Colonialism

Meaning of Colonialism:
Colonialism, as a historical phenomenon of territorial expansion, is
intimately connected with the rise and growth of the modern
capitalist world system.

So it is entwined with history, economics, politics, etc., of the

modern capitalist society.

Colonialism is a complex phenomenon of capitalist expansion.

In a narrow sense, colonialism refers to the process of control of

supplies of raw materials, mineral resources, and markets in
underdeveloped and pre-capitalist regions. Such narrow definition
of colonialism overlooks a vital aspect of colonialism relating to
political activity and the drive for dominance over the daily lives of
the people of colonies.

In a modern sense, colonialism is a general description of the state

of subjection—political, economic, intellectual—of a non-European
society as a result of the process of colonial organisation.
Colonialism deprives a society of its freedom and its earth and,
above all, it leaves its people intellectually and morally disoriented.

Colonialism, as a historical phenomenon, refers to foreign

domination which implies that the colonised area is regulated in a
manner known as ‘unequal exchange’. Colonised societies are
intended to serve the interests of the ruling country. Thus, by
colonialism, we mean a system of political and social relations
between two countries—of which one is the ruler and the other is its
colony.

So colonialism refers to foreign domination in social, economic, and

political policies of the colony countries. Obviously, the destiny of
the colony is governed by the policies of the foreign country so as to
sub-serve the interests of the ruling country.

The economic and social development of a colonial country is

completely subordinated to the ruling country. Colonial economy is
stripped off all independent economic decisions. The development
of agricultural, utilisation of the country’s vast natural resources, its
industrial and tariff policies, trading relations with foreign
countries, and so on are left into the hands of the ruling country.

In summary, economic policies of colonies conform to the interests

of the rulers and not of the subjects. Obviously, this unequal
relationship between these countries results in a state of
underdevelopment of the colony. India was the largest colonial
possession of Britain. She was able to exploit India for nearly 200
years—1757 to 1947.

Basic Features of Colonialism in India:

Colonialism in India, as a historical phenomenon, was as modern as
industrial capitalism in Britain. Further, colonial Indian economy
had been integrated with world capitalism. The historical process
that led to colonial integration of India with world capitalist
economy inevitably led to the underdevelopment of India, or “the
development of underdevelopment.” Above all, Indian
economy and her social developments were completely tied to the
British economy and social development.
According to the wishes and whims of the British State situated in
London the Indian economy was managed. The Government was
not well fitted to the task of bringing about a favourable change. As
soon as industrial revolution in England got momentum, Great
Britain was transformed into a leading nation of the world. On the
other hand, India was transformed in a skilful way into a leading
backward colonial country of the world.

Of course, these two processes are not independent of each other—

at least in terms of cause and effect. In this connection, it is to be
pointed out here that the colonial integration with the world
capitalist economy occurred during the 19th century on the plea of
modernisation, economic development, and transplantation of
capitalism in India.

To safeguard the interests of the British Government, India was

transformed into a chief market for British manufactured articles.
India’s industrialisation was scrupulously thwarted. India became a
rich source of supply of raw materials for Britain’s industries.

In fact, India was made “supplier of anything and everything,

mender, repairer of all things on earth, but maker of
none.” India became the solid as well as the most remunerative
field for investment of British capital.
The claim that Britain was an agency of ‘modernisation’ had been
belied by the all-round British control over the entire transport
system, banking and insurance business, industries and mines,
foreign trade, and what not. The benefits of all these services flowed
to Britain while putting India in a grave situation. Thus, what
development took place in India during the British rule was
extremely unpalatable to India. What emerges from this discussion
is that colonialism is not to be identified only with political control
or colonial policy. It is something more than that. It is best seen as a
totality or a unified structure.

Colonial India had the following four basic features:

Firstly, colonialism was the complete but complex integration and
enmeshing of India’s economy and society with the world capitalist
system carried out for a period of roughly 200 years in a
subordinate or subservient position. It is to be noted here that
dependence or subservience of the colonial economy and society
was the crucial or determining aspect “and not mere linkage or
integration with world capitalism or the world market”.

Secondly, “colonialism in India is encompassed by the twin notions

of unequal exchange (Aghiri Emanuel) and internal disarticulation
of the economy and the articulation of its different disarticulated
parts, through the world market and imperialist hegemony, with the
metropolitan economy (S. Amin and Hamaz Alvi).”

