Explain the Drain Theory.
Answers
Explanation:
Dadabhai Naoroji gave six factors that caused external drain. These are:
External rule and administration in India.Funds and labour needed for economic development was brought in by immigrants but India did not draw immigrants.All the civil administration and army expenses of Britain were paid by India.India was bearing the burden of territory building both inside and outside India.India was further exploited by opening the country to free trade.Major earners in India during British rule were foreigners. The money they earned was never invested in India to buy anything. Moreover they left India with that money.
Not only this, but through different services such as railways, India was giving a huge amount to Britain. On the other hand, trade as well as Indian labour was deeply undervalued. Along with this, the East India Company was buying products from India with Indian money and exporting it to Britain.