By the end of the nineteenth century, India was Britain’s biggest source of revenue, the world’s biggest purchaser of British exports and the source of highly paid employment for British civil servants and soldiers all at India’s own expense. We literally paid for our own oppression.
Taxation remained onerous. Agricultural taxes amounted at a minimum to half the gross produce and often more, leaving the cultivator less food than he needed to support himself and his family; British estimates conceded that taxation was two or three times higher than it had ever been under non-British rule, and unarguably higher than in any other country in the world. Each of the British ‘presidencies’ remitted vast sums of ‘savings’ to England, as of course did English civil servants, merchants and soldiers employed in India. (After a mere twenty-four years of service, punctuated by and including four years of ‘home leave’ furloughs, the British civil servant was entitled to retire at home on a generous pension paid for by Indian taxpayers: Ramsay MacDonald estimated in the late 1920s that some 7,500 Englishmen were receiving some twenty million pounds annually from India as pension.)
While British revenues soared, the national debt of India multiplied exponentially. Half of India’s revenues went out of India, mainly to England. Indian taxes paid not only for the British Indian Army in India, which was ostensibly maintaining India’s security, but also for a wide variety of foreign colonial expeditions in furtherance of the greater glory of the British empire, from Burma to Mesopotamia. In 1922, for instance, 64 per cent of the total revenue of the Government of India was devoted to paying for British Indian troops despatched abroad. No other army in the world, as Durant observed at the time, consumed so large a proportion of public revenues.
It is striking how brazenly funds were siphoned off from India. Even accounting tables were subject to completely euphemistic entries to mask extraction: thus while trade figures showed a significant surplus, the subtraction of vast amounts under the headings ‘Home Charges’ and ‘Other Invisibles’ [sic] gave India a huge net deficit. Paul Baran calculated that 8 per cent of India’s GNP was transferred to Britain each year.* No wonder the nineteenth-century Indian nationalist Dadabhai Naoroji found evidence even in the published accounts of the British empire to evolve his ‘drain theory’ of extraction and indict the colonialists for creating poverty in India through what he diplomatically termed their ‘un-British’ practices. Naoroji argued that India had exported an average of £13,000,000 worth of goods to Britain each year from 1835 to 1872 with no corresponding return of money; in fact, payments to people residing in Britain, whether profits to Company shareholders, dividends to railway investors or pensions to retired officials, made up a loss of £30 million a year. What little investment came from Britain served only imperial interests. India was ‘depleted’, ‘exhausted’ and ‘bled’ by this drain of resources, which made it vulnerable to famine, poverty and suffering. The extensive and detailed calculations of William Digby, the British writer, pointed to the diminishing prosperity of the Indian people and the systematic expropriation of India’s wealth by Britain— including the telling fact that the salary of the Secretary of State for India in 1901, paid for by Indian taxes, was equivalent to the average annual income of 90,000 Indians.
*This dubious distinction has now been inherited by the Pakistan Army, which today consumes a greater proportion of national resources than any army in the world. Perhaps some Pakistanis can blame this on the British legacy!
Angus Maddison concluded clearly: ‘There can be no denial that there was a substantial outflow which lasted for 190 years. If these funds had been invested in India they could have made a significant contribution to raising income levels.’ Official transfers and private remittances to the UK from Indian earnings were compounded by excessively high salaries for British officials. It did not help, of course, that the British Raj was a regime of expatriates, whose financial interests lay in England. In the past, and had an Indian administration been in power, income from government service would have been saved and spent locally; instead it all went to foreigners, who in turn sent it abroad, where their real interests lay. In most societies, the income of the overlords is an important source of economic development since it puts purchasing power into the hands of people who can spend it for the local good and indirectly promote local industry. But the lavish salaries and allowances of the Government of India were being paid to people with commitments in England and a taste for foreign goods in India. This increased imports of British consumer items and deeply damaged the local industries that had previously catered to the Indian aristocracy—luxury goods makers, handicraftsmen, fine silk and muslin weavers, who found limited or no taste for their offerings among the burra sahibs (and especially their prissy English memsahibs).
In 1901, William Digby calculated the net amount extracted by the economic drain in the nineteenth century, with remarkable (and inevitably, bitterly contested) precision, at £4,187,922,732. While that would amount, in today’s money, to about a ninth of Minhaz Merchant’s calculations, it only accounted for the nineteenth century. Worse was to follow in the twentieth.
A small digression is in place here. That India contributed such a significant amount to Britain’s imperial expansion can be seen from the frequency with which troops were dispatched overseas for wars which had nothing to do with India and everything to do with protecting or expanding British interests. And all this was accomplished by Indian funds, especially land revenue wrested from the labour of the wretched peasantry or collected from various princely states through ‘subsidiary alliances’.
Excerpted from ‘An Era of Darkness: The British Empire in India’ written by Shashi Tharoor, published by Aleph Book Company.
An Era of Darkness: The British Empire in India originated from a speech made by Shashi Tharoor at the Oxford Union in 2015, that went viral across digital platforms clocking 3.5 million hits.
In this explosive book, the author reveals with acuity, impeccable research, and trademark wit, just how disastrous British rule was for India. Besides examining the many ways in which the colonizers exploited India, ranging from the drain of national resources to Britain, the destruction of the Indian textile, steel-making and shipping industries, and the negative transformation of agriculture, he demolishes the arguments of Western and Indian apologists for Empire on the supposed benefits of British rule, including democracy and political freedom, the rule of law, and the railways. The few unarguable benefits—the English language, tea, and cricket—were never actually intended for the benefit of the colonized but introduced to serve the interests of the colonizers. Aleph Book Company will serve to correct many misconceptions about one of the most contested periods of Indian history.
About the Author:
Shashi Tharoor is the bestselling author of fifteen previous books, both fiction and non-fiction, besides being a noted critic and columnist. His books include the path-breaking satire The Great Indian Novel (1989), the classic India: From Midnight to the Millennium (1997), and most recently, India Shastra: Reflections on the Nation in Our Time (2015). He was a former Under Secretary-General of the United Nations and a former Minister of State for Human Resource Development and Minister of State for External Affairs in the Government of India. He is a two-time member of the Lok Sabha from Thiruvananthapuram and chairs Parliament’s External Affairs Committee. He has won numerous literary awards, including a Commonwealth Writers’ Prize, and was honoured as New Age Politician of the Year (2010) by NDTV. He was awarded the Pravasi Bharatiya Samman, India’s highest honour for overseas Indians.