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Impact of British Rule on Indian Economy

The Industrial Revolution has helped the English merchants accumulate a lot of capital from the countries of Asia, Africa and America. They now wanted to invest this wealth in setting up industries and trade with India. With this India became an economic colony of Industrial England.

Commercialization of Agriculture

Permanent Settlement

• Lord Cornwallis introduced the Permanent Land Revenue Settlement of Bengal, which was extended to the provinces of Bihar and Orissa.

Under Permanent Settlement, annual lease system was abol ished, and a decennial (Ten years) system was

• Following were the features of permanent settlement —
• The zamindars of Bengal were recognised as the owners of land as long as they paid the revenue to the East India Company regularly.
• The amount of revenue that the zamindars had to pay to the Company was firmly fixed, and would not be raised under any circumstances.
• The Ryots became tenants since they were considered the tillers of the soil.
• This settlement took away the administrative and judicial functions of the zamindars.
• The rich zamindars who led luxurious lives left their villages and migrated into towns. They entrusted their rent collection to agents who exacted all kinds of illegal taxes besides the legal ones from the ryots.
• This resulted in a great deal of misery amongst the peas ants and farmers whereas this system proved to be a great boon to the zamindars and to the government of Bengal. It formed a regular income and stabilised the government of the Company.

Ryotwari Settlement

• The Ryotwari settlement was introduced mainly in Madras, Berar, Bombay and Assam. Sir Thomas Munro introduced this system in the Madras Presidency.
• Under this settlement, the peasant was recognised as the proprietor of land. There was no intermediary like a Zamindar between the peasant and the government.

Mahalwari Settlement

The Mahalwari settlement was introduced in the Punjab in 1833 the Central Provinces and parts of North Western Provinces. Under this system the basic unit of revenue set tlement was the village or the Mahal.

• As the village lands belonged jointly to the village commu nity, the responsibility of paying the revenue rested with the entire Mahal or the village community. So the entire land of the village was measured at the time of fixing the revenue.

Deindustrialization

• The textiles were the most important Indian industries. Its cotton, silk and woollen products were sought after all over the world.,
• Particularly, the muslin of Dacca, carpets of Lahore, shawls of Kashmir, and the embroidery works of Banaras were very famous. Ivory goods, wood works, and jewellery were other widely sought-after Indian commodities.
• Besides textiles, India was also known widely for its ship ping, leather and metal industries. Making of gold, silver and diamond jewellery was another important industrial activity in which many places in India specialized.
• British Policy to systematically dismantle Indian handicraft industry had following features —
• The Indian market was flooded with the cheap finished goods from Britain. It resulted in a steep decline in the sale of Indian products both within and outside of the country.
• Strategies were devised by the Company to enhance the consumption of finished goods from Britain. In this respect the tariff and octroi policies were suitably modified to suit the British commercial interests. For instance, high import duty in England and low export duty (duty-free english products at times) in India.

The Industrial Revolution led to the invention of new machinery in Europe which speeded the production of finished goods. Thus, Indian goods suffered from lack of production of scale.