Company’s Regime: Impact on India 2.0

(iv) Following the grant of Diwani and Nizamat, there came a qualitative change in the commercial relations with India. The Company could now, and really did use its political influence to acquire monopolistic control over the Indian trade. With the Dewani helping the Company to use wealth obtained though the collection of revenue, the export of the Indian goods to England and through England to Europe increased, reaching for example to £5.8 million in 1797?98 from £1.5 million in 1750-51 , but in the process, the Company took advantage of its monopolistic power to dictate lower prices to the Indian weavers. At about this time, the industrial revolution began showing its results, especially in the manufacturing industry. What was a mere £156 worth the British cotton exports to the East, and mostly to India in 1794 rose to nearly £1100,000 worth British cotton exports in 1813. This was a great blow to the Indian cotton-textile industry when it not only lost its foreign markets but its own market in India: India began losing grounds against the British manufactured products. The imported British cotton goods increased from £ 1100,000 worth in 1813 to £6,300,000 worth in 1856 , The prohibitive import duties sealed the destiny of the Indian goods export: 67112% duty on the Indian calicos, 371/2% on Indian muslins, the duty of three times its cost price on sugar while the British imports to India faced only two to four per cent duty in India. Heavy duties were imposed on the Indian imports to Britain in other industries such as silk goods, iron, pottery, glassware and paper. All this led to the destruction of the Indian industries, rendering, the Indian artisans either out of job or to become landless agriculture workers. The Company’s contribution to the Indian industry was to destroy India’s capacity as an industrial state and transform India into a consumer of the British manufactured products and a supplier of raw-materials.

(v) The drain of wealth from India to Britain, either through the Company or through its employees was another impact of the Company’s rule in India. Without the India capital, either through the Company’s trade profits from the Indian goods or through revenue collections (the Diwani right : revenue collection in 1762-63, ‘ 64.5 lakhs, which rose to ‘ 1.47 crore in 1765-66) or through the Company’s employees indulgence in private trade, the British banks would have found it impossible to fund the industrialization of Britain which took place during the 18th  and the 19th  centuries. The 1812 report of the English East India Company stated. “The importance of that immense empire to this country is rather to be estimated by the great annual addition it makes to the wealth and capital of the kingdom………….. William Digby tells us: “During the last thirty years of the century (i.e.; the 19th century), the average drain would not have been far short of £30 million per year or, in the thirty years, £900 million, not reckoning interest.” The amount of treasure, an another estimate says, transferred from India to English banks between the battle of Plassey (1757) and battle of Waterloo (around 1815) had been from $2500 to $5000 million: Hyndman is of the opinion that at least $ 175 million was drained away every year from India without a cent’s return. The Company and its employees kept adding to their profits with unbounded ocean of wealth-the Company used every means, mostly foul, to keep the power in India through, as Lord Macaulay says, the presents of shawls and silks, birds’ nests and attar of roses, bulses of diamonds, and bags of diamonds, “to ministers, mistresses and priests while its employees kept feeding themselves with wealth earned through their private trade or gifts from the Indian princes”. Clive, for example, obtained a quarter of a million pounds by way of corruption; Thomas Pitt, great grandfather of William Pitt, was another who made his fortunes as the Governor of Madras; Warren Hasting (1773-85) was tried on charges of corruption. By 1780, about a tenth of the seats in Parliament were held by ‘nabobs’, or as Horace Walpole said in 1773: “What is England now? A sink of Indian wealth, filled by nabobs” We may, thus, conclude that India, before the advent of the Company, was second biggest economy in the world contributing 22% to the overall world GDP and by the time, the Company left, it was around 12% in 1857 which went down to less than 0.1%. The critics of colonialism such as Dadabhai Naoroji, R.C. Dutta and G. Subramania lyer in their writings have shown the extent of drain of wealth from India to Britain. The Company made India poor whereas the British Government’s rule over India made both the country and her people poorer.

(vi) The impoverishment of agriculture and the destruction of self-sufficing rural economy constituted another impact of the Company’s regime. Just five years after the grant of Diwani, the Company’s revenue had tripled: in 1773 , receiving 2.3 crore and beggaring, thus, the people. The Company’s thrust for more and more money was unquenched, for it wanted more capital (i) to pay for its purchases of Indian handicrafts and other goods for export, (ii) to meet the cost of the conquest of the whole of India and the consolidation of British rule, (iii) and to pay for the employment of thousands of her employees in India’s administration. The Company began devising means and methods to secure as much capital from India as possible. Taxing the Indians, especially the farmers were one lucrative source of revenue. The Company introduced newer methods of extracting land revenue from the Indian peasants, introducing Zamindari system (Cornwallis) in 1793 through the Permanent Settlement in the provinces of Bengal, Bihar, Orissa and Varanasi; the Ryotwari system (Munro) in 1820 in Madras, Bombay, parts of Assam and Coorgh, and the Mahalwari system introduced by Hastings in 1822 and, modified and improved in 1833 by Lord Bentinck, in the Central Provinces, Agra, Punjab, Gangetic valley. The Zamindari system was heavily favourable to the Company which got 45% and the Zamindar about 15% while only 40% was left for the cultivator. In the case of ryotwari system, the land revenue was somewhere between 46 and 50 percent, to be revised upwards every 20 to 30 years. In the case of the Mahalwari system, the land revenue share of the Company was as high as 83 percent of the produce but was later revised downwards, to 66 percent.

