IEPH Lecture 2

8/11/2019 IEPH Lecture 2

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Indian Economic and Political

History2014

Session 2Rajesh Bhattacharya

[email protected]

Indian Institute o !ana"ement#alcutta 1


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$he decline o the !u"hal

em%ire1 $he !u"hal em%ire colla%sed

&ithin a e& decades ater

'uran"(eb)s death.2 Rise o re"ional %o&ers*+a&abs o

,udh and Ben"al- !arathas in theest- +i(am in the South.

3 East India #om%any becomes the rulero Ben"al ater the Battle o Plassey1//.

4 'ter the 'n"lo!aratha ars- the

East India #om%any emer"ed as thesu%reme territorial %o&er.


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Indian Institute o !ana"ement #alcutta2


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Sta"es o #oloni(ation

1//13001

ststa"e second hal o the 15

thcentury6 !ercantilist %hase

mar7ed by direct %lunder and the East India #om%any)smono%oly trade- unctionin" throu"h the 8in9estment) o

sur%lus land re9enues in the %urchase o- at lo& %rices- oIndian :nished "oods or e;%ort to En"land and Euro%e

2nd Sta"e :rst hal o the 13th

century6 Industrial Re9olutionin En"land dramatically chan"es the %attern o trade-transormin" India rom a %roducer and e;%orter omanuactured "oods to a %roducer o ra& materials orEn"lish actories.


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ca%ital "oods as &ell as consumer "oods6.Indian Institute o !ana"ement #alcutta

=


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EI# ater 1//E;traction o

'"ricultural Sur%lus inBen"al

1 Diwani ri"hts in Ben"al*$he EI# could no& raise

land re9enue.2 Pressure on zamindars and re9enuearmers

hi"hest bidders or re9enue arms in auctions6 toincrease re9enue.

3 >amine o 1//0 7illed onethird o the %o%ulationo Ben"al* almost 10 million.

4 $he 1301 >amine #ommission ound that t&el9eamines and our ?se9ere scarcities? too7 %lacebet&een 1/ and 155.

5 $he last bi" amine in British India &as the Ben"al>amine o 134=. 'ter inde%endence aminesdisa%%eared- des%ite treblin" o %o%ulation.

6

'martya Sen a"ued that the amines in the Britishera &ere due to the absence o democracy.


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!a;imi(ation o Aand

Re9enue1 1/53 $otal sur%lus o Ben"al &as Rs. =.2 crore-

o &hich the #om%any e;tracted Rs 2 crore - the

rest &as orzamindarsand others.2 Permanent Settlement o 1/3= conerred

o&nershi% ri"hts onzamindars in e;chan"e or a%ermanently settled re9enueobli"ation to thestate.

3 $o be"in &ith- the zamindar)s condition&orsened. His share &as :;ed at oneele9enth%art o the land re9enue.

4 Zamindari ri"hts &ere oten sold o orauctioned to ban7ersand merchants.


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Indian Institute o !ana"ement #alcutta


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Aand Re9enue and the

8tribute)1 Entire land re9enue &as treated as

"ross %ro:ts o the #om%any.


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Enlar"ement o Pro:t beore the8tribute) &as recei9ed in En"land.

Indian Institute o !ana"ement #alcutta


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British $rade &ith India

1 Im%orts rom India as a share oBritish im%orts increased rom 12D in 1/01 to 24D in 1/3/35.

2 British e;%orts to India increasedrom .4 D to 3 D.

3 $he coloni(ers &ere not loo7in" or

mar7ets or their "oods. $hey &ereloo7in" or colonial commodities&hich had mar7ets &orld&ide.

Indian Institute o !ana"ement #alcutta/


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$he si(e o the 8tribute)

'ccordin" to Iran Habib- in 1501- ata crucial sta"e o Britain)s industrialre9olution- drain or unreuited

transers to Britain rom Indiare%resented about 3D o the F+P othe British territories in India- 2D othe F+P o Britain and =0D o British

domestic sa9in"s a9ailable orca%ital ormation in Britain.



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Industriali(ation in

En"land1 ,ne 9ie& is that industriali(ation &as an

endo"enous %rocess in En"land*technolo"icalad9ancements- scienti:c s%irit- %ro%erty ri"hts andcontract la&s etc.

2 $he other 9ie& is that $he En"lish "ot cruciala%%renticeshi% in te;tiles industry and trade throu"h%artici%ation in the "lobal trade in Indian cottonte;tiles.

3 $echnolo"ical brea7throu"hs*In9entions by Gamesatt- Samuel #rom%ton- Games Har"rea9es- Richard

'r7&ri"ht in the second hal o the 15

th

century.4 $he #alico 'cts 1301/216 banned the im%ort ote;tiles into En"land ollo&ed by the restriction osale o most cotton te;tiles.

5 $ari on Indian "oods stee%ly raised in En"landbet&een 1/3/ and1514. . hyJ


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End o !ono%oly o EI#

1 Industriali(ation in Britain-ma7in" India a %otential mar7etor British Foods.

2 !ono%oly obsolete*the 9iciouscritiue o 'dam Smith in Wealthof Nations1//6

3

!ono%oly o EI# abolished in151=- e;ce%t #hina $rade.

4 'll mono%oly ri"hts o EI# &ithdra&nin 15==.


