HIST363: Global Perspectives on Industrialization

The British rulers had no taste for India-produced luxury goods. Since they preferred to import European luxuries and goods, their purchasing power helped European, not Indian, manufacturers. Profits were transferred to England or deposited abroad and did not remain in India between 1757-1947, which would have helped meet educational and family expenses. The East India Company and the Crown levied huge extraneous charges to meet administrative expenses in India from 1858 onwards. The Crown levied "Home Charges" for all wars fought, railway goods imports, and government procurement.

The British changed the economic and social structure to favor the urban areas, created a plantation agricultural sector to meet their need for funds from exports, and helped the agriculture sector by reducing land taxes, land tenures, and improving irrigation. They reduced the village economy and the tribal economy. The British set the trend toward rapid urbanization and the rural economy was reduced considerably. The trend toward modernization and urbanization was cast and the trend continues even today. The trend toward commercialization of agriculture was also due to the British impetus to maximize their incomes and balance their imports from China.

The British contributed to Indian agriculture by shifting from food to cash crops, such as cotton, indigo, tea, and opium. Production of crops for the market was needed to supply cotton to the Manchester mills (due to the absence of American cotton as a result of the American Civil War and the abolishment of slavery). Cotton production in India gained momentum due to the railways built for transportation, mills for cloth production, and the development of rural roads for trade and commerce. The British converted India's system of subsistence agriculture to a plantation or commercial agriculture system because it had become inconvenient to them.

• The land revenue system was totally re-oriented and farmers had to pay land tax in cash. This led to increased monetization of the rural economy. Most farmers had previously paid land revenue in kind. So they had to switch to producing agricultural commodities which had a ready market.
  
  
• A new class of money lenders came up in the economy. All of the changes in Indian agriculture did not develop the crucial primary sector, agriculture. The colonial British administration was not interested in improving socio-economic conditions in India. Development for them meant creating markets to absorb British capital and expand returns for their elite.
  
  
• The increasing monetization of the rural economy and arbitrary land revenues spelled out the death of the 'jajmani' system in the villages and led to pauperization and creating a class of agricultural laborers who remained indebted and steeped in poverty and in perpetual bondage over generations.
  
  
• The destruction of the cottage industries and handloom industries pushed the rural people deeper into poverty. In 50 years, India changed from an exporter of exquisite textiles to an importer of mill cloth. The luxury goods segment of Indian industry could no longer compete with European goods since the ruling class had no appetite for the Indian goods they deemed to be of inferior quality.
  
  
• With no access to modern education for the masses – accompanied by massive changes in livelihoods, technologies, and systems – the income sources for the common people in rural areas were reduced. This caused mass impoverishment since the inclusive "village economy" had been shattered and people were forced to migrate to towns and cities in search of livelihoods and sustenance.
  

The Suvarna Bhumi, which was the Madhya Desa in ancient times, ceased to exist.

Dr. K G Karmakar
Professor and ex-MD, NABARD