Impacts of Colonialism in India

India (WP) was under British rule (WP) for almost two centuries, resulting in numerous and contradictory consequences of colonialism (Impact and evaluation of colonialism and colonization) (WP) in what was the third world country. Unlike other British colonies, India was built with voluntary recruited labour as opposed to slaves. The nature and phases of colonialism in India is necessary in understanding the consequences.

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Nature and Phases of Colonialism

The nature of colonization is best understood in terms of how it is put in effect. Colonisation went through phases, either in terms of the general tendency or the tendency combined with mechanism and instrumentalities, and was not a constant, but ever changing.

Bipan Chandra (WP) by using general tendency argues that colonialism went through three stages as a result of changes in the metropolitan economy, society and polity. The first stage he identifies as "monopoly trade and revenue appropriation”. Monopoly of trade with the colony, direct seizure of surpluses and absence of imported goods were major features of this stage. This stage had two periods. The first sixty years from 1757 to 1813 was a pure mercantile period and the next period was in 1813 when monopoly of the East India Company for trade with India was ended. The second stage is ‘exploitation through trade’ wherein the colony became the market for industrial goods and a supplier of raw materials. The third stage is the period of ‘Foreign investments and competition for colonies; during which surplus capital from the colonizer was exported into the colonies to fuel exploitation of raw material by establishing industry and taking away profits.

Amiya Bagchi using the tendency combined with mechanism and instrumentalities approach proposes two stages. The first stage was from 1757 to 1858 during First War of Independence. There were two phases to this stage, the first was a pure mercantile period (in which merchants were the dominant class controlling long distance trade) in which East India Company gained from a monopoly of trade. The second phase was in 1813 when this monopoly was ended and replaced by agency houses which governed external trade and internal wholesale exports. These new rulers and Indian middle class consumed European imported goods (such as clothes and weapons). This extensively lowered demand for goods made in the country. The period following was called ‘exploitation through free trade’. The second period was from 1858-1947 during the direct acquisition of power by the British parliament to the independence of the country. This period saw the peak of exploitation through free trade and the opening of India’s economy almost entirely to the influence of the world capitalist market. In the second decade of the 20th century emerged a new phase of exploitation the neo-colonial mode. In Britain capitalism was significantly saturated with capital for investment that exceeded the economy’s potential. Thus a move began to export capital to other countries, India being an important destination.

First Phase Consequences: Impoverishment of Peasantry

Colonialism ended the Indian agrarian economy leading to the impoverishment of peasantry. The British made drastic changes in the structure of the Mughal land revenue system. Shares of collected revenue was considerably increased which lead to severe famines. Prior the British take over, part of the profits collected was reinvested in the economy and the growth of local product; but this was almost non-existent after the takeover. A major change was that revenue was calculable on the total land entitled to cultivate rather than the land actually cultivated. Thus if a peasant was assigned to cultivate 50 acres and he cultivated only 10 the British would assess revenue on 50 acres regardless; which was opposite to what was being done before. This was detrimental to the peasants.

In Mughals era, difficulties faced by peasants were taken into account in rent collection. Thus it wasn’t always collected on time or in full. Failure to pay on time did not lead to loss of land. In the British era, land was auctioned in case of failure to pay in time or debt. In comparison to the old system this new system was inflexible. Peasants got the worst of this deal. More importance was emphasized on landowners and moneylenders and they were able to confiscate land of the peasants upon failure to pay rent. This wasn’t confined to this system only but was a common feature throughout India’s land system under the British administration.

Second Phase Consequences: De-industrialization effects

This stage of colonialism had a twofold impact on the Indian political economy, namely damaging and developmental.

The Damaging Role

Prior to the British arrival in India the industry was large and widely spread with secondary manufactures. These pre-capitalist manufactures were spread all over the country with mutually beneficial links between them agriculture and manufacturing.

However after the first half of the 19th century there was no growth of new industries in India in a process called de-industrialization. In the first decade of the 19th century one-way free trade was introduced (i.e. exports from Britain were exempt from custom duties in India). Cotton textiles for instance made a large portion of India’s exports. Within a few decades cotton textiles vanished from India’s export list. This was because the British discouraged manufacturing in India and pushed for extraction of raw materials. At the same time there were massive imports of cheap textiles from England thus demand for local produce declined. Britain had then become a top producer of cotton textiles in the world. Cotton goods produced in India had to pay a higher duty than those of Britain’s. This became the reality for other manufactures such as silk goods whereby the British forced the weaver under its control to give up weaving and replaced it with the production of raw silk as it was more profitable in Europe. Britain also monopolized the sale and manufacture of salt, opium, indigo etc. By the second half of the 19th century de-industrialization was complete. Its effect on agriculture was damaging. Workers tossed out of secondary manufactures were thrown into agriculture for direct sustenance. The land had to support so many more people that it did before. This exacerbated an already impoverished peasantry. Relations of peasants with landlords worsened as the number of landless agricultural labourers increased. This condensed into absolute reduction in workers’ wages in agricultural operations and secondly rent was increased (rack-renting became common) which facilitated easy eviction of the tenants as share-croppers. Poverty, not in a relative sense but of an absolute kind was wide-spread.

