(2) Explain the economic impact of the Company Rule in India.
Answers
Explanation:
Before the advent of European company, India had been a self-sufficient rural economy. Later it was transformed into colonial economy which means suppliers of raw materials to British manufacturers and also market for British manufactured goods.
Impact on Economy:
1. Commercialisation of Agriculture. They were forced to produce cash crop like cotton, jute etc. in lieu of food crops.
Company servants had the monopoly of market and they manipulated the price of commodity which forced them sell their Agricultural products at low cost.
Extremely high land revenue were imposed on peasants in form of different revenue systems which left them to do Agriculture barely at subsistence level.
British has gone through industrialisations during 18th century which enabled them to produce goods by using machines. Those machine made products are flooded into Indian markets through free trade. Indian products gradually lost its market.
Trade policy has been made deliberately to avert the growth of Indian handicrafts in foreign markets. Higher import duty has been imposed on Indian products which makes the Indian products unable to compete other products which ultimately causes deindustrialisation.
Due to above reason, Increase in Unemployment. Since there was no avenue for employment. Finally they went back to rural areas to do agriculture.
Unemployment causes increase in pressure for agriculture which leads to land fragmentation. Hence, Agriculture deteriorated further.
By introducing railways in 1850’s they exploited the rural areas effectively.
Rural self sufficient economy has been declined to subsistence level agriculture