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Colonial Factors: British Raj

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Colonial factors India was under “British Raj” for almost a century. As India was a British colony, its functioning was thoroughly dictated by its oppressors through its various administrative stances and fiscal and trade policies. The main reason for which the British are blamed for the extreme underdevelopment of the Indian economy during the entire colonial period was the so called ‘drain of wealth’ which was highlighted by Dadabhai Naroji. A number of commissions and omissions of the British Colonial rule also contributed significantly to India’s abysmal state. There were other reasons as well. The main factors that contributed to the dire state of India’s economy during eth colonial period are elaborated below - Commissions: The …show more content…

Other local industries also suffered some decline, and India underwent de-industrialization. The Indian handicrafts which were renowned world over, collapsed under the colonial rule due to the competition posed by the machine made goods that were imported from Britain. The ability of mass production of goods helped Britain to flood the Indian markets with cheap products especially cotton textiles. Further, the railways facilitated the reach of these goods to remotest parts in India and the procurement of raw materials from these parts. The traditional handicrafts industry also faced a tough competition from these goods produced in bulk. The destruction of traditional industries, devastated the domestic market led to overcrowding in the agrarian sector and furthered the negative affect of structural factors on the economy during colonial times. Trade Policy: The trade policy adopted by the British regime made India a resource haven for raw materials and a dumping ground for their finished products and restricted India’s economic growth. Raw materials for the Indian industries became costlier and thus made domestic products non-competitive. The British also compelled the Indian craftsmen to sell their goods below market price and they hired their services at below the prevailing wages. During their rule, the British also imposed various restrictions and regulations to control trade and domestic

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