Model Answer
0 min readIntroduction
Dadabhai Naoroji, often called the ‘Grand Old Man of India’, was a prominent Indian nationalist and economist. His seminal work, *Poverty and Un-British Rule in India* (1901), introduced the concept of ‘Economic Drain’ – the systematic transfer of wealth from India to Britain during the period of colonial rule. This drain, according to Naoroji, was a primary cause of India’s poverty and underdevelopment. He meticulously calculated this drain, arguing it far exceeded the costs of administering India, and significantly hampered its economic progress.
Items of Economic Drain as conceived by Dadabhai Naoroji
Naoroji identified several key categories contributing to the ‘Economic Drain’ from India to Britain. These can be broadly classified as follows:
1. Home Charges
- These were payments made by the Indian government to Britain for services rendered, including administrative costs, debt charges, and pensions.
- Naoroji argued that a significant portion of these charges were excessive and unnecessary, representing a direct outflow of wealth.
- Included salaries of British officials serving in India, and interest payments on India’s public debt held in Britain.
2. Military Expenditure
- A substantial portion of India’s revenue was allocated to maintaining a large British army, primarily for protecting British interests, not necessarily India’s.
- The cost of this army, including salaries, supplies, and infrastructure, was largely borne by Indian taxpayers and represented a significant drain.
3. Debt Charges
- India accumulated a large public debt, much of which was held by British investors.
- The interest payments on this debt constituted a major outflow of wealth.
- Naoroji pointed out that these debts were often incurred for wars and projects that primarily benefited Britain.
4. Drain of Surplus Revenue
- Any surplus revenue generated in India, after covering administrative and military expenses, was remitted to Britain.
- This surplus, which could have been invested in India’s development, was instead used to finance British industries and infrastructure.
5. Profits of British Companies
- British companies operating in India generated substantial profits, which were largely repatriated to Britain.
- This included profits from trade, railways, plantations, and other industries.
6. Remittances by British Officials and Private Individuals
- British officials and private individuals stationed in India sent a significant amount of money back to Britain.
- This represented a further outflow of wealth from India.
Naoroji used a ‘difference method’ to calculate the drain, comparing India’s income and expenditure. He argued that the annual drain amounted to approximately £350 million (as of 1901), a substantial sum that significantly contributed to India’s poverty.
Conclusion
Dadabhai Naoroji’s concept of ‘Economic Drain’ was a powerful critique of British colonial rule. By meticulously identifying and quantifying the various ways in which wealth was systematically transferred from India to Britain, he exposed the exploitative nature of the colonial economy. His work laid the foundation for subsequent analyses of colonial economic policies and remains a crucial contribution to understanding India’s economic history and its enduring legacy of underdevelopment.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.