The legacy of the British Colonialism in India

The Colonial Legacy

The industrial revolution in Britain led to the rise of a powerful class of manufacturers that were from here on going to influence the British policies in a big way.

They urged the British government to do away with the monopoly of the company in trade with India and hence, finally succeeded in 1813 in abolishing it’s monopoly over trade with the Charter act of 1813.

This marked the beginning of a new phase in Britain’s economic relations with India, with government now following the policy of free trade or unrestricted entry of British goods into the Indian market. Thus, a stagnating per capita income, abysmal standards of living, stunted industrial development and low-productivity and semi-feudal agriculture marked the economic legacy of colonialism as it neared the end.


 Ruin of Artisans and Handicraftsmen:

  1. Cheap machine made goods flooded the Indian markets and the Indian goods found it more and more difficult to penetrate the European markets.
  2. The loss of traditional means of livelihood was not accompanied by a process of industrialisation. This happened at a time when artisans were already feeling the crunch due to loss of patronage by princes and nobility, who now developed western tastes.
  3. Earlier, Indian handloom had a big market in Europe. Indian textiles such as cotton, linen, silk and woolen goods already had markets in Asia and Africa. With the coming of industrialisation in England, the textile industry there made important headway.There was now a reverse of the direction of textile trade between Britain and India. There was a massive import of machine made clothes from English factories to Indian markets. .
  4.  The British succeeded in selling their goods at a cheap price as foreign goods were given free entry in India without paying any duty. On the other hand, Indian handicrafts were taxed heavily when they were sent out of the country. Besides, under the pressure of its industrialists, British government often imposed a protective tariff on Indian textiles. Therefore, within a few years, India from being an exporter of clothes became an exporter of raw cotton and an importer of British clothes.
  5. This reversal made a huge impact on the Indian handloom weaving industry leading to its virtual collapse. It also created unemployment for a large community of weavers. Many of them migrated to rural areas to work on their lands as agricultural laborers. This in turn put increased pressure on the rural economy and livelihood. This process of uneven competition faced by the Indian handloom industry was later dubbed by the Indian nationalist leaders as de-industrialisation.

Ruralisation of India and Overburdening of agriculture and impoverishment of peasantry: 

De-industrialisation led to decline of many cities and hence, ruralisation of India with many artisans returning back to villages and taking up agriculture.

The cultivator had neither the means nor any incentive to invest in agriculture. The zamindar had no roots in the villages, while the Government spent little on agricultural, technical or mass education. All this, together with fragmentation of land due to sub-infeudation, made it difficult to introduce modern technology which caused a perpetually low level of productivity.

The peasants already suffering under landlord-moneylender nexus, saw increased pressure on land with ruralisation and deindustrialisation. India became a net importer.

Commercialisation of Agriculture

  1. So far, agriculture was a way of life but now it began to be influenced by commercial considerations. Certain specialised crops began to be grown not for the purpose of consumption but for sale in national and international markets as raw material for industries.
  2. A major economic impact of the British policies in India was the introduction of a large number of commercial crops such as tea, coffee, indigo, opium, cotton, jute, sugarcane and oilseed.
  3. Different kinds of commercial crops were introduced with different intentions. Indian opium was used to balance the trade of Chinese tea with Britain in the latter’s favor. The market for opium was strictly controlled by British traders which did not leave much scope for Indian producers to reap profit.
  4. Indians were forced to produce indigo and sell it on the conditions dictated by the Britishers. Indigo was sent to England and used as a dyeing agent for cloth produced in British towns. Indigo was grown under a different system where all farmers were compelled to grow it on 3/20th part of their land. Unfortunately cultivation of Indigo left the land infertile for some years. This made the farmers reluctant to grow it.
  5. In the tea plantations ownership changed hands quite often. The workers on these plantations worked under a lot of hardships.

Development of industry and Lopsided industrial development

In the second half of 19th century modern machine based industries were set up in India. This period also saw a rush of foreign capital into India.

The industrial development was characterised by a lopsided pattern when core and heavy industries were ignored and some regions were favoured more than the others.

Modern industries did develop in India from the second half of the nineteenth century. But, both in terms of production and employment, the level of industrial development was stunted and paltry compared with that of the developed countries.

It did not compensate even for the handicraft industries it displaced. Industrial development was mainly confined to cotton, jute and tea in the nineteenth century and to sugar, cement and paper in the 1930s.

