why was the trade surplus not utilised for growth and development of india during the british rule?
Answers
Explanation:
The Indian economy under the British Raj describes the economy of India during the years of the British Raj, from 1858 to 1947. According to historical GDP estimates by economist Angus Maddison, India's GDP during the British Raj grew in absolute terms but declined in relative share to the world.[1]
From 1850 to 1947 India's GDP in 1990 international dollars grew from $125.7 billion to $213.7 billion, a 70% increase or an average annual growth rate of 0.55%. This was a higher rate of growth than during the Mughal era from 1600 to 1700 where it had grown by 22%, an annual growth rate of 0.20%. Or the longer period of mostly British East Indian company rule from 1700 to 1850 where it grown 39% or 0.22% annually.[1] However since the industrial revolution the global economy had been growing at a significantly faster rate, with most growth occurring in Western countries in what's known as the Great Divergence. By the end of British rule India's economy represented a smaller proportion of global GDP. In 1820 India's GDP was 16% of the world total, by 1870 it had fallen to 12% and by 1947 had fallen further to 4%. India's per-capita income remained mostly stagnant during the Raj, with most of its GDP growth coming from an expanding population. From 1850 to 1947 India's GDP per capita had grown only slightly by 16%, from $533 to $618 in 1990 international dollars.
The trade surplus was not utilized for growth and development of India during the British rule since they were majorly dependent on the policies of the British. India was only supplying raw materials to the British. The Indian market could not keep pace with cheap machine made goods from industries in Britain
Explanation:
- The British policies ruined the trading benefits of the country. The British diverted the major part of Indian trading for their own advantage. Therefore India was unable to trade with other countries because of the policies introduced by the British.
- Most of the trading was restricted to sending the products to Britain. India was brought down to become a supplier raw materials like cotton, Indigo, jute, sugar and more to Britain. There were cheap machine made goods imported in the country made by the factories in Britain
- Most of the resources in country was being utilized for producing items for export to Britain. There was a lot export surplus during the rule of the British but it was never utilized for the Indian markets. It was mainly used for expenditure on the British army and for making other payments to the British.
To know more about trading in India during British rule
Why did India's foreign trade decline during the British rule?
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