Eduqo
Modern Indian History›Ch 2: British Policies & Reforms›Economic Impact & Drain of Wealth
Understanding Deindustrialisation, Naoroji's theory, and Colonial Famines.
The British rule transformed India's surplus into Britain's capital through the Drain of Wealth theory. Deindustrialisation ruined Indian artisans while commercialisation of agriculture caused frequent famines.
Memory Hooks for Fast Recall
| Feature | Pre-British | British Era |
|---|---|---|
| Agriculture | Food crops | Cash crops |
| Industry | Handicrafts | Machine goods |
| Wealth | Stays in India | Drained to UK |
Drain Theory
(Unidirectional Flow)
Unidirectional Flow
Wealth flows to Britain without return.
Cash Crops
(Forced Market)
Forced Market
Farmers grew Indigo instead of rice.
De-industrial
(Artisan Decay)
Artisan Decay
Handicrafts lost to British machine-made goods.
Home Charges
(Admin Costs)
Admin Costs
India paid for Britain's administration salaries.
MG Ranade wrote Poverty & Un-British RuleDadabhai Naoroji wrote it
Ranade was also an economist, but the book and 'Drain Theory' belong to Naoroji.
Drain was only in physical goldIncluded salaries and pensions
Home charges like pensions and interest on debt were major parts of the drain.
Commercialisation made farmers richCaused debt and famines
Profits went to British merchants, while farmers suffered from lack of food.
Q1.In which year did Dadabhai Naoroji publish his book 'Poverty and Un-British Rule in India'?
Q2.Which of the following was NOT a part of 'Home Charges'?