Development of transport and communication

 In the 1940s, India had 65,000 miles of paved roads and nearly 42,000 miles of railway track. Roads and railways unified the country and made rapid transit of goods and persons possible.

However, in the absence of a simultaneous industrial revolution, only a commercial revolution was produced which further colonialized the Indian economy.

Also, railway lines were laid primarily with a view to link India’s inland raw material-producing areas with the ports of export and to promote the spread of imported manufactures from the ports to the interior. The needs of Indian industries with regard to their markets and sources of raw materials were neglected as no steps were taken to encourage traffic between inland centres. The railway freight rates were also so fixed as to favour imports and exports and to discriminate against internal movement of goods.

Moreover, unlike in Britain and the United States, railways did not initiate steel and machine industries in India. Instead, it was the British steel and machine industries which were the beneficiaries of railway development in India.

Rise of Indian bourgeoisie

Indian traders, moneylenders and bankers amassed some wealth as junior partners of British capitalists in India. These further provided loans to Indian agriculturists and aided British revenue collection.

The rise of a strong indigenous capitalist class with an independent economic and financial base. The Indian capitalists were, in the main, independent of foreign capital They were also perhaps more enterprising than the foreign capitalists in India, with the result that investment under Indian capital grew considerably faster than British and other foreign investment.

By 1947, Indian capital had also made a great deal of headway in banking and life insurance. Indian joint-stock banks held 64 cent of all bank deposits, and Indian-owned life insurance companies controlled nearly 75 per cent of life insurance business in the country.

The bulk of internal trade and part of foreign trade was also in Indian hands. These positive features of the Indian economy have, however, to be seen in a wider historical context. First, the development of Indian industry and capitalism was still relatively stunted and severely limited. Then, occurring within the framework of a colonial economy, this industrialization took place without India undergoing an industrial revolution as Britain did

Economic drain:

The term ‘economic drain’ refers to a portion of national product of India which was not available for consumption of its peoples, but was being drained away to Britain for political reasons and India was not getting adequate economic or material returns for it.

The drain theory was put forward by Dadabhai Naoroji in his book Poverty and Un British Rule in India. The major components of this drain were salaries and pensions of civil and military officials, interests on loans taken by the Indian Government from abroad, profits on foreign investment in India, stores purchased in Britain for civil and military departments, payments to be made for shipping, banking and insurance services which stunted the growth of Indian enterprise in these services.

The drain of wealth checked and retarded capital formation in India while the same portion of wealth acce­lerated the growth of British economy. The surplus from British economy re-entered India as finance capital, further draining India of its wealth. This had immense effect on income and employment potential within India.

A portion of national product of India was not available for consumption of Indian people but was being drained away to Britain for political reasons and India was not getting returns for it. The major components of drain among others were profits on foreign investment in India, banking and insurance services, payments to be made for shipping, interests on loans, pensions of civil and military officials, etc.


Already by the end of the nineteenth century it was fully recognized that education was a crucial input in economic development, but the vast majority of Indians had almost no access to any kind of education and, in 1951, nearly 84 per cent were illiterate, the rate of illiteracy being 92 per cent among women.

This was marked by the  prevalence of the extreme inequality of income, resources and opportunities. A vast human potential was thereby left untapped in societal development for very few from the poorer sections of society were able to rise to its middle and upper levels.

The colonial educational system, otherwise, also suffered from many weaknesses which still pervade India’s schools and colleges. It encouraged learning by rote, memorization of texts, and proof by authority. The rational, logical, analytical and critical faculties of the students remained underdeveloped; in most cases the students could reproduce others’ opinions but had difficulty in formulating their own.

A major weakness of the colonial educational system was the neglect of mass education as also of scientific and technical education.



Health services were dismal. In 1943, there were only 10 medical colleges turning out 700 graduates every year and 27 medical schools turning out nearly 7,000 licentiates. In 1951, there were only about 18,000 graduate doctors, most of them to be found in cities. The vast majority of towns had no modern sanitation and large parts of even those cities which did, werekept out of the system, modern sanitation being confined to areas where the Europeans and rich Indians lived. A modern water supply system was unknown in villages and absent in a large number of towns. The vast majority of towns were without electricity, and electricity in the rural areas was unthinkable . Epidemics of smallpox, plague and cholera and diseases like dysentery, diarrhoea, malaria and other fevers carried away millions every year. Malaria alone affected one-fourth of the population.

