Economic History of India - PDF

## Economic History of India ### Chapter - 1.1: India during the Pre-colonial Phase #### Objectives At the end of this unit, you will be able to understand: - Pre-Colonial Scenario of Agriculture in India - Pre-Colonial Scenario of Industrialization in India - Pre-Colonial Scenario of Foreign Trad...

## Economic History of India ### Chapter - 1.1: India during the Pre-colonial Phase #### Objectives At the end of this unit, you will be able to understand: - Pre-Colonial Scenario of Agriculture in India - Pre-Colonial Scenario of Industrialization in India - Pre-Colonial Scenario of Foreign Trade in India - Pre-Colonial Scenario of Education and Employment in India - Pre-Colonial Scenario of Infrastructure in India #### Introduction One of the highly treasured diamonds in this world, "Kohinoor diamond", was carried away by Britishers when they left India forever. This unique diamond originally belonged to pre-colonial India. This is just one instance which was the reason for the miserable condition of India. Consequently, India was in a very bad shape when the Britishers left, but that paved the way for Indians to build and govern new policies for future. During pre-colonial phase, India had a self-sustaining and growing economy, due to which India was visibly known as the "Golden Bird". By that time, India was well-placed on the globe with a tremendous export transaction. Although pre-colonial India was primarily an agrarian economy, but several manufacturing activities were blooming. Indian craftsmanship was highly popular across the globe and was in huge demand. At that time, economy was prominent for its handicraft work, especially the cotton and silk cloth material, precious metallic and stone carvings, and many others. These unique developments attracted the British, which ultimately led to deterioration of pre-colonial India in order to derive their own benefits. Pre-colonial phase in India denotes the period of time before colonization of East India Company in 1757. The Pre-Colonial phase can be described under various areas such as agriculture, trade, education and employment, and infrastructure. #### 1.1.1 The Pre-Colonial Scenario of Agriculture in India During the Pre-colonial phase in India, primarily two crops were produced: rice and wheat. Even though only these two crops were produced, India was self-sustaining and highly sufficient. This state remained till British colonization forcibly changed the agricultural sector by increasing the commercialization. Before British colonization, a majority of Indians were dependent on agriculture for their livelihood. Despite the lack of agricultural techniques and irrigation methods in the villages, the agriculture was self-sufficient and autonomous. The villagers use to buy and consume the raw materials and articles directly from each other. Therefore, deprivation and famines were less likely. Even though agricultural practices were primeval, but the villages were self-reliant as well as self-sufficient. Whole of this was ruined by the Britishers when they invaded the Indian subcontinent. ### Chapter - 1.2: Reasons for Colonial Interest in India #### Objectives At the end of this unit, you will be able to understand: - Basic Features of Colonialism in India - Reasons for British for Colonial Interest in India #### Introduction Colonialism is a phenomenon of expansion of a territory, which is closely linked with the creation of the modern capitalist global system. Colonialism is a perplexing phenomenon of capitalist expansion. Colonialism means that foreign domination has happened whereby the colonized area or territory is put into the status of 'unequal trade'. The social and political orders are planned for benefit and betterment of the ruling nation. Hence, colonialism indicates a system of political and social relations between two nations, where one country is the ruler and the other country is its state. The economic and social advancement of a colonial nation is totally subjected to the ruling nation. Colonial economy is peeled off all free economic choices. The improvement of rural, usage of the nation's immense natural resources, its mechanical and tax policies, exchanging relations with foreign nations etc., are left under the control of the ruling nation. India was the biggest and most important ownership of Britain. England succeeded to rule over India for its own benefit for almost 200 years (from 1757 to 1947). Colonialism is a phenomenon of expansion of a territory, which is closely linked with the creation of the modern capitalist global system. #### 1.2.1 Basic Features of Colonialism in India When industrial revolution in England got energy, Great Britain was changed into a main country of the world. Then again, India was changed in a skilful path into a main in reverse colonial nation of the world. Obviously, these two processes are not autonomous of one another - at any rate as far as circumstances and logical results. In this association, it is to be brought up here that the colonial reconciliation with the world capitalist economy happened during the 19th century on the request of modernization, economic development, and transplantation of capitalism in India. In order to benefit the British Government, India was changed into a main market for British