How the British Destroyed the Indian Economy
Illstration by Artist
In 1700, India had a 24.4 per cent share of the global economy. By the time India gained its independence, it had dropped to only 2.4 per cent. That was because India was governed solely for the profit of the EIC and later the British Crown, and everything else was subservient to this primary objective. While it is undeniable that certain aspects of British rule benefited India, such as the introduction of Western education, the establishment of Courts, and the creation of a robust and efficient administrative sector, it is also indisputable that the material condition of India had deteriorated considerably due to the British administration and the poverty of India was unparalleled to any civilised country at the time of independence.
An example of this is the deindustrialization of India. Before the British arrived, India was the world's largest textile manufacturer, with cotton textiles being its primary export. But it was not in the habit of the British to foster Indian industries. The cotton industry in Britain had begun to boom due to the Industrial Revolution, which increased total output while cutting manufacturing costs. Added to this were laws that imposed massive tariffs on Indian exports, effectively destroying the Indian manufacturing industry.
Another example is the methods used by British traders to gain unfair advantages. In India, just like in the rest of the world, inland charges were imposed on products transported by land. However, the EIC was granted a permit that exempted them from making these payments. This meant that the goods imported from Europe and those purchased in India to be exported to Europe were no longer subject to inland duties. But private British traders began exploiting this authorization, which was exclusively provided to the EIC. So while the British traders transported their goods from place to place duty-free, the goods of the local traders were subject to heavy taxation. As a result, the local traders were ruined, their livelihoods destroyed, and the British traders had a monopoly and made huge profits.
Since agriculture was a source of livelihood for a large percentage of the Indian population, the land tax has traditionally been a significant source of revenue for India's past rulers. But during British rule, there was a constant increase in the amount extracted from the farmers through taxes to finance their policies, war effort, and the administration of their territories. No attempt was made to safeguard the local population's interests and guard against excessive demands. It made any accumulation of wealth and improvement in the material condition of the people impossible and fixed no limits on the State-demand in the future.
All these culminated in the impoverishment of the Indian population and the destruction of native industries. Had India been an independent country, she would have indeed retaliated. However, the act of self-defence was not permitted to her, and the good of the Indian manufacturers remained unprotected.