In fact, this was one of the principal forms of colonial exploitation

through which India led British industries by supplying raw
materials and foodstuff and bought manufactured goods from
biscuits, shoes to machinery, cars and railway engines from Britain.
As a result of this ‘unequal trade policy’, India was increasingly
reduced to the status of an agricultural appendage and a
subordinate trading partner of Britain in the latter part of the 18th
and the earlier part of the 19th century.

Thirdly, as far as the process of economic development is

concerned, .the generation as well as utilisation of economic surplus
is crucial for any economy. The advancement of the Indian economy
had been largely halted during the British regime due to the low
availability of actual social surplus or internal savings available for
investment in the economy. Such scarcity of internal savings is
attributed to drain of wealth or unilateral transfer of surplus to the
metropolis through unrequited exports.

The fourth basic feature of colonialism “was the crucial role

played by the colonial state in the subordination of India
to Britain and in construction, determining and
maintaining other features of the colonial
structure.” Being an important colony of Britain, India was
managed and administered by Britain.
India’s policies were determined in Britain not for the interests of
India, but for the British economy and society. As a result of such
active state policy in various fields, British economy prospered at
the expense of the Indian economy.

It has been already pointed out that the Indian colonial economy
passed through three distinct successive phases (of trade, industry
and finance) during which the phenomenon of ‘subordination’ was
vividly felt. But this did not mean that ‘forms’ or ‘patterns’ of
subordination remained constant.

Over time, forms or patterns of subordination underwent changes

with the changing conditions of the historical development of
capitalism as a worldwide system, the place of Britain within this
system, and the development of colonialism in India. Appropriation
of social surplus was another hallmark of colonialism.

Like subordination, the appropriation of India’s social surplus by

Britain was a constant and regular phenomenon though its forms
underwent changes with the changes in stages of British
exploitation of this country. In view of this, Bipan Chandra holds
that the stages of colonialism in British India were basically
differentiated by the patterns of subordination or subservience and
surplus appropriation.

However, colonialism in India, as a structure or social formation,

was beset with inner contradictions right from the beginning, the
character of which changed with the changes in stages.

“Crucial contradiction came into being between the need to make

India a reproductive colony on an extended scale in order to sub-
serve the interests of British industrial and finance capital and the
objective consequences of capitalism producing the opposite result
of under developing India. This, in turn, led to the basic or central
contradiction between colonialism and the Indian people, leading to
the struggle for national liberation.”

British Colonial Rule on the

Indian Economy
British Colonial Rule: Impact # 1.
Destruction of Indian Handicrafts:
The Industrial Revolution in England created a serious impact on
Indian economy as it reversed the character and composition of
India’s foreign trade. This led to destruction of Indian handicrafts
although there was no substantial growth of modern factory
industry.

The factors which were responsible for the gradual decay of Indian
handicrafts were—disappearance of princely courts and their
patronage, aggressive trade policy of the East India Company and
the British Government, increasing competition of British
machine—made goods and increasing demand for Western
commodities as a result of foreign influence.

The destruction of Indian handicrafts created a vacuum in Indian

markets which was subsequently fed by British manufactured
goods. The destruction of Indian handicrafts led to serious
unemployment problem and the weavers were most seriously
affected.

Moreover, this unemployed craftsmen and artisans could not find

any alternative occupation open to them and thus they had to return
to agricultural sector leading to ‘progressive ruralisation of India’.
Thus, this dependence of population on agriculture gradually
increased from 55 per cent in 1901 to 72 per cent in 1931 and this
led to progressive sub-division and fragmentation of agricultural
holdings.

British Colonial Rule: Impact # 2.

New Land System:
New land system of the British ruler also created a serious impact
on the Indian economy. During the East India Company rule, the
company administrators imposed land revenue at exorbitant rates
and thereby realised larger returns from land.

Thereafter, the British Government introduced the land settlement

in 1793. Permanent settlement was introduced in Bengal and other
neighbouring areas, and then gradually extended to other states.
This settlement led to introduction of zamindary system where
zamindars were responsible for collecting and remitting the land
revenue to the British rulers.

Later on, another system known as ryotwary settlement was also

introduced in Bombay and Madras and then subsequently to north-
eastern and north-western India where peasant landlords were
directly responsible to the state for the annual payment of land
revenue.

Under both these systems, the land revenue or the rent fixed was
excessively high and this led to destruction of the organic village
community in India.