produced articles. India's industrialisation was conscientiously upset. India turned into a rich cause of gracefully of raw materials for Britain's ventures. However, India was made provider of everything without exception, mender, repairer of everything on earth, however producer of none. India turned into the strong just as the most profitable field for speculation of British capital. Colonial India had the four salient features, which are as follows: - There was a linkage between the British economy and Indian society which influenced the world capitalism or the world market. - India triggered the British enterprises by supplying them with raw materials. Due to the 'unequal trade policy', India was slowly reduced to the status of a subordinate trading partner of Britain during late 18th and early 19th centuries. - As there was a big gap between riches and poor people in India, there were no internal savings with the people. This led to the depletion of riches or one-way movement of surplus to the metropolis via solitary exports. - India was managed and administered by Britain, where all the policies were made for betterment of Britain and not India. This ruined the Indian economy. #### 1.2.2 Reasons for British for Colonial Interest in India British ruling class had more of economic interests for colonial rule in India. These colonizers snatched every good resource of India, and even every drop of flesh and blood of Indians for their selfish motives. There were many reasons for British for colonial interest in India. - **Monopolistic Trading:** The Britishers desired to gain a monopolistic trading level in India, which was the main reason for their colonization. Hence, British capitalists did investment in India, and also sold banking and shipping services, in order to continuously enjoy the monopolistic advantages. - **Employment:** British upper middle class got attracted towards interesting and lucrative employment in India. The employment in India provided excellent disbursement, which they used to send home. - **Decentralization of Industries:** On their arrival in India, the Britishers were looking to immobilize out the flourishing industrial phase. With this goal, they targeted various industries in India. To make it effective, they prepared a robust plan to decentralize these prosperous industries. This de-centralization lead to two things. - Indian export volume was suppressed by directing raw materials to Britain. This converted india from a recognized exporter of manufactured handicraft items to just a small exporter of raw materials. - Britishers ensured that there was a low level of local supply to meet Indian requirements for finished articles. Hence, India was pressurized to depend upon British to meet its demands. - **Diversion of Foreign Trade:** The Britishers had the objective of diverting the bulk of foreign trade in order to serve their interests. They facilitated the culmination of foreign trade of India with other countries by subjecting constrained policies on manufacturing and trading. Most of the foreign trade was confined to Britain. The opening of Suez Canal aggravated the domination of British over India's foreign trade. ### Chapter - 1.3: Expansion of British Empire in India #### Objectives At the end of this unit, you will be able to understand: - Expansion of British Rule in India under Governor Generals - Subsidiary Alliance System or Subsidiary Treaty - War as a Tool of Expansion of the British in India - Doctrine of Lapse #### Introduction During early 18th century, the prosperity of the then robust Mughal Empire began to downturn, as numerous successor states, regional powers, and country powers emerged in various regions of India. The two European trading companies after understanding the demerits of the existing nation powers thought of making themselves as solid political power in order to extend their rule in India. It is the exchange interest that made the two European companies graph this cycle of regional expansion. The European trading companies built up their factories on the western, eastern and southern coastal zones and in this cycle, they expanded their impact into the terrain regions of the Indian subcontinent. #### 1.3.1 Expansion of British Rule in India under Governor Generals The expansion and union of the British impact was accomplished in a range of 100 years, i.e., 1757 to 1857 by utilizing the tools of war and diplomacy. This expansion happened during tenure of many Governor Generals. The Governor-General-ship of Lord Wellesley (1798-1805): The Governor-General Lord Weliesiey came to India for the first time in 1798, when the Britishers were engaged in a deadly conflict with France. His arrival turned out to be a large-scale expansion of British rule in India. Lord Wellesley decided to bring most of the Indian states under British control. He followed three methods to achieve his objectives: - Subsidiary Alliance System or Subsidiary Treaty - War - Capturing of the states of subordinated rulers **Subsidiary Alliance System or Subsidiary Treaty:** Wellesley used Subsidiary Alliance system, in which the ruler of the allying state of India was pressurized to accept the permanent reside of a British force within its area and to pay an allowance for its maintenance. This was followed purportedly for the protection of the allying state, but was, actually, a way by which the Indian king paid gratitude to the Company. At times the king granted a portion of his territory instead of giving annual subsidy. **Subsidiary Alliance system is the practice of subordinating the states of India to the supreme authority of the East India Company.