Un-British Rule In India”. R C Dutt blamed
the British policies for, Indian economic ills
in his book‘Economic History of India’
Drain of wealth refers to a portion of
national product of India, which was not
available for consumption of itspeople.
Drain of wealth began in 1757 after Battle e>t
Plassey when the company’s servants
began to extort fortunesfrom Indian rulers,
zamindars, merchants and common people
and send home.
In 1765 the company acquired the Diwani
of Bengal & began purchase the Indian
goods out of therevenue of Bengal and
exported them. These purchases were
known as Company’s investment.
Duty free inland trade provided British
merchants a competitive edge over their
Constituents of the Drain
Costs of the Secretary of State’s India Office, East India Company’s military adventures,cost of suppressing the Mutiny of 1X57 and the compensation to the company’s share holders, pensions lothe British Indian officials and army officers, costs of army training, transport, equipments andcampaigns outside India and guaranteed interests on railways.
To England (a part of their salaries, incomes and savings) by English Civil servants,Military and railway
employee’s lawyers, doctors etc.
The phase of finance imperialism entered India with the introduction of railways .development of plantations, mines, banking and factories financed through British capital. Much of
the burden of the expanding railway network was met by the Indian taxpayer through the guaranteedinterest scheme.
Land Revenue Systems
Introduced in Bengal, Bihar, Orissa, and districts of
Benaras & Northern districts of Madras byLord
Cornwallis in 1793.
John Shore planned the Permanent Settlement.
It declared Zamindars as the owners of the land. Hence.
they’could keep l/l1th of the revenue collected to
themselves while the British got a Fixed share of 10/11
of the revenue collected. The Zamindars were free to fix
Assured of their ownership, many zamindars stayed in
towns’(absentee landlordism) and exploitedtheir
Introduced in Bombay, Madras and Assam. Munro
(Viceroy) and Charles Reed recommended it.
In this, a direct settlement was made between the
government and the ryot (cultivator).
The revenue was fixed for a period not exceeding 30 years,
on the basis of the quality of the soil and the nature of
thecrop. It was based on the scientific rent theory of
The position of the cultivator became more secure but the
rigid system of revenue collecton oftenforced him into
the clutches of the moneylender.
Besides, the government itself became a big zamindar and and retained the right toenhance revenue at will while the cultivator was left at the mercy of its officers.
Modified version of Zamindari settlement
introduced in the Ganga valley, NWFP. parts of
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