The Company commercialized agriculture: the land became a commodity, now; and because of it, there emerged new social classes of Zamindars, absentee Zamindars, the money-lenders, the rich peasants, the poor peasants, and the landless labourers. The Company blew up the rural self-sufficiency and made the rural people jobless and unemployed, (destroying the rural domestic industry in the process), leading ultimately to poverty, impoverishment, backwardness of the Indian peasantry with famines and droughts looming large on the farmer’s head, and hunger and starvation facing him every day : famines and scarcities were both numerous and widespared.

(vii) Traders as the English East India Company’s people were, their chief aim was to make as much profit as they could from India and her resources and through all means possible, fair or foul. The Company had the civil servants trained in a feeder college Hallebury and intellectuals such as Edward Strachey, Thomas Love Peacock and both James and John Stuart Mill——all supported by militarily and administratively experienced governors and governors general. The Company was to exploit India in every possible manner and that was why the Indians were completely excluded from occupying any high position in the Company, both in civil and military service. In 1842, as one estimate states, there were 836 employees in all categories of service under the Company out of which 785 were employed in India, but there was not a single Indian among them. On the other hand, in 1857, for instance, the strength of the army of the Company in India was 311,400 of whom 265,900 were Indians_—all positioned at the lower level: only three Indians in the army received a salary of “300 per month. The highest Indian officer was a subedar. The police, known as the third pillar of the Company’s regime, was instituted to establish order and prevent conspiracies and was later to supperss the national movement in India.

(viii) As elsewhere, the Indians, in the judicial organization, were appointed at the lowest positions. In fact, the whole judicial system was English-oriented and did not, in any sense, had any conformity with the Indian system. The rule of law and equality before law, as introduced in India by the Company were, indeed, significant, but they benefitted the Europeans in general and the English in particular. Similarly, the introduction of the western culture and English language, through efforts as late as 1833 and 1853 , helped only teach the colonized interpretation of the Indian past or as Macaulay had articulated, to help grow a class of people “Indian in blood and colour, but English in tastes, in opinions, in morals and intellect.”

Conclusion The Company’s regime, in fact, had, by and large, the most damaging effects on India. The Company found the Indian society both caste-ridden and religionridden and made it caste-conflictive and religiously divided. It found the composite culture thriving and booming, and made it as segregated as it could be. It found the Indian economy one of the richest one in the world, and made it as poor as it could be. It destroyed the native industry; it ruined the self sufficient village and made unemployment and deprivation as the lots of the Indians. It developed railways, canals and bridges not to modernize India but to bring raw-materials to be sent to Britain, and help soldiers protect Company’s property. It introduced the English language to help missionaries introduce and promote Christianity in the name of ‘civilising’ the natives, though in the process, certain educational institutions began functioning in India. The Company found the Indian literate traditional and made him anglicized. It found a destabilized India and made it a disintegrated one. It did not even spare the Taj Mahal, and used it as a place where one could drink in private and where its parks were found strewn with figures of inebriated Company’s soldiers. The Company’s regime, thus, was detrimental to the interests of both India and her people. In economic terms, India was transformed into a source of raw-materials for the British industries on the one hand, and a market for the British goods on the other. The English did help to contain social evils like sati, female infanticide, child marriage, polygamy and the like but did nothing to improve the deteriorating conditions of the common people. The reforms introduced by the Company were inadequate or half-hearted. The Indians began adopting the western culture, belittling their own ways of living; our economy was made a colonial economy; we were forced to make land a commodity and its products, for sale in the market: cash crops came to be harvested, replacing those, for use by the people; urban development was restricted to the Company’s administrative officers who were rigid in rules and inhuman in behavior. C.N. Parkinson summarized the Company’s regime in these words. “How was the East India Company controlled by the Government? What was its object? To collect taxes. How was its object attained? By means of a standing army, what were its employees? Mostly soldiers; the rest civil servants. That is how a commercial organization ruled 9.9 crore Indians, controlling 70 million acres of land, issuing its own coins and supporting an army of 200,000 men, all of which the East India Company, did by 1800.” Adam Smith denounced the Company as “a bloodstained monopoly: burdensome, useless, and responsible for grotesque massacres in Bengal.” Karl Marx, describing the Company’s rule in India, says: “England (i.e.; the Company’s regime) has broken down the entire framework of Indian society, without any symptoms of reconstitution yet appearing.”


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