** **Rules followed for Subsidiary Treaty:** - The Indian ruler was forced to permit the involvement of a British Resident in his court. He was not allowed to hire anyone in his court without the go-ahead of the British. He would also not confer with any other Indian king without taking permission from the Governor-General. - The Britishers would be responsible for defending the ruler from Indian ruler's enemies. - The British would not interfere in the internal matters of the allied states. **Subsidiary Alliance did not benefit Indian rulers due to following reasons:** - Even though the British denied any interference in the internal matters of the allied state, but they always intervened. In fact, signing a Subsidiary Alliance by an Indian ruler means they lost the freedom. - The Indian ruler lost the right of self-defense and of making diplomatic relations. - The finances of the subsidiary alliance given by the British were very high, which was out of capacity for the ruler. - The armies of the secured states dispersed, and many soldiers and army officers lost their jobs, which spreaded agony and degeneration in the country. - The people were neglected by the rulers because they were not afraid of them and they did not want to be in good books of the people, as they were totally safeguarded by the Governor-General from internal and external enemies. **Advantages of the Subsidiary Alliance to the British:** - The British maintained a big army due to the forced support by the Indian rulers. This helped them in big way to won the wars even though they were very far from their home country. - The British took over the control of the defense and foreign relations of the protected states. They had the power to choose and capture the Indian rulers' territories by declaring him to be 'incompetent', and even throwing him out. During 1798 and 1800, LLord Weilesley signed Subsidiary Treaties with the Nizam of Hyderabad. In place of currency for the subsidiary forces, the Nizam gave a portion of his regions to the British. In 1801, the Nawab of Awadh signed a Subsidiary Treaty, and gave almost half of his domain to the British, which included Rohilkhand and the region between the two rivers, Ganga and Jamuna. In 1792, Tipu of Mysore did not agree to a Subsidiary Treaty. In 1799, the British army annexed Tipu, before French could protect him. Tipu still denied to ask for peace on demeaning terms. This great hero died on 4 May 1799 while shielding his capital Seringapatam. In 1801, Nawab of Carnatic was forced to sign the Treaty and handover his kingdom to the Company, and he will be given a pension in place of that. By this time, the Marathas were the only big Indian power, which was not in control of the British. Wellesley starts focusing towards the Marathas and started his interference in their internal matters. The Maratha Empire encompassed five major chiefs: - Peshwas (at Poona) - Gaekwads (at Baroda) - Sindhias (at Gwalior) - Holkars (at Indore) - Bhonsles (at Nagpur) Wellesley kept on offering a Subsidiary Alliance to the Peshwa and Sindhia, but could not trap the well-balanced Nana Phadnis. In 1803, British army defeated the joint armies of Sindhia and Bhonsle at Assaye and Argaon. Lord Lake overpowered Sindhia's army at Laswari and captured Aligarh, Delhi and Agra. On the other hand, the policy of expansion through war was found to be very expensive and was diminishing profits of the Company. Britain's budget was getting drained. Hence, in 1806, Wellesley was called back from India. The East India Company improved their relations with Holkar by signing the treaty of Raighat, returning him the greater part of his kingdom. On one hand, Wellesley's policy of expansion came to an end, but at the same time, it made the East India Company the supreme power in India. **The Governor-General-ship of Lord Hastings (1813-1822):** - The Governor-General, Lord Hastings, constrained Sindhia to acknowledge British imperialism, and defeated the armies of the Peshwa, Bhonsle and Holkar. The Peshwa was dominated and were sent to Bithur near Kanpur. - After the ruin of the Marathas, they came up short on the energy to reassert their autonomy and promptly acknowledged British matchless quality. In this manner, by 1818, the whole Indian subcontinent aside from the Punjab and Sindh had been brought under British control. - Some portion of it was ruled legitimately by the British and the rest by a large group of Indian rulers over whom the British practiced principal power. - They paid vigorously for the British forces positioned in their territories to control them. They were self-governing in their internal affairs, however even in this regard they recognized British authority used through a Resident. They were on never-ending probation. #### 1.3.2 War as a Tool of Expansion of the British in India By 1772, the East India Company, came into India as a trading company. Later, it controlled the regions of Bengal, Bihar, Orissa, Madras and Bombay. After 