Administrative and Economic Policies Under British Rule

The UPSC NCERT notes on modern history, particularly focusing on the administrative and economic policies under British rule, provide a comprehensive and insightful exploration of India’s past during the colonial era. Aspirants preparing for the Union Public Service Commission (UPSC) examinations can greatly benefit from a nuanced understanding of the administrative structures and economic strategies implemented by the British rulers. These notes delve into the intricate details of how the British transformed the administrative landscape and shaped economic policies, leaving an enduring impact on the socio-economic fabric of India. Through an in-depth analysis of historical events and key policies, these notes aim to equip candidates with the knowledge necessary to navigate the complexities of India’s colonial history, thereby enhancing their preparedness for the competitive UPSC examinations.

Having acquired the vast empire of India, the East India Company had to devise suitable methods of government to control and administer it. The administrative policy of the company underwent frequent changes over a long period of hundred years, however, these changes never lost sight of its main objective to increase the Company’s profit.

Table of Contents

Introduction:

The British rule in India unfolded in two distinct phases: the first, spanning from 1773 to 1857, known as the Company Rule, and the second, from 1857 to 1947, designated as the Crown Rule.
The pivotal year of 1857 marked a transformative shift in British governance in India.

The Revolt of 1857, often referred to as the First War of Independence by V.D. Savarkar, delivered a substantial blow to the British, compelling them to institute profound alterations in their administrative, economic, and social frameworks.

This uprising emerged as a culmination of years of British expansionist policies, economic exploitations, and administrative innovations, adversely impacting all segments of Indian society, thereby inciting a widespread revolt against the ruling government.
The unexpected and formidable nature of the 1857 revolt shook the British authorities, necessitating comprehensive adjustments in the administrative, economic, and social structures of the country.
Although these changes were primarily driven by the British imperial ideology, they inadvertently introduced elements of the modern state into India’s political and administrative systems.

Dual Government of Bengal (AD 1765 1772

The dual governance system established in Bengal from 1765 to 1772, following the Treaty of Allahabad (1765) orchestrated by Robert Clive, marked a significant phase in Indian history.
In this arrangement, the British East India Company wielded actual power, while the responsibility for administration was delegated to the Nawab of Bengal.
Under this dual structure, the British administration assumed control over both the Diwani functions (Revenue and Administration) and the Nizamat functions (Police and Criminal Administration).
The Diwani, involving revenue collection and administration, was acquired from the Mughal emperor, while the Nizamat, comprising police and judicial powers, was obtained from the Nawab of Bengal.
The Company, acting as the diwan, was authorized to collect revenues, and through the nomination of the deputy Subahdargh, it could influence the nizamat.
Two deputy Diwans were appointed for diwani functions—Mohammad Reza Khan for Bengal and Raja Sitah Roy for Bihar. Mohammad Reza Khan also served as the deputy Nizam.
Despite the apparent Indian agency in the administration of Bengal, the actual authority remained with the Company.
This dual government system granted the British a significant advantage—they held power without bearing responsibility. The Nawab and his officials were accountable for administration, yet lacked the authority to execute it. The Nawab, essentially a puppet, operated at the behest of the British Government of India, with the entire Bengal province under their dominion.

Acts and Amendments Under British Rule

During the British Era, several major acts and amendments shaped the governance landscape.

Phase 1 Company Rule (1773 1857)

In the first phase, Company Rule (1773-1857) ensued after the Battle of Buxar in 1764, granting the East India Company the Diwani rights for Bengal, Bihar, and Orissa—the authority to collect revenue.
An annual subsidy was designated to be paid to the Mughal Emperor, Shah Alam II, and an annual pension was allocated for the Nawab of Awadh, Shuja-ud-Daula.
The Company appointed two Indians, Mohammad Reza Khan for Bengal and Raja Shitab Ral for Bihar, as Deputy Diwans.
In 1767, the British made their first attempt to intervene in economic affairs by demanding a 10% share in the plunder, amounting to 4 million pounds annually.
From 1765 to 1772, the dual system of government persisted, where the Company held authority but no responsibility, while its Indian representatives had all the responsibility but no authority.
This period was marked by widespread corruption among Company servants engaging in private trading for personal enrichment, excessive revenue collection, and oppression of the peasantry.
Despite the Company’s bankruptcy, its servants flourished. In response, the British government decided to regulate the Company and introduce some order into its business, leading to a gradual increase in controlling laws.

Regulating Act of 1773:

The Governor of Bengal was designated as the Governor-General for all three Presidencies—Bengal, Madras, and Bombay.
An Executive Council of four members was established to assist the Governor-General in administration.
The Supreme Court at Calcutta was established in 1774, consisting of one Chief Justice and three other judges.
The Court of Directors, the governing body of the Company, had to report on its revenue, civil, and military affairs in India to the British Government.

