The British conquest had a pronounced and profound economic impact on India.

The economic policies followed by the British led to the raped transformation of India’s economy into a colonial economy whose nature and structure were determined by the needs of the British economy.

In this respect the British conquest differed from all previous foreign con-quests. The previous conquerors had overthrown Indian political powers but had made no basic changes in the country’s economic structure; they had gradually become a part of Indian ‘life, political as well as economic.

The peasant, the artisan, and the trader had continued to lead the same type of existence as before. The basic economic pattern that of the self-sufficient rural economy had been perpetuated. Change of rulers had merely meant change in the personnel of those who appropriated the peasant’s surplus. But the British conquerors were entirely different. They totally disrupted the traditional structure of the Indian economy.

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There was a sudden and quick collapse of the urban handicrafts industry which had for centuries made India’s name a byword in the markets of the entire civilised world. This collapse was caused largely by competition with the cheaper imported machine-goods from Britain.

The ruin of Indian industries, particularly rural artisan industries, proceeded even raidlier once the railways were built. The railways enabled British manufactures to reach and uproot the traditional industries in the remotest villages of the country. As the American writer, D.H. Buchanan has put it, ‘The amour of the isolated self-sufficient village was pierced by the steel rail, and its life blood ebbed away.’

The cotton-weaving and spinning industries were the worst hit. Silk and woolen textiles fared no better and a similar fate overtook the iron, pottery, glass, paper, metals, and guns, shipping, oil-pressing, tanning and dyeing industries. Thus British conquest led to the de-industrialisation of the country and increased dependence of the people on agriculture. No figures for the earlier period are available but, according to census Reports, between 1901 and 1941 alone the percentage of population dependent on agriculture increased from 63.7 per cent to 70 per cent.

This increasing pressure on agriculture was one of the major causes of the extreme poverty of India under the British rule. In the very beginning of British rule in Bengal, the policy of Clive and Warren Hastings of extracting the largest possible land revenue had led to such devastation that even Cornwallis complained that one-third of Bengal had been transformed into ‘a jungle inhabited only by wild beasts.’ Nort did improvement occur later. In both the permanently and the temporarily settled Zamindari areas, the lot of the peasants remained unenviable.

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They were left to the mercies of the zamindars who raised rents to unbearable limits, compelled them to pay illegal dues and to perform forced labour or begar, and oppressed them in diverse other ways. The condition of the cultivators in the Ryotwari and Mohalwari areas was no better.

Here the Government took the place of the zamindars and levied excessive land revenue which was in the beginning fixed as high as one-third to one-half of the produce. Heavy assessment of land was one of the main causes of the growth of poverty and the deterioration of agriculture in the 19th century. The evil of high revenue demand was made worse because the peasant got little economic return for it.

The Government spent very little on improving agriculture. It devoted almost its entire income to meeting the needs of British-Indian administration making the payments of direct and indirect tribute to England and serving the interests of British trade and industry. Even the maintenance of law and order tended to benefit the merchant and the money-lender rather than the peasant.

The harmful effects of an excessive land revenue demand were further heightened by the right manner of its collection. Land revenue had to be paid promptly on the fixed dates even if the harvest had been below normal or had failed completely.

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But in bad years the peasant found it difficult to meet the revenue demand even if he had been able to do so in good years whenever the peasant failed to pay land revenue, the Government put up his land on sale to collect the areas of revenue. But in most cases the peasant himself took this step and sold part of his land to meet in the government demand. In either case he lost his land. The money-lender was greatly helped by the new legal system and the new revenue policy.

Gradually the cultivators in the Ryotwari and Mahalwari areas sank deeper and deeper into debt and more and more land passed into the hands of money-lenders, merchants, rich peasants and other moneyed classes. The process was repeated in the Zamindari areas where the tenants lost their tenancy rights and were ejected from the land on became subtenants of the money-lender. The process of transfer of land from cultivators was intensified during periods of scarcity and famines.

The Indian peasant hardly had any savings for critical times and whenever crops failed he fell back upon the money lender not only to pay land revenue but also to feed himself and his family. By the end of the 19th century, the money-lender had become a major curse of the countryside and an important cause of the growing poverty of the rural people. In 1911 the total rural debt was estimated at Rs. 300 crores. By 1937 it amounted to Rs. 1800 crores.

The entire process became a vicious circle. T tie pressure of taxation and growing poverty pushed the cultivators into debt which in turn increased their poverty. In fact, the cultivators often failed to understand that the money­lender was an inevitable cog in the mechanism of imperialist exploitation and turned their anger against him as he appeared to be the visible cause of their impoverishment. For instance, during the Revolt of 1857, wherever the peasantry rose in revolt, quite often its first target of attack was the money-lender and his account books. Such peasant actions soon became a common occurrence.

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The growing commercialization of agriculture also helped the money-lendercuna-merchant to exploit the cultivator. The poor peasant was forced to sell his produce just after the harvest and at whatever price he could get as he had to meet in time the demands of the Government, the landlord, and the money-lender. This placed him at the mercy of the grain merchant, who was in a position to dictate terms and who purchased his produce at much less than the market price. Thus a large share of the benefit of the growing trade in agricultural products was reaped by the merchant, who was very often also the village money-lender.

The loss of land and the over-crowding of 1 caused by de-industrialisation and lack of mode industry compelled the landless peasants and ruin artisans and handicraftsmen to become either tenant of the money-lenders and zamindars by paying rack rent or agricultural labourers at starvation wages.

The peasantry was crushed under the triple burden of the Government, the zamindar or landlord, and the money-lender. After these three had taken their shar: riot much was left for the cultivator and his family to subsist on. It has been calculated that in 1950-51 land rent and money-lenders’ interest amounted to Rs. 14″ crores or roughly equal to one-third of the total agricultural produce for the year. The result was that the improvishment of the peasantry continued as also an increase in the incidence of famines. People died in millions whenever droughts or floods caused failure of crops and produced scarcity.