Under an Indian administration income from government service would have contributed to the local progress and not to foreigners. The diversion of upper-class income into the hands of foreigners hindered the development of local industry for it placed purchasing power into the hands of people with a preference for foreign goods, thus boosting imports. The amount of money that went to foreigners could have been used to raise income levels in India.

The Developmental Role

Beginning in the 19th century the British had set up a modern administrative apparatus and subsequently a judicial system and together with mercantile firms. Large number of Indians were needed to run it. To allow for this, by the 1830’s a complete shift to English both in administration and education was effected. Consequently a new class of Indians well versed in English emerged. They established a monopoly first over the jobs and then over professions like lawyers, doctors and engineers. The upper stratum of this was the new Indian elite. Their power extends to current times causing resentment among lowers castes like the Dalits and the Muslims.

Another significant form of development was railway constructions. By 1914, 34,000 miles of railways were constructed linking all major areas in India. Railways made mobility of goods and people across India easier and enormously contributed to trade and capital development. It brought about the integration of various local economic zones. On the other side, railways also contributed to a greater integration of Indian economy into the metropolitan one thus augmentating India’s economic exploitation. This was because of the route alignment and fare-structure. Apart from the trunk routes linking the main the cities to the capital, railroads primarily were aligned so as to link interiors to port cities from which finished goods were imported into India while raw materials were exported to Britain. Fares for goods were higher if transported between two interior places but much lower if the same were to move from interior to the port cities. This was to discourage internal trade an facilitate external trade with Britain. Such were develoments that freedom fighter Dadabhai Naoroji called ‘drain theory’.

Irrigation networks were another significant form of development. Construction of vast irrigation networks was took place, but confined to areas as neglection of traditional irrigation works like wells and village ponds occurred. The earlier traditional system was under the farmers control so they could regulate crop mixture and rotation of crops. Modern networks put the peasants at the mercy of landlords who controlled the government public works like canals. More power was given to landlords and moneylenders at the expense of the peasants. Investment in irrigation caused great disparities among various regions in India. Investment went into two or three areas with the higher production potential, like Punjab. These areas experienced significant productivity growth cultivated by more labour and capital investments. Irrigation also led to changes in the cropping pattern. It facilitated the growth of exportable food grains and commercial crops. These new export food grains marginalised the production of millets(a cereal requiring little water which was the staple food of the poor) and the pulses(the chief and only source of protein for the poor). By 1914, 25% of the total cropped area came under the cash crops. By 1880’s a fairly sizeable Indian capitalist class was emerging, mostly concentrated around port-towns; marking the early beginning of capitalism under Indian entrepreneurship. The British contributed to public health by establishing Western medicine and training, and also establishing quarantine procedures. Consequently deathrates fell.

Third Phase consequences: Industrialization and Imperialism

In the last decades of the 19th century, the nature of colonialism was transforming. There was intense competition among capitalist countries to export capital to and establish industries in colonies like India. According to liberal economist Hobson and revolutionary Lenin, capitalism had entered a new phase called Imperialism. India at the time had developed a number of industries such as the cotton textiles, steel and sugar. This was boosted after WWI. Indian capitalists who had accumulated large capital through trade started establishing industries of their own. They gained large concessions from Britain to start industries and also pushed it to modify the one-way free trade, with the aim of protecting the Indian industrialists. Britain was forced to grant protective tariff to protect them. Indian capitalist assets started to grow faster than those of the British. By WWII India had extensively achieved self-sufficiency. Much of what was imported from Britain was now being produced with the country itself; this pattern of industrialization has been referred to as ‘import-substitution industrialization’.

The colonial mode of development imposed serious disjunction as pointed out by Bagchi between industry and agriculture. Most areas that developed industry remained agriculturally backward whilst those that were agriculturally advanced like Punjab remained industrially backward. As a result agricultural areas became hinterlands for the industry. Areas that constituted of mainly Muslim populations developed no industry and remained hinterlands. Thus this contributed to Muslim separatism which as we know led to the partition of the country and the creation of Pakistan.

Upon gaining independence India was the most developed outside the advanced capitalist countries. It had the largest capitalist class well-versed in influencing politics as well as the largest and accomplished middle class. It also had the highest incidence of poverty both urban but especially rural seen through undernourishemnt, poor health, illiteracy and lack of shelter.

References

Bagchi, A. K (1982). Political Economy of Underdevelopment. Cambridge: Cambridge University Press.

Bagchi, A. K (2010). Colonialism and Indian economy. New York: Oxford University Press

Fieldhouse, D.K (1999) The West and the Third World: trade, colonialism, dependence, and development. UK: Wiley-Blackwell

Murthy, H.V.S (1990). Essays on Indian history and culture: felicitation volume in honour of Professor B. Sheik Ali. New Delhi: Mittal Publications