1765 they needed to confront solid resistance from the Marathas, Haider Ali and Tipu Sultan of Mysore, and the Sikhs. The East India Company needed to oppress these powers so as to be principal in India. **The Conquest of Mysore:** Haider Ali was the ruler of Mysore. He was a capable administrator and an adroit diplomat. While the Carnatic was tormented by wars and Bengal was going through a time of political disturbance, Haider Ali consistently rose to power in Mysore. He stretched out his kingdom up to the Krishna River. **The First Mysore War (1769):** In 1769, Haider Ali defeated the British in the First Anglo-Mysore War and blockaded Madras. The English had to sign a treaty as indicated by which they vowed to come to Haider Ali's assistance in the event that he was attacked by another power in future. This treaty without a doubt raised the glory of Haider Ali. **The Second Mysore War (1780-1784):** In 1771, the Marathas attacked Haider Ali, however the English didn't help him notwithstanding their guarantee. Haider Ali hung tight for a chance to deliver retribution. At the point when the English attacked and involved the French port of Mahe, the main outlet for Mysore's exchange with Europe, Haider Ali proclaimed war on them. The Nizam and the Marathas began as partners of Haider Aii yet later on headed toward The English side. However, Haider Ali moved through the Carnatic, caught Arcot and undermined Madras. In any case, the British armed force defeated Haider Ali at Porto Navo and spared Madras. After Haider Ali's death in 1782, the war was continued by his son, Tipu Sultan. The war reached a conclusion by the Treaty of Mangalore (1784). The detainees of war and the vanquished territories were commonly returned. **The Third Mysore War (1790-1792):** The Mangalore Treaty had not settled the contention among Tipu and the British. Since both the English and Tipu Sultan were focusing on political matchless quality over the Deccan, a restoration of threats between the two was inescapable. Tipu attacked Travancore, a partner of the English and the main wellspring of pepper for the East India Company. The Nizam and the Marathas joined the British. In 1792. Lord Cornwallis defeated Tipu and pressurized him to sign the Treaty of Siringapatnam. **According to the Treaty of Siringapatnam:** - Tipu had to give away half of his kingdom which was divided among the British and their allies (the Maratha and the Nizam). - Tipu had to pay a hefty war compensation of 330 lakhs of rupees. Along with this restitution, Tipu had to hand over two of his sons to the British as prisoners. **Fourth Anglo-Mysore War (1799):** Lord Wellesley facilitated the prevention of French reemergence into India. He asked that Tipu Sultan go into a subsidiary alliance tolerating British sovereignty. On Tipu's refusal, the Fourth Anglo-Mysore War began (1799). The Nizam joined the British. Tipu died bravely fighting the war. Half of Tipu's kingdom was divided between ### Chapter - 1.4: Expansion of East India Company Under Major Governor Generals #### Objectives At the end of this unit, you will be able to understand: - Expansion Process - The Governors-General during the Company period #### Introduction In 1588, after leading to naval defeat on the Spanish Armeda, the British obtained naval supremacy. This supported certain vendor globe-trotters of London to shape a company for trade in the East. They framed the East India Company and got a confirmation from Queen Elizabeth I of England on 31 December 1600. During the early period of its presence, the East India Company embraced 'separate journeys' and disseminated the benefits from each journey among the supporters. **East India Company refers to an English company created for the misuse of trade with East and Southeast Asia and India, confirmed by an authority on December 31, 1600.** #### 1.4.1 Expansion Process In India, the main effort for standard trade was made in 1608 when the Company started a factory at Surat. The British Captain Hawkins tried to get permission from the Mughal emperor Jahangir to build up a factory at Surat, yet the efforts were thwarted because of the antagonism of the Portuguese. - 1611: The English set up their first factory on the East coast at Masulipatam in 1611. - 1612: Two English vessels arrived at Surat to destroy the Portuguese fleet. - 1613: The English tried to lake permission from Jahangir to build up their first factory at Surat. - 1615: Thomas Roe, a British, secured from the Mughal emperor certain benefits remembering the right to raise industrial facilities for specific pieces of the domain. By uprightness of this concession the English set up industrial facilities at Surat. These industrial facilities were set under the management of the President and the Council of Surat factory. - 1628: The English set up one more factory at Armagoan, barely any miles from the Dutch settlement of Pulicat. - 1633: The English opened a factory at Hariharpur, trailed by the one at Balasore. - 1639: The English captured Madras from the Raja of Chandragiri, along with the Fort St. George. This was converted into the headquarters of the company's arrangement on the Coromandel coast. - 1651: The English opened a factory at Hooghly followed by production lines at Patna and Kasimbazar. - 1668: Charles moved Bombay