In this connection, Daniel and Alice Thorner wrote, “Whereas the

zamindary system made the landlords masters of the
village communities, the Ryotwary system cut through the
heart of the village communities by making separate
arrangement between each peasant cultivator and the
state”.
Thus the new land system of the British created a class of absentee
landlords making way for exploitation of the peasants. Thus both
the zamindary system and the Ryotwary system introduced by the
British led to the concentration of economic power in the hands of
few. This resulted total depression in agriculture and industry.

British Colonial Rule: Impact # 3.

Commercialisation of Agriculture:
Commercialisation of Indian agriculture during the British period
created a serious impact on the Indian economy. Commercialisation
of agriculture indicates production of various crops not for home
consumption but for sale. Industrial revolution in Britain had raised
the demand for agro-raw-materials, especially raw cotton, jute,
sugarcane, groundnuts etc. for British industries.

As the British industries were offering higher prices for commercial

crops the peasants gradually started to shift their cropping pattern
substituting commercial crops for food crops. In some areas
commercialisation of agriculture reached to such an extent that the
peasants even could not produce food crops for their home
consumption and started to purchase foodstuff from the mandis.

Moreover, the development of irrigation also intensified the

commercialisation of agriculture in India.

British Colonial Rule: Impact # 4.

Development of Railway Network:
The development of an elaborate railway network primarily
intensified the commercialisation of agriculture and on the other
hand brought foreign machine made manufactures to India. This
sharpened the competition of machine made goods with Indian
handicrafts which resulted into total destruction of Indian
handicrafts industry.

British Colonial Rule: Impact # 5.

Occurrence of Famines:
Indian economy was facing occurrence of famines too frequently
during the British rule. Commercialisation of agriculture reduced
the production of food grains by transferring land from the
cultivation of food crops to non-food crops like industrial raw
materials. The new land system worked as a built-in-depressor as it
retarded the process of agricultural development.

Moreover, the destruction of Indian handicrafts increased the

pressure of population on land. All these led to frequent occurrence
of famines in India causing untold misery and suffering for the
Indian cultivators and general people.

British Colonial Rule: Impact # 6.

Transforming Trade Pattern:
Colonial exploitation of the Indian economy by the British
transformed the pattern of trade in India to become an exporter of
raw materials and foodstuffs and an importer of manufactures.
Moreover, colonial exploitation through the entry of British capital
and finance capital and also through the payment for the costs of
administration led to huge economic drain of India weakening the
base of Indian economy.

Thus the British rule in India was a long history of systematic

exploitation of Indian people by the imperialistic Government.

Colonial Exploitation in India:

Forms and Consequences
In this article we will discuss about colonial exploitation
in India. After reading this article you will learn about:
1. Forms of Colonial Exploitation 2. Consequences of
Colonial Exploitation 3. Periods of British Colonialism
and the Exploitation in India.
Forms of Colonial Exploitation:
In India, colonial exploitation is a long history spread over nearly
200 years. It would be better to look at the forms of colonial
exploitation in India and its consequences.
Exploitation of India which was started initially in the form of trade,
later on other forms of exploitation were made through investment
income in the form of dividends and profits and through payment of
costs of British administration in the form of home charges. These
included salaries of British army and civil officers, payment of
pensions, furloughs and other benefits and also payment of interest
on Sterling debt.

Thus the main forms of colonial exploitation in India

were:
(i) Trade policies with the objective of developing a colonial pattern
of trade in which India became an exporter of primary products like
raw materials and food stuffs and an importer of manufactures;

(ii) Encouragement of British Capital to participate in direct

investment in Indian consumer goods industries;

(iii) Encouragement of finance capital in the country through

Managing Agency System for appropriating a major portion of the
profits through various malpractices; and

(iv) Forcing India for paying the costs of British administration and
also to finance the wars and expeditions conducted by the British
Government.

(i) Exploitation through Trade Policies:

Various trade policies enforced in India by the East India Company
and then by the British Government resulted huge drain of wealth
from India so as to facilitate the growing British industry with the
supply of raw materials from India and also encouraging
commercialisation of Indian agriculture in order to transform
Indian economy into a British colony.

Thus the major trade policies which resulted huge

exploitation of India were as follows:
1. Colonial Exploitation of Indian cultivators by the East India
Company through its indigo planters to boost indigo exports by
compelling the zamindars and cultivators to go for indigo
cultivation.
2. Colonial Exploitation of artisans through the agents of East India
Company for delivering cotton and silk fabrics at a price much
below the market price. Under that situation, artisan had to work in
inhuman condition like bonded labour.

