Indian Economy and Policy

                Indian Economy and Policy

                Essay I: Should there be reparations by Britain to India or not?

Colonialism, without a doubt, is an awful chapter in human history. In 1858, British Crown rule was established in India, ending a century of control by the East India Company. The life and death struggle that preceded this formalization of British control lasted nearly two years, cost £36 million, and is variously referred to as the 'Great Rebellion', the 'Indian Mutiny' or the 'First War of Indian Independence'.

Decline of economy of India began soon after the success of Industrial Revolution in England. This impact started to be felt, as British factories were kept busy at the expense of Indian cottage industry. All Indian produced goods were heavily taxed. Indian GDP fell from 23% of world when British arrived to <4% when they left.

India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. Other local industries also suffered some decline, and India underwent secular de-industrialization as a consequence. The driver of de-industrialization was the British victory in foreign markets for cottage-made manufactures, followed later by its penetration of the Indian home market with cheap factory-produced manufactures. Due to the decline of trade barriers between India and her foreign markets, especially Britain and especially that induced by the transport revolution the relative supply price of manufactures in India was driven down still further, and it was driven down even more compared with Indian exports, since overseas transport improvements served to raise export prices in the home market.

Winston Churchill did play a supportive role in the worsening of situation during the famine of Bengal in 1943. Although the initial factors that lead to the famine were more local and related to local governance, hoarding and crop failure, but even at the peak of the famine no corrective measures were taken by the British government in this regard. Winston Churchill had decided, No additional food grains were to be transported into the region as it was being diverted to the British troops fighting on war front and even to other countries like Greece which was having its own famine during that period.

After the British left India, the Indian government opposed trading activities and nationalized several industries in order to align itself with socialist principles. When the British left in 1947, it had 350 million souls and an economy of $55 Billion. Famines visited often in the country. British always blamed it on the inept Indians. British never wished to be reminded that India’s predicament was their creation and if they are rich, it is all India’s money they have.

The British are often criticized for leaving Indians poorer and more prone to devastating famines; exhorting high taxation in cash from an impecunious people. For destabilizing cropping patterns by forced commercial cropping; draining Indian revenues to pay for an expensive bureaucracy (including in London) and an army beyond India's own defense needs. Also British were in servicing a huge sterling debt, not ensuring that the returns from capital investment were reinvested to develop the Indian economy rather than reimbursed to London; and retaining the levers of economic power in British hands.