Question

Critically examine the drain theory and it's impact on Indian economy in 100 to 150 words

Answer 1

Answer: The drain of wealth refers to the transfer of raw materials of India to Britain without any givebacks

Explanation:

Answer 2

The drain theory and it's impact on Indian economy are as follows:

• Dadabhai Naoroji developed the ''Drain Theory'' for the first time.
• There were three types of drain which includes the remittance to England of a proportion of salaries, the military expenditure and the remittances made in sterling. All these are its type.
• In India, this caused poverty in India. The financial mechanism maintained the British rule, led to transfer of income from India to Britain, striking a 'bleeding drain' on the economy of India.