Explain the economic critique offered by the early Nationalists to challenge British imperialism and its impact. (15 marks)



  • Introduce with British justification of colonisation and how early nationalists wanted to bust it
  • Explain various economics arguments given by early leaders like drain of wealth, against military expenditure etc.
  • Discuss its impact in the short term and long term
  • Conclude appropriately
Model Answer :

The British provided a moral argument for India’s colonisation by linking it to White Man’s burden to develop and modernise India. However, moderate leaders like Dada BhaiNaoroji, RC Dutt, MG Ranade etc. gave strong economic arguments to show that British imperialism was only benefiting Britain at the cost of India’s exploitation.

The various economic critiques offered were:

  • Drain of wealth theory: It was the key theme of economic nationalism. The early leaders argued that home charges like payment of salaries and pensions of officers situated in London, guaranteed interest payment on British investments like railways were leading to impoverishment of India. Naoroji calculated it to be 12 million pound sterling per year.
  • Free trade and foreign capital investment: In absence of any protective tariff, India turned into a supplier of agricultural goods and a market for British finished products. This led to “de-industrialisation of India” and India became a dependent agrarian economy.
  • High land revenue: Early nationalist leaders contended that in practice the land revenue was as high as 50 to 60 % which led to land alienation, impoverishment of peasantry and recurring famines.
  • Military Expenditure: Indian army was used in imperial wars in all parts of the world, the cost if which was borne from India. Moderates therefore demanded the military expenditure to be shared evenly by the British government.

With these arguments DadabhaiNaoroji calculated that per capita income of Indians in 1890s to be Rs 20 and he linked this abject poverty to the economic exploitation by British.

Impact of Economic critique

In the short term, moderates could not make much impact but a few areas of success were:

  • The British government agreed to share a fraction of military expenditure to the extent of 1 million pounds.
  • Scientific assessment of land revenue was recommended in Ryotwari Areas.

However, in the long run, it helped in the following ways:

  • The British lost its moral authority to rule India and Indians were convinced of exploitative nature of their rule. This helped in spread of Nationalism in India.
  • By preparing a logical case of exploitation by British, the moderates demanded more Indian involvement in the management of Indian affairs.
  • The economic critique generated anger and mistrust among Indians against the British rule. This anger then paved way for want of Swaraj by the extremists.

Therefore, despite limited successes in the short run, economic nationalism strengthened the mistrust on the intentions of British and created a fertile ground for national movement to grow and subsequently demand self rule.

Subjects : History Modern