to the English East India Company on a yearly rent of £\10. In course of time Bombay turned into a prospering commercial city and supplanted in significance even Surat. - 1690: The Company secured the city of Calcutta from the Nawab of Bengal against the instalment of Rs. 1,200 every year. - 1715: The English secured from the Mughal emperor Farrukhsiya a Farman, giving the company the benefit of trading in Bengal liberated from all obligations on a yearly instalment of Rs. 3,000. During the initial years the Company followed the policy of quiet trade, pushed by Sir Thomas Roe. It kept away from all endeavors for increasing territorial belongings, since it felt that it could demonstrate ruinous to the English interests in India. However, towards the late 18th century, an amendment was done in the policy of the English. Exploiting the descending pattern in the peace circumstance in the nation, they started engaging political aspirations and continuously received the policy of territorial securing. Considering the expanding problem in the nation the Company was obliged to make essential game plans for its own protection. The Company was likewise allowed to rent an extra area around Calcutta, and to hold its benefit of trading in the territory of Hyderabad liberated from obligation. The Company was excluded from all traditions and different obligations at Surat as a byproduct of the installment of a yearly total of Rs. 10,000. The Company was allowed to mint its own coins, which were to have money in the Mughal domain also. This Farman is regularly portrayed as the Magna Carta of the Company. Inside not many long periods of the issue of the Farman of 1716-17 the English fortified the city of Bombay as a proportion of guard against the assaults of the Marathas and the Portuguese. The company expanded the quantity of its outfitted ships and went into a partnership with the Peshwa to overcome the Angrias, who had ruled the Western coast from Bombay to Goa. The Company caught Suvamdurg, a fortification of the Angrias in 1755 and their capital Gheria in 1757. #### 1.4.2 The Governors-General during the Company period **Warren Hastings** (6 December 1732 - 22 August 1818): Warren Hastings was appointed as the first Governor of the Presidency of Fort William (Bengal) during 1772 to 1785. Along with Robert Clive, Hastings established the framework of the British in India. Hastings was a dynamic coordinator. From 1779 to 1784, he drove the powers of the Company against a solid alliance of local regions. In 1787, he was alleged for using unfair means and reprimanded. He was relieved in 1795. **Charles Cornwallis** (31 December 1738 - 5 October 1805): He was one of the main British generals during the American War of Independence. He instituted various huge changes for the East India Company and its domains, such as the Cornwallis Code. A part of this executed significant land taxation changes referred to as the Permanent Settlement. From 1789 to 1792, Cornwallis took charge of British and Company forces to dominate the ruler of Mysore, Tipu Sultan. **John Shore** (5) October 1751 - 14 February 1834): John Shore, a British official of the East India Company, was appointed as Governor-General of Bengal from 1793 to 1798. **Richard Colley Wellesley** (20 June 1760 - 26 September 1842): Wellesley was appointed as Governor-General of India during 1798 and 1805. He was later appointed as Foreign Secretary in the British Cabinet and as Lord Lieutenant of Ireland. In 1799, he attacked Mysore and vanquished Tipu Sultan after a colossal fight. **Sir George Hilaro Barlow** (20 January 1763 18 December 1846): He was appointed as Governor-General of India after the death of Lord Cornwallis (1805) and until the coming of Lord Minto (1807). He was supported by Lord Minto but British were not satisfied with him. **Sir Gilbert Elliott** (23 April 1751 – 21 June 1814): He became Governor-General of India somewhere in the range of 1807 and 1813. He represented until 1813, during which he extended the British presence in the zone to the Moluccas, Java, and other Dutch belongings in the East Indies during the Napoleonic Wars. ### Chapter - 1.5: Commercial and Trade Policies of the English East India Company #### Objectives At the end of this unit, you will be able to understand: - Timelines for the Major Events during the Arrival of East India Company - Growth of Central and Provincial Structure Under the East India Company - Trade Monopoly #### Introduction In 1588, the British gained naval incomparability in the wake of delivering a naval destruction on the Spanish Armeda, which energized some trader globe-trotters of London to shape a company for trade in the Eastern region. On 31 December 1600, they created the East India Company and got a charter from Queen Elizabeth I (England). The Company was a very tricky and strategic enterprise or monopoly. #### 1.5.1 Timelines for the Major Events during the Arrival of East India Company | Year | Event | |---|---| | 1608 | The British Captain Hawkins attempted to get consent from the Mughal ruler Jahangir to build up a plant at Surat, however the endeavors were thwarted because of the antagonism of the Portuguese. This was the primary exertion the Company made for standard trade with India. | | 1611 | The British had laid foundation of their first