Were the Brits a help or hinderence to the Indian Economy?
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(written by Augustyn Dugel)
Edmund Burke, a prominent figure of the 18th and 19th century claimed that British rule in India was a hinderence to their economy. He blamed Warren Hastings in particular.
Indian historian Rajat Kanta Ray (1998) agrees with Burke's point that British rule in the 18th century was a catastrophe for the Indian economy.
Ray believes that British depleted the food and money stocks and imposed high taxes that helped cause the terrible famine of 1770, which killed a third of the people of Bengal, a theory known as 'Economic Drain Theory'
However, P.J Marshall believes that the British maintained a stable economy in India during their rule. Marshall notes the British raised revenue through
local tax administrators and kept the old Mughal rates of taxation.
As well as this, in the late 19th century, the British invested in the production of railways in India which naturally would have helped
stimulate economic growth in the Indian economy.
Whilst Britian underwent an industrial revolution in the 19th century, Indian industry stagnated. However, the inustrial revolution in Britian caused huge economic despair through mass unemployment. Many people in this period were losing their jobs to be replaced by machinery and thus, along with a rapidly expanding population, unemployment soared.
It could therefore be argued that the Indian economy benefitted in the short run from avoiding an industrial revolution.
However, in the long run, the Indian economy did not benefit because, whilst other countries were industrialising, India remained under developed and began to lag behind in the trading world.