Arora IAS Short Notes

India Struggle for Independence(1857-1947) Notes

Revision Notes or Short Notes



Indian National Movement: Economic Critique of Colonialism



  • Indian national movement uniquely focused on economic exploitation by British rule.
  • Early 19th century Indian intellectuals initially supported British rule for modernization.
  • Disillusionment set in after 1860 due to lack of progress and development.

Key Figures (1870-1905):

  • Dadabhai Naoroji (Grand Old Man of India): Analyzed drain of wealth from India.
  • Mahadev Govind Ranade: Advocated for modern industrial development.
  • Romesh Chandra Dutt: Published “The Economic History of India” critiquing colonial rule.

Main Arguments:

  • British rule hindered India’s economic development.
  • Colonialism subordinated the Indian economy to the British economy.
  • British policies aimed at:
    • Extracting raw materials from India.
    • Providing a market for British goods.
    • Attracting British investments.


  • Analyzed and exposed colonial economic policies.
  • Advocated for an independent Indian economy.
  • Used powerful language to raise awareness.

Overall Significance:

  • Early nationalists laid the foundation for future nationalist agitation.
  • Highlighted the economic exploitation at the heart of colonialism.



Indian Nationalist View on Poverty and Development


Poverty as a National Issue:

  • Dadabhai Naoroji highlighted India’s worsening poverty.
  • Early nationalists saw poverty as man-made, not inevitable.
  • C. Dutt: “India’s poverty is due to economic causes, not nature.”

Causes of Poverty (blamed on colonialism):

  • Colonial policies and structure.

Solution: National Development

  • Focus on increasing people’s “productive capacity and energy.”
  • Aim: Rapid development of modern industry.

Importance of Industrialization:

  • Seen as key to economic transformation and national development.
  • V. Joshi: “Industrialism represents a superior civilization.”
  • Ranade: “Factories can give a new birth to the Nation.”
  • Unites diverse populations through shared interests (Surendranath Banerjea).

Industry as the Foundation:

  • All economic policies viewed through the lens of industrialization.
  • Foreign trade, railways, tariffs, currency, finance, and labor laws seen as tools for industrial growth.



Early Indian Nationalists: Views on Foreign Capital


Disagreement with British Viewpoint:

  • British officials like John Stuart Mill and Lord Curzon saw foreign capital as key to India’s development.

Nationalist Opposition:

  • Dadabhai Naoroji: Foreign capital led to “despoilation” and “exploitation” of India.
  • Indian nationalists saw foreign capital as:
    • Hindrance to Indian capital growth.
    • Cause of capital drain from India.
    • Strengthening British economic control.
    • Political danger leading to subjugation.
  • Bipin Chandra Pal (1901): Foreign capital a “two-edged evil” harming both economy and politics.

Nationalist Argument:

  • Genuine development required Indian capital to lead industrialization.
  • Foreign capital wouldn’t fulfill this task.

Political Concerns:

  • Foreign capital investment seen as leading to political subjugation.
  • Nationalists feared foreign capitalists would demand security through continued British rule (quoted from The Hindu, 1889).



Early Nationalists’ Critique of British Economic Policies


Decline of Handicrafts:

  • Nationalists blamed British policies for destroying traditional Indian industries.
  • British focus was on promoting their own manufactured goods.

Foreign Trade and Railways:

  • Nationalists argued these did not signify development.
  • Foreign trade favored export of raw materials and import of British goods, harming Indian industries.
  • Railways primarily benefited British industry by facilitating import of goods.
  • V. Joshi: Railway expenditure – “Indian subsidy to British industries.”

Free Trade Policy:

  • Seen as unfair competition for nascent Indian industries against established British ones.
  • Tariff policies favored British interests.

Colonial Finance:

  • Nationalists criticized high taxes on poor and neglect of development spending.
  • Demanded:
    • Reduction of land revenue.
    • Abolition of salt tax.
    • Income tax and import duties.
  • High military expenditure seen as serving British imperial needs, not India’s.



The Drain Theory: Core of Nationalist Economic Critique


  • Wealth transfer from India to Britain (salaries, pensions, loans, profits, government expenses).
  • Drain took form of excess exports with no return benefit.
  • Estimated drain: half of government revenue, more than land revenue, over a third of savings (8% of national income today).

Key Figure:

  • Dadabhai Naoroji (1867): “Britain is draining and bleeding India.”
  • Launched a lifelong campaign against the drain.
  • Believed the drain was the root cause of India’s poverty.

Other Nationalist Voices:

  • C. Dutt: Drain as central theme of “Economic History of India.”
  • Compared drain to “fertilizing rain” enriching other lands, not India.
  • Drain seen as impoverishing India and causing famines.

Significance of the Drain Theory:

  • Explained how colonialism exploited India’s resources.
  • Exposed the economic core of British imperialism.
  • Easily understood concept for the masses (drain of money similar to peasant experiences).
  • Powerful political slogan (“No Drain”).
  • Highlighted the fundamental contradiction between India and British rule.
  • Became a major theme of nationalist agitation (especially during Gandhi era).



Nationalistic Economic Agitation: Weakening Colonial Legitimacy


Colonial Power Relied on:

  • Moral authority and public belief in its benevolent character.
  • Belief that British rule benefitted India (e.g., “benefits of British rule” in textbooks).

Nationalist Economic Argument:

  • British rule caused India’s poverty, not prosperity. (e.g., Tilak’s Kesari: “India…a vast pasture for the Europeans to feed upon.”).
  • British economic policies prioritized British interests, not India’s. (e.g., P. Ananda Charlu: “India is defenceless…where the very fence begins to feed on the crop.”).
  • Sachidanand Sinha: British administration served “the task of exploitation.”

Dadabhai Naoroji’s Critique:

  • British rule exploited India under a “face of beneficence.”
  • “The romance is the beneficence…the reality is the ‘bleeding’ of the British Rule.”
  • Claimed security under British rule was a myth. (e.g., “There is no security of property at all…life is simply ‘halffeeding,’ or starvation…”)
  • Law and order came at the cost of economic drain. (“There is an Indian saying: ‘Pray strike on the back, but don’t strike on the belly.'”)



Economic Agitation and Rise of Political Nationalism in India


Erosion of Faith in British Rule:

  • Nationalists linked economic issues with India’s political status.
  • British administration seen as prioritizing exploitation, not Indian development.
  • This led to questioning of British rule’s legitimacy.

Seeds of Discontent and Self-Government Demands:

  • Early nationalists, despite moderation, sowed seeds of disloyalty.
  • 1875-1905: Period of intellectual unrest and growing national consciousness.
  • By 1905, self-government demands became prominent.
  • Dadabhai Naoroji: Advocated for “selfgovernment” and treatment like other British colonies.
  • 1906: “Selfgovernment or Swaraj” declared as the national movement’s goal.

Foundation of Indian Nationalism:

  • Based on a “brilliant scientific analysis” of colonial economics.
  • Highlighted contradiction between Indian interests and British rule.
  • This critique became a core theme for later nationalists (Gandhi era).



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