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E;%orts o British #otton

%iece "oods

Kear

Euro%e and

LS

Lnderde9elo%

ed ,ther

orld #ountries1520 0.4 =1.5 /.5

1540 23. ./ =.5

150 13.0 /=.= /./1550 3.5 52.0 5.2

1300 /.1 5.= .

E.G.Hobsba&m- industry and Empire- Pen"uin- Harmonds&orth-


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135- P". 14



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$he decline o merchants and

ban7ers1 $he Indian merchants and ban7ers &ere not %olitically

%o&erul under the !u"hals*because the state &asnot de%ended on them. $he !u"hal state had its o&n&ellor"ani(ed treasury and im%erial hea9ily "uarded

con9oys.2 $hey became %o&erul durin" the decline o the

!u"hal em%ire or ser9icin" the :nancial needs orre"ional %o&ers.

3 's India %assed into the hands o EI#- there &asonce a"ain a decline o indi"enous ban7ers andmerchants.

4 Entry o com%any ser9ants and %ri9ate Britishtraders into inland trade.

5 $he introduction o common com%any le"al tender-%ostal ser9ice and district treasuries led to thedecline o the indi"enous ba7ers and :nanciers.

Indian Institute o !ana"ement #alcutta1=


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#ontradictions in EI#)s

objecti9es1 $he im%ortance o tribute &as

undiminished.

2 Aand re9enues continued to bee;tracted at a 9ery hi"h ratethrou"hout lar"e %arts o India- e9enin ryotwariand mahalwarire"ions.

3 $he tribute traditionally too7 the ormo e;%ort o Indian commodities.

4 But deindustriali(ation closed thatroute.

5 #otton and Indi"o only %ro9ided shortterm solutions as 'merican cotton &as


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more suited to the British te;tilemachinery and est Indian indi"o%roduction outcom%eted Indian

indi"o. Indian Institute o !ana"ement #alcutta1


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#ro&n Rule and the third%hase o coloni(ation in

the 13thcentury1 Lnder the ne& re"ime the em%hasis

shited rom the le9y o direct tributethrou"h land re9enue to the e;%loitation oIndia as a mar7et and as a source o ra&materials and a destination or Britishca%ital.

2 $he transormation ozamindarsinto truelandlords*the ally o the British #ro&n-scared ater the Se%oy !utiny.

3 'bout the middle o the nineteenthcentury- actory %roduction &as e;tendedto all industries in Britain.


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4 Search or ne& %ro:table outlets orBritish ca%ital.

Indian Institute o !ana"ement #alcutta1/


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British orei"nin9estment and

de9elo%ment orail&ays

1 British Mnet orei"n in9estmentM &aseual to 42D %er cent o the netdomestic ca%ital ormation in :;edassets durin" 1503C 50D %er centdurin" 155053 and %ea7ed at 114Ddurin" 13014.

2 British ca%ital %ourin" into rail&aysconstruction in India. >antastice;%ansion o rail&ays in India- &itha "uaranteed rate o return o Dby the Fo9ernment o British India.



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E;%ansion o the mar7et orBritish

commoditiesHi"her inNo& o im%orts rom Britain as

the rail&ays o%ened u% mar7ets.

#otton te;tiles- sil7 "oods- &ool

manuactures- metal manuactures-machinery tools- eui%ment and rollin"stoc7 or rail&ays e;%anded tremendously.

's modern Indian industries emer"e- all themachinery "oods bein" to be im%orted

rom Britain.Indian e;%orts also e;%anded. estern

Indian cotton- Punjab heat- Ben"al jute-'ssam $ea- South Indian oilseeds andhides and s7ins etc. ,%ium alls behind.


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$he 8tribute)

1 India)s tribute in this %eriod till :rst &orld &ar be"an to berealised thou"h a multilateral tradin" %attern

1) India "enerated an e;%ort sur%lus &ith countries in theEuro%ean continent- Ga%an- the LS and other countries bye;%ortin" lar"e uantities o ood and ra& materials.

2) Britain had a hu"e e;%ort sur%lus &ith India e;%ortin"te;tiles and other manuactured "oods -includin" rail&aystoc7 -to India.

3) Britain- ho&e9er had de9elo%ed a massi9e balance o %aymentde:cit &ith the rest o the &orld lar"ely because o the massi9ein9estments it &as ma7in" "lobally includin" in the LS and the&hite colonies.

2 British e;%orts to the ne&ly industrialisin" countries o Euro%eand the LS &ere be"innin" to decline because o %rotectionist%olicies in these countries under"oin" industriali(ation.

3 In this situation- Britain used its e;%ort sur%lus &ith India andIndia)s tribute to adjust her balance o %ayment de:cit &ith

the rest o the &orld.Indian Institute o !ana"ement #alcutta


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20


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Flobal im%lications o the

8tribute)1 >lo& o in9estment rom mother

countries to the colonies o Euro%eansettlement o9erseas.

2 '%art rom the returns earned rom thatNo& o in9estments- the out&ard No&rom Britain su%%orted the lar"est No&o mi"rants rom Euro%e6 in the latenineteenth century- &hich not onlybrou"ht in hi"h returns because o theabundance o land and naturalresources in the settler colonies- butalso hel%ed im%ro9e the li9in"conditions o the Euro%eans let behindand the rise o LS' as the &orld)srichest country.


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$he 8$ribute) #ontd.6

1 $he burden o EI#)s Aondon establishment and odi9idends to its shareholders &as re%laced ater 155by the costs o Secretary oState)s India ,Oce- &hile the India

Documents

IEPH Lecture 2