factory on the East coast at Masulipatam. | | 1612 | Two British vessels reached Surat and defeated the Portuguese fleet. | | 1613 | Jahangir gave permission to the British to establish factory at Surat. | | 1615 | The British prevailing through the good offices of Thomas Roe in making sure about from the Mughal sovereign certain benefits remembering the option to raise factories for specific parts. | | 1633 | The English started a factory at Hariharpur, followed by another one at Balasore. | | 1639 | The English made sure about the site of the current city of Madras from the Raja of Chandragiri and manufactured the sustained factory called Fort St. George. This at last turned into the central command of the company's settlements on the Coromandel coast. | | 1651 | The British started a factory at Hooghly, and then at Patna and Kasimbazar. | - 1668: Charles transferred Bombay (now known as Mumbai) to the Company on a rent of £\10 per annum. After sometime Bombay became a blooming commercial city. - 1687: Sir Josiah Child, the President of the Company endorsed of an adjustment in Company's strategy. Inferable from this adjustment in the approach of the Company, its exercises began getting political flavor, alongside development of its trade interests. - 1690: The Company was able to take away Calcutta city from the Nawab of Bengal against the payment of Rs. 1,200 per annum. - 1715: The English took away from the Mughal emperor Farrukhsiya a Farman, granting the company the right of trading in Bengal with no duties, but an yearly payment of Rs. 3,000. - 1716-17: The Company was allowed to produce its own coins, which were used as currency in the Mughal empire also. This is usually known as the Magna Carta of the Company. - 1755-57: The company expanded the quantity of its equipped ships and went into a collusion with the Peshwa to vanquish the Angrias, who had overwhelmed the Western coast from Bombay to Goa. The Company caught Suvamdurg, a fortification of the Angrias in 1755 and their capital Gheria in 1757. #### 1.5.2 Growth of Central and Provincial Structure Under the East India Company **Regulating Act of 1773:** - The Act gave that the Court of Director heretofore elected each year, was henceforth to be elected for a very long time. The number of Directors was fixed at 24, one-fourth resigning each year. - In Bengal a university government was made comprising of a Governor-General having a making choice when there was an equivalent division of assessment. The principal Governor-general (Warren Hastings) and councilors (Philip Francis, Clavering, Monson and Barwell) were named in the Act. - The Act engaged the Crown to set up by charter, comprising of a Chief Justice and three judges which was given both unique and investigative ward. In 1774, Sir Elijah Impey was appointed as Chief Justice after its establishment. **Pitt's India Act, 1784:** - The Pitt's India Act (1784) presented changes mostly in the Company's Government in London. While the support of the organization was left immaculate, all civil, military and revenue affairs were to be controlled by the Board of Control comprising of 6 individuals. - In India, the chief government was set in the possession of Governor-General and gathering of three. - Just covenanted workers were in future to be designated individuals from the Council of the Governor-General. **The Charter Act of 1793:** - In 1793, the Company's business benefits were stretched out for an additional twenty years. - The power which had been exceptionally given to Cornwallis on his appointment to abrogate his Council was stretched out to all future Governor-Generals and Governors. **The Charter Act of 1813:** - By this Act, the organization was denied of its monopoly of trade with India however it actually making the most of its monopoly of trade with China and the trade in tea. - The Act proceeded to the Company for a further time of twenty years the ownership of the regions and revenues. - It contained a clause accommodating an aggregate of one lakh of rupees yearly for the spread of education. **The Charter Act of 1833:** - This Act completed the introduction of free trade in India by annulling the organization's monopoly of trade in tea and trade with China. - All limitations on European migration into India and procurement by them of land and property in India were taken out. - The Act unified the administration of india. The Governor-General of Bengal turned into the Governor-General of India (William Bentinck was the main Governor-General of India). - The Act additionally achieved legislative centralisation. The Governments of Madras and Bombay were definitely denied of their powers of legislation. - The Act amplified the Executive Council of the Governor General by the expansion, of the fourth member (Law member) for legislative purposes. Macaulay was the primary law member. **The Charter Act of 1853:** - The Act reestablished the powers of the organization and permitted it to hold ownership of Indian regions 'in trust for her highness', not for any predetermined period but rather just "until Parliament should in any case give." #### 1.5.3 Trade Monopoly In 1694, a liberating act was passed, which permitted any English firm to trade with India, except if explicitly precluded by act of parliament, consequently abrogating