COLONIAL RULE AND ITS EFFECTS ON INDIA’S RURAL ECONOMY

Abstract

India was an economic superpower for over 1500 years, contributing between 25% to 30 % of the world’s GDP but productivity remained at stagnant levels due to poor education levels and lack of technology and from 1600, India’s contribution to the world GDP started declining. During Mughal rule, India had a very rich economy with the largest standing army in the world and the Mughal rulers ware perceived to be fabulously wealthy but with British colonial rule, India’s agricultural production became plantation-oriented and commercial in nature while the traditional handicrafts and handlooms industry declined. From a major textile producing country India now became a supplier of raw cotton and  opium, indigo, tea, coffee, cotton, spices and other commodities became the major exports. The Indian rural economy which had monopolized fine muslin cloth production over 1500 years, deteriorated and India was forced to import cheap Manchester mill-produced cloth. While per capita GDP rose slowly over 500 years, the industrialized nations became wealthy due to slaves, modern technology and colonialism. India’s population grew sharply while the share of India in the World’s GDP fell appreciably. The British built major irrigation systems in India to stave off periodic starvation and to ensure the movement of export commodities, built up the road and rail facilities and also the postal and telegraph facilities for faster troop movements, after 1857. Famines were reduced but the basic structure of the India rural economy had been irreversibly broken and the peasants became poorer due to the rapid de-industrialization of India and lower land revenues did not help. As a colonial super-power, the British ensured that all changes enhanced their trade interests and colonial exploitation of India’s resources and eventually succeeded in pauperizing India. The South Asian economies have yet to recover from the effects of colonial rule and need to make massive changes to counter the baneful effects of colonial rule on their rural economies.