Introduction
The nationalist critique of British colonial economic policy in India was a significant part of the Indian freedom movement. Indian leaders, economists, and intellectuals analyzed and opposed British rule not only on political grounds but also on the basis of its economic impact. They argued that British policies systematically impoverished India, deindustrialized its economy, drained its wealth, and created structural imbalances that hindered development.
The Drain of Wealth Theory
One of the most prominent components of the nationalist critique was the “Drain of Wealth” theory. Dada Bhai Naoroji, in his book Poverty and Un-British Rule in India, highlighted how India’s wealth was being transferred to Britain without any equivalent return. This included payments for salaries, pensions, profits, and interest on loans taken by the British government, which were mostly remitted to England.
Key Aspects of the Drain:
- Home charges and remittances by British officials
- Expenditure on British troops stationed in India
- Profits earned by British capitalists
- Purchasing of British goods by Indian consumers
Deindustrialization
Another critical point of the nationalist critique was the deliberate destruction of India’s indigenous industries, especially textiles. Before colonial rule, India had a flourishing handloom industry. With the import of cheap British machine-made goods and the imposition of heavy duties on Indian exports, the local industries could not compete and collapsed.
This led to mass unemployment and the decline of skilled artisan communities. Gandhi famously took up the spinning wheel (charkha) as a symbol of resistance against British economic exploitation and as a step towards self-reliance.
Land Revenue Policies
The land revenue systems introduced by the British (Zamindari, Ryotwari, and Mahalwari) were criticized for being exploitative. High taxes, irrespective of crop failures, led to indebtedness and impoverishment of the peasantry. Land became a commodity, and the traditional bond between the farmer and the soil was broken.
Neglect of Agriculture and Rural Economy
India remained a primarily agrarian economy, but agriculture received little attention in terms of investment or reform. There were no efforts to modernize farming practices, provide irrigation, or ensure credit. Famines were frequent and devastating, and the colonial government’s response was often inadequate.
Monetary and Trade Policies
British policies turned India into a raw material supplier and a market for British finished goods. The British manipulated India’s currency and trade policies to benefit their own industries. The lack of protective tariffs for Indian products further harmed indigenous entrepreneurs.
Emergence of Nationalist Economists
Indian thinkers like R.C. Dutt, Gopal Krishna Gokhale, and later Jawaharlal Nehru and Subhas Chandra Bose expanded the economic critique. They called for economic self-reliance, industrialization, land reforms, and development planning. Gandhi’s approach was distinct but complemented the broader economic critique with an ethical and village-centric vision.
Impact on the Freedom Movement
The nationalist economic critique helped unite Indians across classes. It created awareness about the exploitative nature of British rule and provided a strong intellectual foundation for the call for Swaraj (self-rule). The boycott of British goods, promotion of khadi, and support for swadeshi industries were all direct outcomes of this economic awakening.
Conclusion
The nationalist critique of British colonial economic policy was not merely academic—it was rooted in the lived experiences of Indian farmers, workers, and artisans. It exposed the structural exploitation inherent in colonial rule and inspired practical measures for self-reliance, resistance, and economic justice. This critique laid the foundation for post-independence economic planning and policies aimed at reversing the colonial legacy.