the charter that had been in power for right around 100 years. When the East India Company Act was passed in 1697, another "parallel" East India Company was drifted under a state-sponsored amount of £2 million. The powerful stockholders of the old company immediately bought in a total of £315,000 in the new concern, and overwhelmed the new body. In 1708, the companies got converged, following a three-faced set-up which consisted of the two companies and the state, with the charter and understanding for the new United Company of Merchants of England Trading toward the East Indies being supported by Sidney Godolphin, first Earl of Godolphin. The merged companies turned into the United Company of Merchants of England Trading toward the East Indies. In 1757, the Law Officers of the Crown showcased the Pratt-Yorke feeling identifying onshore regions obtained by right of triumph from those recovered by private parties. ### Chapter - 1.6: British Economic Policies and the Revolt of 1857 #### Objectives At the end of this unit, you will be able to understand: - Economic Impact of the British Rule in India - Economic Policies in India During British Rule - The Revolt of 1857 or The First War of Independence #### Introduction Prior India was known as sink of gold and silver. It was independent in agricultural and handicrafts products and had consistent market of finished products abroad. However, with the happening to British principle, Indian economy was changed into colonial economy that fit the interests of British, not the nearby populace. English monetary setups imposed monopoly over India's big market and raw materials. India served as both a critical provider of crude products to British companies and a huge hostage market for British manufactured merchandise. Indian Mutiny, likewise called Sepoy Mutiny or First War of Independence, broad however ineffective rebellion contrary to British standard in India in 1857-59. This war started in Meerut by Indian soldiers, and later influenced Delhi, Agra, Kanpur, and Lucknow. #### 1.6.1 Economic Impact of the British Rule in India The British invasion and their dominance had a major impact on economic and financial condition of India. Some of the important impacts are mentioned herewith. 1. **Disturbance of the Traditional Economy** - The economic approaches followed by the British prompted the fast change of India's economy into a colonial economy whose nature and structure were controlled by the necessities of the British economy. - The British victors completely upset the traditional structure of the Indian economy. They never attempted to turn into a necessary piece of Indian life. - They generally remained outsiders in the land, abusing Indian resources and diverting India's wealth as tribute. 2. **Ruin of Artisans and Craftsmen** - There was an abrupt and brisk breakdown of the urban handicrafts industry which had for quite a long time made India's name an apothegm in the business sectors of the whole humanized world. - The British rule likewise upset the parity of economic life in the villages. The progressive pulverization of rustic specialties separated the relationship among agriculture and homegrown industry in the open country and thus added to the decimation of the independent provincial economy. Thus, British success prompted the de-industrialization of the nation and expanded reliance of the individuals on agriculture. 3. **Impoverishment of the Peasantry** - The peasants were adversely ruined under British rule. In the Permanently as well as the Temporarily Settled Zamindari regions, the part of the peasants stayed unenviable. They were left to the benevolent actions of the zamindars who raised rents as far as possible, constrained them to take care of illicit obligations and to perform constrained work. **Reasons for the growth of poverty** - **Heavy assessment of land:** No relative increment in land revenue was made, as the heartbreaking outcomes of requesting extortionate revenue got self-evident. - **Minor economic return:** The agrarian economy had been demolished and the landlords, moneylenders and dealers had made profound inroads into the village. The evil of high revenue request was exacerbated on the grounds that the peasant got minimal economic return for his work. - **Rigid manner of revenue collection:** Land revenue must be paid quickly on the fixed dates regardless of whether the reap is average or had flopped totally. At whatever point the peasant neglected to pay land revenue, the administration set up his land marked down to gather the unfulfilled obligations of revenue. - **Pressure of taxation:** The pressure of taxation and developing poverty drove the cultivators into obligation, which thusly expanded their poverty. - **Increasing commercialization:** The developing commercialization of agriculture likewise helped the moneylender-cum-dealer to misuse the cultivator. Poor people peasant had to sell his produce soon after the gather and at whatever value he could get as he needed to fulfil in time the needs of the legislature, the landlord and the moneylender. 4. **Crushing of Old Zamindars and Rise of New Landlordism** - The initial scarcely any times of British rule saw the destruction of the vast majority of the old zamindars in Bengal and Madras. This was especially so with Warren