Sunday, July 22, 2012

Industrial Revolution in England and the Financial Phase

Revolution in England big manufacturing industries were established, in Britain. As a result of the Industrial raw material in large quantity/volume and wanted the colonies to act as the supplier of raw materials. The industries produced goods on a  large scale and wanted to expand their market so as to earn profit. The colonies where the Company already enjoyed monopoly over the trade were best suited for both as supplier of raw material and market for finished goods.

The industrial revolution brought new kind of colonial exploitation. The partisan implementation of free trade policy served two purposes. On the one hand it restricted the imports of the Indian cotton textiles in England and on the other hand the exports of British goods to India increased. The exploitation of Indian by the British industrial capital in the 19th century brought drastic change in the nature of the Indian economy. The isolation of self-sufficient villages ended and with it the old form of economy disintegrated. In the urban areas, the process of De-industrialization was more or less complete. The earlier balance which existed between agriculture and industry in this country during the pre-British period was also lost.

To protect the industrial interests of Britain, the Government imposed heavy import duty on Indian goods. In 1842, import duty on Indian coarse cotton textile was 18% and on Indian muslin was 37.5%. However, the British exports to India were kept duty tree. This policy of the British government harmed the commercial interests of India.Industrial Revolution in England and the Financial Phase

In fact the British capitalists were not interested in establishing manufacturing units in India, However, the decision of establishment of jute industries and other plantation crop like tea, coffee and indigo etc. were taken under compulsion and driven by the motive too make maximum profit. They were mostly controlled by the Europeans.

THE FINANCIAL CAPITAL PHASE


This phase saw the period of massive investments of the British capital in India. Most of the capital was plundered from India. It was now being invested in India because the British economy had reached saturation point as far as investment in Britain was concerned. In fact it was venturing for new destinations and colonies suited them for investment since they could dictate terms and conditions. Almost 97% of the capital invested in India in the early years of the twentieth century was devoted to purposes auxiliary to the commercial penetration of India and was, in no way connected with its industrialization.

Some expenditure, which had little connection with India, was also charged to the Indian Account. These expenditures were treated as loans granted to India. The expenses of wars in China and Abyssinia were all charged to the Indian treasury.

For the construction of railways, capital goods were imported from Britain. Under the system the guaranteed rate of interest varied from 4.5 to 5 percent. In 1882, the new guarantee system had brought down the rate of interest to 3.5 percent. British private capital was also introduced in tramways, mining, oil, banking and finance, and rubber, match box, paper, engineering and sugar industries.


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