explain the drain theory
Answers
Explanation:
One of the reasons that the Drain theory is attributed to Naoroji is his decision to estimate the net national profit of India, and by extension, the effect that colonial rule had on the country. Through his work with economics, Naoroji sought to prove that Britain was draining money out of India.
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Answer:
The ‘Drain Theory’ was first developed by Dadabhai Naoroji in a series of speeches and writings subsequently published in 1901 in a volume entitled Poverty and un-British Rule in India. Marginal contributions to the theory were also made by R.C. Dutt, G. S. Iyer, G.K. Gokhale and P.C. Ray.
During the late 19th and early 20th century, ‘the drain theory’ came to be seen as the symbol of Indian economic nationalism. Its message was that financial mechanisms by which British rule in India was maintained led to a transfer of wealth and income from India to Britain, imposing a ‘bleeding drain’ on the Indian economy.
The essence of the drain theory is that the unilateral transfers that India was compelled to make to Britain systematically stripped the country of resources and thus perpetuated poverty. Naoroji observed that ‘the chief cause of India’s poverty, misery, and all other material evils is the exhaustion of its wealth, which continuously and increasingly exhausting and weakening its production, by the excessive expenditure on the European portion of all its sources, and the burden of a large amount each year to be paid to foreign countries for interest on the public debt, which is chiefly caused by the British rule’.