Economic Impact of British Rule in India

Some of the major impacts of British rule in India are listed below.

Land Revenue Systems in British India

The different land settlements introduced by the British brought misery to the peasants.

Zamindari System

The Permanent Settlement or the Zamindari Settlement (1793) in Bengal and Bihar was introduced by Lord Cornwallis. According to this settlement the Zamindari got proprietary right on land and these rights became permanent. The cultivator who had enjoyed some rights was now reduced to the status of tenant on land. By this the Zamindars were entrusted with revenue collection and they had to pay ten-eleventh (10/11th) of the rental to the state. The rules regarding the payment of revenue were very rigid. Defaulters often lost claim over the land. But in future any increase in the rental of an estate could be kept for the zamindar himself. This settlement turned out to be very harmful for the peasant and also for some zamindars.Since the initial revenue demand by the British was very high a number of zamindars were unable to pay the revenue demanded by the British and as a result lost their land.

Mahalwari System

In 1822 a new kind of settlement called the Mahalwari System was introduced in the Gangetic valley the North -western provinces, parts of Central India and the Punjab. This revenue settlement was made village by village or estate by estate with local chiefs or hereditary collectors of a mahal .However in this system the amount of revenue was open to periodical revision. The government demand was also very high so it did not bring any benefit to the cultivators.

Ryotwari Settlement

The Ryotwari Settlement was introduced in parts of Madras and Bombay Presidencies. Under this system the British government fixed the revenue directly with the ryots or cultivators. But in most parts the land revenue fixed was very high. The government also had the right to increase the rate of revenue at will. Also the peasants could be dispossessed of their land if they failed to pay revenue in time. Thus the British revenue policies and the different land settlements introduced in India did not serve the interest of the peasants. They remained oppressed and exploited.

Growth of Intermediary Interest in Land

One important feature of these land revenue settlements was the growth of intermediary landed interest. The absentee Zamindars used to lease or let their lands to ijaradars and pattidars. In turn the latter gave the land on rent to others. Thus a large number of intermediaries came into being between the government and the peasants.

These intermediaries only enjoyed profits by renting or sub renting land. This was particularly the scenario of Bengal Presidency. Poor cultivators were burdened with heavy taxation. Their condition became miserable day by day. No welfare measures were adopted to give them relief.

Commercialization of Agriculture

This was yet another result of British economic policies in India. Commercial agriculture -crop production for market rather than for consumption was encouraged by the colonial rulers. The commercialization of agriculture disrupted the traditional structure of Indian village economy. The new land system had already weakened the existing rural framework.

Now it was shattered by the spread of commercial agriculture. This process of commercialization also adversely affected the life and economic position of the peasantry.

Growth of agricultural laborers

The number of agricultural laborers rapidly increased due to the impoverishment of a large section of the peasantry. This class of people along with the poor peasant masses formed the majority of the rural population. Vast amount of agricultural lands were transferred to the possession of Zamindars and moneylenders. The political power and influence of the British played a major role in the whole process.

Destruction of Handicraft Industries during British Rule in India

The British economic policies destroyed the handicrafts and cottage industries of India which at one time formed the primary sources of trade and wealth. Cotton weaving and spinning industries, silk and woolen industries, pottery, paper, metal and tanning all were ruined by British.

This broke the age-old relation between agriculture and industry in the countryside and led to the destruction of the self-sufficient Indian village economy. This also resulted in widespread unemployment and overcrowding of the agricultural sector.

Economic Drain during British India

After the establishment of British rule in India there was an enormous drain of wealth from India to Britain. This adversely affected the economy of India and country became poorer and poorer day by day. This drain began in the decades following the battle of Plassey in 1757.There was a constant flow of India’s wealth out of the country with no returns at all. The British officials carried home immense fortunes extracted from the Indian people.

This kind of economic exploitation and the drain of Indian wealth formed the integral part of British policies. The exploitative character of British rule and its harmful impact on the lives of the Indians led to the rise of resentment and anti-British feelings in the minds of people. They tried to resist the imperialist and colonialist forces which had brought so much misery and hardship in their lives.