3. Colonial Exploitation through manipulation of import and export

duties by the British rulers so as to destroy the supremacy of the
Indian goods, especially cotton and silk fabrics over the British
goods and then to succeed ultimately in penetrating into the Indian
market through its machine made goods.

Accordingly, heavy import duties were imposed on Indian goods

excluding raw materials and foodstuffs but a very nominal rate of
import duties were imposed on British manufactures into India.

(ii) Exploitation through Export of British Capital to India:

The second form of colonial exploitation of India by the British was
through investment by exporting British Capital to India.

The main three reasons for exporting British Capital into India
were—development of efficient system of transport and
communication; developing public utilities like generation of
electricity and water supply works for exploiting natural resources;
and to promote foreign trade through quicker disposal of goods by
linking railways with major parts and marketing centres or mandis.

The main fields of foreign direct investment into India

include:
(1) Development of infrastructural projects such as railways, roads,
communications, port, shipping, water works, generation of
electricity;

(2) Promoting mining of coal, petroleum, gold and development of

metallurgical industries;

(3) To promote investments in consumer goods industries such as

cotton and jute textiles, woollen textiles, paper, matches, tobacco,
sugar etc.;
 (4) Promoting commercialisation of agriculture and undertaking
investments in tea, coffee and rubber plantations;

(5) Investments in machine building, engineering industries and

chemicals; and

(6) Investments in banking, insurance and trade.

British multinationals made all these investments through its

subsidiaries. Again a part of these investments were in the form of
loans to the British Government in India in terms of sterling debts.

Thus the two major forms of British investment in India

were:
(i) Private foreign direct investment in mining, mills and
plantations and

(ii) Sterling loans given to British Government in India and public

and semi-public organisations for undertaking infrastructural and
public utility projects.

Estimate of Foreign Capital:

Although various estimates of foreign capital were made but they
suffer from various limitations.

Following are the three important estimates of foreign

capital in India:

Among these three estimates, the estimates of Findlay Shirras

(1929) and British Associated Chamber of Commerce (1933) were
considered fairly reliable. It was observed that as per estimates of
Findlay Shirras, total amount of foreign capital in India was £ 500
million in 1929 and that of British Associated Chamber of
Commerce was £ 1000 million, which was about 20 per cent of the
total British foreign investments.
The Chamber of Commerce estimate revealed that out of the total
investment of foreign capital in India, 38 per cent was in the form of
Sterling debt of the Government, 50 per cent in companies
registered outside but operating in India and 12 per cent in
companies registered in India and the rest.

After the Second World War, Indian businessmen earned huge

profits in industry and business and that enabled them to buy
foreign business investments in India. As a result, there was a
decline in the magnitude of foreign business investments in India.

The Reserve Bank of India also made an estimate of foreign

investments and accordingly on 30th June 1948, published its first
Census of India’s foreign liabilities and assets. As per RBI estimates,
total foreign business investments in India was to the extent of Rs
302 crore, out of which British investments were Rs 230 crore, i.e.,
around 72 per cent of the total investments.

British investments in India during pre-independence period thus

revealed that British took a lot of interest in developing economic
infrastructure for maintaining administration and promotion of
trade. Moreover, the British investments never promoted any basic
and heavy industries rather these investments were mostly made
consumer goods industries and also for processing primary produce
for its export.

Finally, British tried to keep the ownership and management of its

industries in their hands and Indians were placed in all low level
and maintenance jobs.

(iii) Exploitation in the Form Finance Capital via the Managing

Agency System:
At the end of nineteenth Century, British investors started to invest
a huge amount of their capital in India, a major portion of which
was actually looted earlier from India by the East India Company.
British rulers invited British capital for the growth of railways in
India and gradually repaid these loans by imposing taxes on the
Indian people.
Moreover, British capital increased the demand for British capital
goods like iron and steel, machine and tools, coal etc. for Indian
railway.

As the plantation industries, viz., tea, coffee and rubber were very
much profitable in India, British capitalists had also invested a huge
amount of capital on these industries, more particularly on tea
industry. After that British capitalists also invested their capital on
some other industries such as petroleum, coal, tramways, banks,
sugar, textile, paper etc.

Thus with the sole intention to strengthen British economy the

British rulers showed considerable interest towards the
establishment of all these industries mentioned above.

As Indian business houses were not having any experience of the

organisation of modern industry by setting up joint stock
companies, the British merchants having trading firms mostly
worked as promoters and pioneers in setting different industries
like jute, coal and tea. These merchants were known as managing
agents.

