state the economic effect of company rule in India
Answers
The Economy of India under Company rule describes the economy of those regions (contemporaneously British India) that fell under Company rule in India during the years 1757 to 1858. The British East India Company began ruling parts of the Indian subcontinent beginning with the Battle of Plassey, which led to the conquest of Bengal Subah and the founding of the Bengal Presidency, before the Company expanded across most of the subcontinent up until the Indian Rebellion of 1857.
A number of historians point to the colonization of India as a major factor in both India's deindustrialization and Britain's Industrial Revolution. The capital amassed from Bengal following its 1757 conquest helped to invest in British industries such as textile manufacture during the Industrial Revolution as well as increase British wealth, while contributing to deindustrialization in Bengal.British colonization forced open the large Indian market to British goods, which could be sold in India without any tariffs or duties, compared to local Indian producers who were heavily taxed, while in Britain protectionist policies such as bans and high tariffs were implemented to restrict Indian textiles from being sold there, whereas raw cotton was imported from India without tariffs to British factories which manufactured textiles from Indian cotton and sold them back to the Indian market. British economic policies gave them a monopoly over India's large market and cotton resources.India served as both a significant supplier of raw goods to British manufacturers and a large captive market for British manufactured goods.
Indian textiles had maintained a competitive advantage over British textiles up until the 19th century, when Britain eventually overtook India as the world's largest cotton textile manufacturer.In 1811, Bengal was still a major exporter of cotton cloth to the Americas and the Indian Ocean. However, Bengali exports declined over the course of the early 19th century, as British imports to Bengal increased, from 25% in 1811 to 93% in 1840.[8] India, which was previously the world's largest economy under the Mughal Empire in 1700, had by 1820 fallen to become the second largest economy, behind Qing China.
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:-
✭ 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.