The impact of the drain theory of dadabhai nauroji in the growth of economic nationalism
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The Impact of the Drain Theory of Dadabhai Nauroji in the Growth of Economic Nationalism!
Of all the national movements in colonial countries, the Indian national movement was the most deeply and firmly rooted in an understanding of the nature and character of colonial economic domination and exploitation.
Its early leaders, known as the moderates were the first in the 19th century to develop an economic critique of colonialism.
The focal point of the nationalist critique of colonialism was the drain theory. The nationalist leaders pointed out that a large part of India’s capital and wealth was being transferred or drained to Britain in the form of salaries and pensions of British civil and military officials working in India, interests on loans taken by the Indian government, profits of the British capitalists in India and the home charges or expenses of the Indian Government in Britain.
This drain took the form of an excess of exports over the imports for which India got no economic or national return. According to the nationalist calculations, this chain amounted to one-half of the government revenues more than the entire land revenue collection and over one-third of India’s total savings.
The acknowledged high priest drain theory was Dadabhai Naroji. It was in May 1867 that Dadabhai Naroji put forward the idea that Britain was draining and bleeding India. From then on for nearly half a century he launched a raging campaign against the drain, hammering at the theme through every possible form of public communication. R.C. Dutt made the drain the major theme of his Economic History of India.
He protested that taxation raised by a king is like the moisture sucked up by the sun, to be returned to earth as fertilizing rain, but the moisture raised from the Indian soil now descends as fertilizing rain largely on other lands, not on India.
The drain theory incorporated all the threads of the nationalist critique of colonialism, for the drain denuded India of the productive capital its agriculture and industries so desperately needed. Indeed the drain theory was comprehensive, inter-related and integrated economic analysis of the colonial situation.
The drain theory had far reaching impact on the growth of the economic nationalism in India. Banking on this theory the early nationalists attributed the all- encompassing poverty not as a visitation from God or nature. It was seen as man-made, and therefore capable of being explained and removed.
In course of their search for the causes of India’s poverty, the nationalists underlined factors and forces which had been brought into play by colonial rulers and the colonial structure. The problem of poverty was seen as the problem of increasing the productive capacity and energy of the people. This approach made poverty a broad national issue and helped to unite, instead of divide different regions and sections of Indian society.
Based on the drain theory of Dadabhai Naroji, the nationalists came to see the foreign capital in perilous terms. They came to regard foreign capital as an unmitigated evil, which did not develop a country but exploited and impoverished it. Dadabhai Naroji saw foreign capital to be representing despoliation and exploitation of Indian resources. It was described as the system of international depredation.
It was further argued that instead of encouraging and augmenting Indian capital, foreign capital replaced and suppressed it, led to the drain of capital from India and further strengthened the British hold over Indian economy. To try to develop a country through foreign capital was to barter the entire future for the petty gains of today.
According to them, the political consequences of foreign capital investment were no less harmful for the penetration of foreign capital led to its political subjugation. Foreign capital investment created vested interests which demanded security for investors and therefore perpetuated foreign rule.
The drain by taking form of excess of exports over imports, led to progressive decline and ruin of India’s traditional handicrafts. The British administrators pointed with pride to the rapid growth of India’s foreign trade and rapid construction of railways as instruments of India’s development as well as proof of its growing prosperity.
However, because of their negative impact on indigenous industries, foreign trade and railways represented not economic development but colonization and under development of economy. What mattered in case of foreign trade was not its volume but its pattern or nature of goods internationally exchanged and their impact on national industry and agriculture. And this pattern had undergone drastic changes during the 19thcentury, the bias being overwhelmingly towards the export of raw materials and the import of manufactured goods.
According to early nationalists, drain constituted a major obstacle to rapid industrialization especially when it was in terms of policy of free trade.
Of all the national movements in colonial countries, the Indian national movement was the most deeply and firmly rooted in an understanding of the nature and character of colonial economic domination and exploitation.
Its early leaders, known as the moderates were the first in the 19th century to develop an economic critique of colonialism.
The focal point of the nationalist critique of colonialism was the drain theory. The nationalist leaders pointed out that a large part of India’s capital and wealth was being transferred or drained to Britain in the form of salaries and pensions of British civil and military officials working in India, interests on loans taken by the Indian government, profits of the British capitalists in India and the home charges or expenses of the Indian Government in Britain.
This drain took the form of an excess of exports over the imports for which India got no economic or national return. According to the nationalist calculations, this chain amounted to one-half of the government revenues more than the entire land revenue collection and over one-third of India’s total savings.
The acknowledged high priest drain theory was Dadabhai Naroji. It was in May 1867 that Dadabhai Naroji put forward the idea that Britain was draining and bleeding India. From then on for nearly half a century he launched a raging campaign against the drain, hammering at the theme through every possible form of public communication. R.C. Dutt made the drain the major theme of his Economic History of India.
He protested that taxation raised by a king is like the moisture sucked up by the sun, to be returned to earth as fertilizing rain, but the moisture raised from the Indian soil now descends as fertilizing rain largely on other lands, not on India.
The drain theory incorporated all the threads of the nationalist critique of colonialism, for the drain denuded India of the productive capital its agriculture and industries so desperately needed. Indeed the drain theory was comprehensive, inter-related and integrated economic analysis of the colonial situation.
The drain theory had far reaching impact on the growth of the economic nationalism in India. Banking on this theory the early nationalists attributed the all- encompassing poverty not as a visitation from God or nature. It was seen as man-made, and therefore capable of being explained and removed.
In course of their search for the causes of India’s poverty, the nationalists underlined factors and forces which had been brought into play by colonial rulers and the colonial structure. The problem of poverty was seen as the problem of increasing the productive capacity and energy of the people. This approach made poverty a broad national issue and helped to unite, instead of divide different regions and sections of Indian society.
Based on the drain theory of Dadabhai Naroji, the nationalists came to see the foreign capital in perilous terms. They came to regard foreign capital as an unmitigated evil, which did not develop a country but exploited and impoverished it. Dadabhai Naroji saw foreign capital to be representing despoliation and exploitation of Indian resources. It was described as the system of international depredation.
It was further argued that instead of encouraging and augmenting Indian capital, foreign capital replaced and suppressed it, led to the drain of capital from India and further strengthened the British hold over Indian economy. To try to develop a country through foreign capital was to barter the entire future for the petty gains of today.
According to them, the political consequences of foreign capital investment were no less harmful for the penetration of foreign capital led to its political subjugation. Foreign capital investment created vested interests which demanded security for investors and therefore perpetuated foreign rule.
The drain by taking form of excess of exports over imports, led to progressive decline and ruin of India’s traditional handicrafts. The British administrators pointed with pride to the rapid growth of India’s foreign trade and rapid construction of railways as instruments of India’s development as well as proof of its growing prosperity.
However, because of their negative impact on indigenous industries, foreign trade and railways represented not economic development but colonization and under development of economy. What mattered in case of foreign trade was not its volume but its pattern or nature of goods internationally exchanged and their impact on national industry and agriculture. And this pattern had undergone drastic changes during the 19thcentury, the bias being overwhelmingly towards the export of raw materials and the import of manufactured goods.
According to early nationalists, drain constituted a major obstacle to rapid industrialization especially when it was in terms of policy of free trade.
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