The managing agency firms can be defined as partnership of

companies formed by a group of persons having huge financial
resources and business experience. They are entitled to the entire
management affairs of the company.

The main functions of managing agents were to float new concerns,

to provide fund and arrange finance, to act as agents for purchasing
raw materials, stores, machinery and equipment and also for
marketing the produce and to manage the entire affairs of business.

During those days, the pioneering managing agents were Messrs

Andrew Yule & Co., Martin Burns, Bird & Co., Williamson Major
and Duncan Brothers. These European Managing Agents were
actually the pioneers of modern Indian industries.

But these Managing Agents showed their exploitative character by

charging commission on all of its agency activities related to
purchase and sale activities of the company, by charging heavy
officer allowances for management of the company and by sharing
the profits of the company.

In the later part various malpractices were developed in this

managing agency system. In this regard, Dr. P.S. Loknathan
observed, “Finance, instead of being the servant of
industry, has become its master.” Guided by its exploitative
attitude, the whole system gradually became degenerated and
inefficient.
(iv) Exploitation through Payments for the Cost of Administration:
The fourth form of colonial exploitation by the British was in the
form of payments for the cost of British administration.
Accordingly, British employed a large number of British officers
both for maintaining its military and civil administration of the
country. These British officers were paid higher salaries and
allowances as compared to their Indian counterpart.

The British officers were given immense administrative powers for

awarding contracts for supplies and stores and in return they
collected commissions from the contractors. These officers were
given pensions after a specified period of service. All these resulted
a huge remittance in the form of savings, pensions and other
benefits known as family remittances, causing huge drain on India’s
resources.

Moreover, a huge amount was also paid as interest on sterling loan

taken for the construction of railway telegraph line and irrigation
works. All these payments, known as House Charges, had resulted a
huge drain of our resources which was to the extent of Rs 43 crore
in 1931.

Moreover, India was also forced to meet the cost of various wars
faced by East India Company such as Mysore and Maratha Wars,
Afghan and Burmese Wars. During the World War I and II, India
attained positive balance of trade by exporting more and importing
less.

To fulfill its formality, Britain simply authorised the Government of

India to issue more currency on the security of Sterling Balance held
in England and thereby simply exported inflation to India resulting
huge burden on Indian people.

Consequences of Colonial Exploitation:

Various forms of colonial exploitation ultimately resulted
the following consequences on Indian Economy:
1. The first important consequence of colonial exploitation was that
India remained primarily an agricultural country with a scope for
commercialisation of agriculture so as to serve the interests of Great
Britain.

2. Although India was an industrially advanced country during the

16th and 17th century but the British policy never permitted those
industries to modernise its structure during the 18th and 19th
century. This led to destruction of Indian handicrafts and
transformed the country into an importer of manufactured goods
from Britain.

3. The British developed some forms of economic infrastructure

such as electricity work, railways and irrigation with the objective of
promoting foreign trade and also for exploiting natural resources of
India to their own advantage. No direct British investment was
made for the development of heavy and basic industries rather all
investments were made in plantation and consumer goods
industries.

4. The British followed the policy of discriminating protection and

imperial preference so as to maintain complete control over the
Indian market and also to provide secure avenues for British
investors in India.

5. The British developed Managing Agency System for promoting

consumer goods industries which had its exploitative nature in
appropriating 50 per cent of the gross profits as managerial
remuneration.

6. The industrial Revolution in England created a serious impact on

Indian economy as it reversed the character and composition of
India’s foreign trade. This led to destruction of Indian handicrafts,
increasing competition of British machine made goods and
increasing demand for Western commodities as a result of foreign
influence.

7. The new land system in the form of Zamindari and Ryotwari

system introduced by the British created a class of absentee
landlords making way for exploitation of the peasants and
concentration of economic power in the hands of the few. This had
resulted total depression in agriculture and industry.

8. The colonial exploitation through the entry of British capital and

finance capital and through the payment for the costs of
administration via Home charges and for meeting the costs of War
led to a huge economic drain of India weakening the base of Indian
economy.

Thus the British rule in India was a long history of systematic

exploitation of Indian people by the imperialistic Government
which led to stagnation and poverty of Indian economy.

Periods of British Colonialism and the Exploitation in India:

The British rule in India can be broadly divided in two parts, i.e.,
firstly the rule of East India Company covering the period from 1757
to 1858 and secondly, the rule of British Government India from
1858 to 1947. During those days, British established the colonial
rule in India. The colonial rule indicates a peculiar socio-political
relationship between the people of the country and the foreign
rulers.

