WRITTEN BY R. NANJAPPA                        

Post No. 8284

Date uploaded in London – – – 4 July 2020   

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R. Nanjappa


This essay is in continuation of the one on Adam Smith. It may appear that these are merely economic matters, and would interest only students of economics. That is not correct. After Nehru took over as PM, he promoted the Marxist view that India was poor and backward because of its agriculture. He completely obliterated the insights of Gandhiji. On the other hand, Dr. Ambedkar too propagated the view that India’s backwardness was due to is village-based economy. Thus both of them worked against the spirit of Gandhiji.

Today, Indian public life is dominated by Nehru-admiring leftist-secular crowd, and the large SC/ST sector of Ambedkarites. Lakhs of school and college students learn this view as the official history of India. I found that last year the Plus 2 Economics textbook in Tamil Nadu still advocated this view and praised Nehru and his 5 Year Plans! This is the default position.

So it is necessary to counter this distorted view of history. Our people have to learn that India was not poor when the British came here and our poverty was caused by them. What better source to learn it from than the testimony of the British themselves?

Hence this article.   R. Nanjappa




Romesh Chunder Dutt

It was given to a distinguished Indian- Romesh Chunder Dutt- to follow on the work of Adam Smith and investigate the state of the Indian economy in the wake of the rule by East India Company.

 He published two distinguished volumes on the subject by the turn of the 19th century. He was a member of the ICS, but had retired voluntarily at the age of 49 to devote himself to his literary and academic pursuits. He did pioneering and painstaking research, accessing original documents and his volumes are full of statistics, gathered from official sources. He was not given to polemics, but but the serious facts he pointed out in sober language made great impact.

Sri Dutt was President of the Indian National Congress

at its 15th Session at Lucknow, 1899.

The Economic History of India

In the preface to the first edition of the first volume published in 1901, he pointed out:

  • the poverty of the Indian population at the present day is unparallelled in any civilised country.
  • the famines of 1877 and  1878, of 1889 and 1892, of 1897 and 1900 had carried off at least fifteen million people- the population of a fair-sized European country.
  • the sources of national wealth in India have been narrowed under British rule.
  • the British manufacturer  (in the words of historian  H.H.Wilson) “employed the arm of political injustice to keep down and ultimately strangle” the Indian competitor with whom he could not contend on equal terms.
  • quoting Colonel Briggs, he said: ” A Land Tax like that which now exists in India professing to absorb the whole of the landlord’s rent, was never known under any government in Europe or Asia.”
    • under the native rulers, all their money was spent in India and helped Indians. Even their expenses on war went to support the princely houses and the thousands of soldiers and their families. Even their gorgeous palaces, their luxuries and monuments they built fed and encouraged the manufacturers and artisans of India. Under wise kings or foolish ones, the taxes collected flowed back to the people and fructified their trade and industries. 
    • but the East India company changed all this. They bought their merchandise out of the revenues of India and sold them in Europe for their profit. They extracted high interest on their stock. All the money they raised in India flowed to Europe.

Then Dutt pointed out the more damaging developments:

  • East India company’s trade was abolished in 1833. The company was abolished in 1858, but the policy continued. The empire was transferred from the company to the Crown, but the people of India paid the purchase-money!  Indian Debt was 51,000,000 pounds sterling in 1857, but rose to 97,000,000 in 1862. And following forty years of ‘peace’, it stood at 200,000,000 in 1901! One half of the net revenues of India, then 44 million sterling, flowed annually to England.”Verily the moisture of India blesses and fertilises other lands”.

Thus, the dawn of a new century found India deeper in distress and discontent than any preceding period of history.

For those who desire to be well informed in these matters, there is a no alternative to reading the book of R.C.Dutt. It is not possible to give even a summary as it is so full of factual details, all gathered from official sources, like documents of Commissions, proceedings before committees, official reports, eye-witness accounts, etc. He explains in graphic detail how our native trade was systematically destroyed: the company transported its goods free of tax, while the local merchants were taxed heavily; unable to compete, they had to fold up. All the revenues collected in India were treated as profit and remitted abroad. The land revenue was so high that it left no income or surplus with the farmers. What happened in Bengal was repeated elsewhere. 

To be continued…………………………………….

tags — India, Economic Downfall, R C Dutt

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