Development of Regional Languages:

The British evolved a general educational system, based on English as the common language of higher education, for the entire country. This system in time produced an India-wide intelligentsia which tended to have a similar approach to society and common ways of looking at it and which was, at its best, capable of developing a critique of colonialism—and this it did during the second half of the nineteenth century and after.

But English-based education had two extremely negative consequences. One, it created a wide gulf between the educated and the masses. Though this gulf was bridged to some extent by the national movement which drew its leaders as well as its cadres from the intelligentsia, it still persisted to haunt independent India. Second, the emphasis on English prevented the fuller development of Indian languages as also the spread of education to the masses.

Legal system:

The character of the colonial state was quite paradoxical. While it was basically authoritarian and autocratic, it also featured certain liberal elements, like the rule of law and a relatively independent judiciary.

Administration was normally carried out in obedience to laws interpreted by the courts. This acted as a partial check on the autocratic and arbitrary administration and to a certain extent protected the rights and liberties of a citizen against the arbitrary actions of the bureaucracy. The laws were, however, often repressive. Not being framed by Indians, or through a democratic process, they left a great deal of arbitrary power in the hands of civil servants and the police. There was also no separation of powers between administrative and judicial functions. The same civil servant administered a district as collector and dispensed justice as a district magistrate.

The colonial legal system was based on the concept of equality of all before the law irrespective of a person’s caste, religion, class or status, but here too it fell short of its promise.

The court acted in a biased manner whenever effort was made to bring an European to justice. Besides, as court procedures were quite costly, the rich had better access to legal means than the poor.

Colonial rulers also extended a certain amount of civil liberties in the form of the freedoms of the Press, speech and association in normal times, but curtailed them drastically in periods of mass struggle. But, after 1897, these freedoms were increasingly tampered with and attacked even in normal times. Another paradox of the colonial state was that after 1858 it regularly offered constitutional and economic concessions while throughout retaining the reins of state power. At first, British statesmen and administrators strongly and consistently resisted the idea of establishing a representative regime in India, arguing that democracy was not suited to India. They said only a system of ‘benevolent despotism’ was advisable because of India’s culture and historical heritage.

Unity of india

The colonial state brought about a greater political and administrative unification of India than ever achieved before.

Building on the Mughal administrative system, it established a uniform system which penetrated the country’s remotest areas and created a single administrative entity.

The British also evolved a common educational structure which in time produced an India-wide intelligentsia which shared a common outlook on society and polity, and thought in national terms.

Combined with the formation of a unified economy and the development of modern means of communication, colonialism helped lay the basis for the making of the Indian nation.

But having unified India, the British set into motion contrary forces. Fearing the unity of the Indian people to which their own rule had contributed, they followed the classic imperial policy of divide and rule. The diverse and divisive features of Indian society and polity were heightened to promote cleavages among the people and to turn province against province, caste against caste, class against class, Hindus against Muslims, and princes and landlords against the national movement. They succeeded in their endeavours to a varying extent, which culminated in India’s Partition.


The British ruled India through a modern bureaucracy headed by the highly paid Indian Civil Service (ICS) whose members were recruited through merit based on open competition. The bureaucracy was rule-bound, efficient and, at the top, honest.

Following Indian pressure the different services were gradually Indianized after 1918—by 1947, nearly 48 per cent of the members of the ICS were Indian—but positions of control and authority were up to the end retained by the British.

Indians in these services too functioned as agents of British rule. Though their senior echelons developed certain traditions of independence, integrity, hard work, and subordination to higher political direction they also came to form a rigid and exclusive caste, often having a conservative and narrow social, economic and political outlook.

When massive social change and economic development was sought after 1947, the rigidity and the outlook of the bureaucracy became a major obstacle.

While the ICS was more or less free of corruption, corruption flourished at the lower levels of administration, especially in departments where there was scope for it, such as public works and irrigation, the Royal Army Supply Corps, and the police. During the Second World War, because of government regulation and controls, corruption and black marketing spread on a much wider scale in the administration as also did tax evasion, once rates of income tax and excise were revised to very high levels. There was also the rise of the parallel black economy.

Armed forces

The British left behind a strong but costly armed forces which had acted as an important pillar of the British regime in India. The British had made every effort to keep the armed forces apart from the life and thinking of the rest of the population, especially the national movement. Nationalist newspapers, journals and other publications were prevented from reaching the soldiers’ and officers’ messes. The other side of the medal, of course, was the tradition of the army being ‘apolitical’ and therefore also being subordinated, as was the civil service, to the political authorities. This would be a blessing in the long run to independent India, in contrast to the newly created Pakistan.



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