revolution had a cascading impact on the growth and development of industries in India.
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