British Ruler’s Economic Policy and Its Impact in India

The British influence on the Indian economy was beginning to be reflected naturally after the death of the Mughal ruler Aurangzeb. The generous concessions given by the Mughal rulers to the then Europeans damaged the interests of the indigenous merchants. At the same time, the trade and commercial system also weakened. In such a situation it was only natural to have a negative impact on the domestic economy here.

The British established their authority over the prosperity of Bengal after the wars of Plassey (1757 AD) and Buxar (1764 AD). As a result, the Indian economy changed from a surplus and self-reliant economy to a colonial economy. After the Battle of Plassey, the British participation in the inland trade of Bengal increased. The employees of the company also took possession of the prohibited trade items such as salt, betel nut, and tobacco. Before the Bengal conquest, the British government made various efforts to protect its textile industry. Among these, a ban in England on the use of colored and printed garments coming from India is prominent. The main objective of the British government to convert the Indian economy into the British colonial economy was to get good and cheap goods for its industry and to sell its products at high prices in the Indian market.

Different Stages of British Colonialism in India

Colonialism is a structure through which economic exploitation and oppression of any country takes place. Many types of ideas, personalities and policies can be incorporated under this structure. This is actually the deciding element of colonial policy. The basic element of colonialism lies in ‘economic exploitation’, but it also has its own importance in terms of maintaining political possession over a colony.
Karl Makers’s three-step theory of British colonialism and economic exploitation in India is based on:

  1. Commercial phase: 1757 AD to 1813 AD
  2. Industrial Free Trade: 1813 AD to 1860 AD.
  3. Financial capitalism: the stage after 1860 AD

First Phase of Colonialism: Commercial Phase, 1757 – 1813 AD (First Stage of Colonialism: Commercial Phase, 1757-1813).

England (East India Company) had gained dominance over Bengal after the Battle of Plassey. From this time British colonialism is considered to be established in India i.e. from 1757 AD to the early 18th century when the Mughal collapse. Here the imperialist mindset of the British East India Company was beginning to be clearly reflected. In the first phase of colonialism, the British focus was on ‘economic plunder’. The company wanted to dominate India with trade so that it could compete with it. There was no other British or European merchant or trading company. To keep the other nations of Europe away from India, the company had to fight fierce battles with the French and Dutch.

Initially, the sea areas of Bombay, Calcutta, and Madras There was control, the company started imposing local taxes on the people there and tried to increase its treasury. Soon this company was fulfilled and after the Battle of Plassey, Bengal, Bihar and some parts of South India became part of the company. Came as a result. The company had complete control over the government income. This control proved to be highly effective in usurping the accumulated capital of the zamindars, nawabs, and local rulers.

Second Phase of Colonialism: Industrial Free Trade (1813 – 60 AD) (Second Stage of Colonialism: Industrial Free Trade -1813-60)

The monopoly of the company was ended by India’s trade from 1813 and from this came a new form of exploitation of India by industrial capitalism. This is the reason that the year 1813 is considered important in the history of imperialist exploitation of India. After the Industrial Revolution in Britain, many problems arose.

The main problem was to find a market for goods made in factories. UK clothes manufactured at a cheaper cost began to be sent to Indian markets. These clothes were made in the mill, so handmade Indian clothes were cheaper than them. As a result, Indian clothes could not stand ahead of the cheaper prices of English clothes. As a result, Indian textiles reached the industry very hard.

Colonialism had its own importance in terms of providing raw materials to Britain as per the requirement. Its goal was to develop India as a subordinate market of Britain so that it could be easily exploited. To make India compatible with industrial capitalism, destroying local craft industries and transforming it into an agricultural country was part of a well thought out strategy of the British.

Third Phase of Colonialism: Financial Capitalism (After 1860 AD) (Third Stage of Colonialism: Financial Capitalism – After 1860)

Due to industrial development and exploitation of colonial markets, large capital accumulated in Britain. The increasing wealth of the industries led to the mobilization of the working class. Further industrialization in England meant an increase in the labor of workers and adversely affecting the profits of the capitalists as it was at the same time that Makers and Angeles ‘The Communist Manifesto’ was published in the English language. Therefore, it was considered appropriate to invest capital in India. This situation is considered as the beginning of the third phase of capitalism.

To fulfill their commercial and administrative requirements, the British Government considered it necessary to develop railway lines. Lord Dalhousie made the first attempt in India towards railway construction in 1846 AD.

The first railway lines were laid between Bombay and Thane in 1853 AD. By the way, the maximum expansion of railway lines in India happened during the time of Lord Curzon. Karl Makers called the railways ‘pioneers of the modern era’ the British laid out in India for commercial and strategic purposes. In the field of railway construction, the appropriated capital reflects the feature of the finance system, which was called the guarantee system. The British did not invest capital in cotton mills and steel factories.

They did not want to compete with the industry of their country. After the construction of railways, whose development led to the most capital, they were plantations of tea, coffee, rubber, indigo, etc. To capture the huge market of India, the industrialists were familiar with the importance of setting up industry in India itself. Where the amount of loan was 7 crore pounds in 1857 AD, in 1939 AD it was increased to 88 crores 42 lakh pounds. India also had to pay interest and dividends on it.

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