Colonialism protection was given to fledgling Indian industry which

Colonialism and capitalism led to a complex integration of colonies into world economy in a
subservient manner. Indian raw material was cheaply exported and finished goods were
expensively imported which also destroyed domestic industries, handicrafts and handlooms.
Ruined artisans failed to find alternative employment and crowded agriculture as sharecroppers
and laborers. Modern industries that were developed were guided colonial interest and they
were also stunted in their growth. They couldn’t even replace the erstwhile homegrown cottage
industries, handlooms and handicrafts. Before 1900, cotton, jute and tea dominated and before
1930s, cement, sugar and paper dominated. Hallmark of backwardness of Indian industry was
virtual absence of capital goods and machinery industry and equipment were largely imported.
Further, industrial development was highly uneven in spread. Modern industry contributed a
meager 8% of national income at the time of independence. Similarly, electricity and banking
was also grossly ignored.
This subservient and disadvantaged position led to extremely poor domestic savings – less than
3% of GNP, as compared to 33% today. Even this chunk of savings was misappropriated by the
colonial rulers in form of economic drain, military and administrative spending. From 1890 to
1947, military spending amounted 50% of total government budget. State support to industries
was zero in contrast to most of the European countries at that time. While free trade was established with India no tariff protection was given to fledgling Indian industry which was done
aggressively at home. Similarly, currency policy was manipulated in colonial favor.
Further, tax structure was highly iniquitous, as peasantry was heavily taxed and upper class like
bureaucrats, landlords etc paid hardly any tax. In 1900, land revenue alone contributed more
than 50% of government revenues and salt tax another 16%. As a result, poor investment and
lack of modernization of agriculture lead to poor produce and stagnation. Moneylenders,
landlords and middlemen made the situation worse and they too find exploitation of
sharecroppers, tenants and laborers easier than investing in agriculture. Prime agricultural land
was diverted to commercial crops leading to problems of food security as well. At the time of
independence, 70% land was with landlords and landlessness was at historic high level of 28% at
time of independence. Land holdings had fragmented to uneconomical sizes.
Better means of communication like railways were used not for development of hinterlands, but
to make inroads for exports of rural goods. Railway freights rates were discriminatory and
discouraged internal movement of goods and promoted external trade. India suffered many
famines despite good connectivity. Last major famine was Bengal famine of 1943 which took toll
of more than 30 lakh lives.
Another hallmark of backwardness was high proportion of rural population which stood at more
than 80% at the time of independence. Dependency on agriculture increased from 67% in 1901
to more than 70% in 1947.
Education was also underdeveloped and technical education was even worse with only 7
engineering colleges at the time of independence. Similarly, health facilities were also poor and
there were just 10 medical colleges by 1947 and epidemics were a regular phenomenon. Life
expectancy was hardly 30 years. Medium of higher education was English throughout the
country. It stifled development of local languages and created a gulf between educated
intelligentsia minority and unlettered masses creating a social divide. Learning by rote was
promoted at the expense of rational inquiry. Mass education and girls’ education were grossly
By 1947, almost 50% bureaucrats were Indians, but top positions were still manned by nonIndians.
Further, bureaucracy was replete with elite class and caste and posed a major challenge
in desired social change after independence with its rigid and conservative outlook. Though ICS
officers were largely upright, lower level officials were notoriously corrupt and corruption
reached great heights during Second World War as government tried to increase control and
taxes. It led to massive black-marketing and corruption.
There were some positive features of colonial rule as well. Communication means were well
developed. Indian capitalist class also grew after 1914 and by end of Second World War, more
than 60% of industry was driven by Indian capital. Indian capitalist class was more enterprising
and took bold steps after 1914. Similarly, Indian capital had also made significant inroads in
banking and insurance sector. Further, colonial rule also established modern principle of ‘rule of law’ and judiciary was also relatively independent despite the fact that judicial system was
expensive and detrimental to the poor. Further, for a long time judicial and administrative
functions were not separated and bureaucracy wielded enormous power. Several liberties were
also extended and press was also modernized. Constitutional reforms were started after 1857,
though real power vested with colonial powers. Only 3% of Indians were able to vote by 1919
and just 15% by 1939. British also led administrative unification of India and through a uniform
educational, judicial and civil structure they achieved union of India. But paradoxically, they
simultaneously also pursued their divide and rule policy as well which culminated into
participation and communalization of Indian society.
Just a few months before his death, Thakur Rabindranath wrote in 1941 ‘The wheels of fate will
someday compel the English to give up their empire. But what kind of India will they leave
behind, what stark misery? When the stream of their centuries’ administration run dry at last,
what a waste of mud and filth will they leave behind them’.