Colonial rule starts its operation in the country when the foreign
ruler frames the political and economic policies of a country in the
interest of the ruler country. Colonial economy is normally
organised in such a manner so that it can help the ruler country in
the expansion and development of its economy.

In a colonial country, people cannot take any independent economic

and socio-political decision of their own for attaining development
of their economy.
Foreign colonial rulers are used to exploit and loot the different
sectors and resources of the colonial economy and gradually
establish market for their own industrial products. This leads to
destruction of its cottage and small scale industries. In this way, the
colonial economy gradually enters into the vicious circle of poverty.

Just after the battle of Palassey in 1757, the British East India
Company ultimately managed to conquer most of the states of India
and that was the start of colonial exploitation in India. During this
period of colonial rule, the Company looted almost all valuable
wealth and riches of India and then sent it to England. This move of
the company had forced the country towards vicious circle of
poverty and disaster.

This motive of looting and exploitation could not find any change
even when the Indian administration was transferred from the
hands of British East India Company to British Empire. By adopting
its colonial system, British exploited the Indian economy in
different manners during their long two hundred years of rule.

This period of two hundred years of exploitation during British rule

had been classified by the economic historians into three different
parts.

These were:
(a) The period of Mercantile Capital,

(b) The period of industrial capital and

(c) The period of Finance Capital.

(a) The Period of Mercantile Capital:

The period covering just from the start of battle of Palassey in 1757
to the end of eighteenth century, is considered as the period of
Mercantile Capital. Thus, in 1757, the East India Company finally
managed to conquer the political power in India. During those days,
feudal type of economy was existing in India.

During this period, British Mercantalists started to obstruct the

growth of Indian economy with their vested interests. They also
exploited a huge amount of profit through trade and also by
charging a higher rate of land revenue from the agriculturists by
adopting a new land revenue system.

This new land revenue system had led to disintegration of the

village community partly along-with untold exploitation of Indian
peasantry and then the country had to face famines frequently.

(b) The Period of Industrial Capital:

The period of Industrial Capital covers the entire nineteenth
century, i.e., from the beginning to its end. During this second
period, the industrial revolution in Britain had gathered its
momentum through the utilisation of its mercantile capital and
then started to exploit the Indian economy in a different manner.

During those days, the main motive of the British regime was to
transform the Indian economy as a primary producing country,
concentrating on the production of raw materials and to create a
potential market in India for sale of their industrial finished goods.

Thus the strategy of free trade followed by the British had ruined
the age old Indian textile industry as this industry could not stand
in the competition with the machine made textiles produced by the
British.

Moreover, British capitalists gradually developed jute, tea and

coffee industry in India on geographical reasons and finally
exploited Indian labourers extensively. In this way British industrial
capital had accelerated the process of economic drain from India
along-with the degree of exploitation and then set imbalances in
Indian economy.

(c) The Period of Finance Capital:

This period had its start from the end of nineteenth century and
continued upto the year 1947, i.e., the year of achieving
independence in India. During this period of Finance capital British
investors started to invest a huge amount of their capital in India
which was actually looted earlier from India by the East India
Company.
During those days, British rulers gradually started to incur a huge
amount of expenditure for those different purposes which were not
at all related to the welfare of general masses in India. Later on,
they transformed all these expenditures into loan to the account of
India and thus gradually raised the burden of loan.

British rulers invited British capital for the growth of railways in

India and gradually repaid those loans by imposing taxes on the
Indian people. Moreover, British capital increased the demand for
British capital goods like iron and steel, machine and tools, coal etc.
for Indian railway.

As the plantation industries, viz., tea, coffee and rubber were very
much profitable in India British Capitalists had also invested a huge
amount of capital on these industries, more particularly on tea
industry. After that British capitalists also invested their capital on
some other industries such as petroleum, coal, tramways, bank,
sugar, textile, paper etc.

Thus with the sole intention to strengthen the British economy, the
British rulers showed considerable interest towards the
establishment of all these industries mentioned above.

Thus the British-rulers were not at all interested in the development

of Indian economy as such.

These economic transformations, which include, commercialisation

of agriculture, the development of different industries, the growth of
railways, the spread of irrigation facilities, the expansion of
education, the creation of revenue settlements etc. were all initiated
by the British with the sole motive, i.e., for accelerating the process
of drain from the Indian economy.

It would be better to deal with the causes and impacts of these

economic transformations in India during the colonial rule under
the British period.