Amending Act of 1781 (Act of Settlement 1781):

Passed to rectify loopholes in the Regulating Act of 1773, it was also known as the Act of Settlement.
The jurisdiction of the Supreme Court did not extend to the activities of the Governor-General, his Executive Council, and the Company’s servants.
The Supreme Court had to take into account the religious and social customs of Indians when administering the law. The Act specified that appeals from Provincial Courts could be taken to the Governor-General-in-Council instead of the Supreme Court.

Pitts India Act of 1784:

This Act distinguished between the commercial and political functions of the Company.
The Board of Control was established to manage the political affairs of the Company, with the power to oversee political, civil, and military governance as well as revenues in British possessions in India.

The Court of Directors retained control over commercial affairs, establishing a system of Dual Government.

Act of 1786:

Lord Cornwallis, appointed Governor-General of Bengal in 1786, had his demands endorsed by this act.
He sought the power to override decisions of his council and to serve as Commander-in-Chief.

Charter Act of 1793:

The Governor-General of Bengal gained more power over the governments of Bombay and Madras, and the Company’s trade monopoly in India was extended for an additional twenty years.
The Board of Control and its staff were to be funded from Indian revenues.

Charter Act of 1813:

This Act ended the trade monopoly of the East India Company in India and affirmed the sovereignty of the British Crown over the Company’s territories in India.
It allowed for the promotion of Western education in India and permitted the arrival of Christian missionaries.
Local governments were authorized to levy taxes.

Charter Act of 1833:

This act elevated the Governor-General of Bengal to the position of Governor-General of India, endowed with complete civil and military powers. (The first Governor-General of India was Lord William Bentinck).

The Governor-General of India was granted full legislative powers, and the laws produced under this act were referred to as Acts, as opposed to the previous designation of Regulations.The commercial activities of the East India Company were terminated.

A competitive process for the selection of Civil Servants was introduced, allowing Indians to participate without discrimination.

Charter Act of 1853:

The legislative and executive functions of the Governor-General’s Council were separated, leading to the establishment of the Governor-General’s Legislative Council, also known as the Indian Central Legislative Council.
The Macaulay Committee, formed in 1854, was tasked with overseeing the recruitment and selection of Civil Servants.
Local representation in the Central Legislative Council was introduced, appointing four members from the governments of Bengal, Madras, and Agra.

Phase II: Crown Rule (1858-1947)

After the revolt of 1857, significant changes were imperative in the administrative, economic, and social structures.

Government of India Act, 1858:

Prompted by the events of the Revolt of 1857, this act was also recognized as the Act of Good Governance of India.
The act abolished the East India Company, transferring all its powers and possessions to the Crown.
Power was now wielded by the Secretary of State for India, aided by a Council. The Secretary was a member of the British Cabinet, accountable to the British Cabinet.
The system of Dual Government was dismantled by abolishing the Board of Control and the Court of Directors.
The designation of Governor-General of India was changed to Viceroy of India (direct representative of British Crown).
Governor-General was to have an Executive Council member who were to act as heads of different departments and their position was similar to that of Cabinet Ministers.

Indian Councils Act, 1861:

This act expanded the Governor-General’s Council to create the Imperial Legislative Council for legislating.
The Council was authorized to add six to twelve members, with at least half being Indians, although it only acted in an advisory capacity. The Viceroy was empowered to nominate some Indians as non-official members of the expanded council.

In 1862, Lord Canning, then Viceroy, nominated three Indians to his legislative council—the Raja of Banaras, the Maharaja of Patiala, and Sir Dinkar Rao

The act initiated decentralization by restoring legislative powers to the Bombay and Madras Presidencies. New Legislative Councils were established for Bengal, North-Western Provinces, and Punjab in 1862, 1886, and 1897, respectively.

Indian Councils Act, 1892:

This act increased the number of non-official members while maintaining an official majority. It expanded the functions of the Legislative Council, granting it the power to discuss budgets and ask questions to the executive. The act also introduced the system of elections.

Indian Councils Act, 1909 (Morley Minto Reforms):

Known as the Morley Minto Reforms, this act increased the size of both the Central (from 16 to 60) and Provincial Legislative Councils while retaining an official majority in the Central Legislative Council.
The Government of India Act, of 1909, permitted the provincial legislative councils to have a non-official majority while maintaining an official majority in the Central Legislative Council.
For the first time, the act allowed Indians to be associated with the executive councils of the Viceroy and Governors.
Satyendra Prasad Sinha became the first Indian to join the Viceroy’s executive council, serving as the Law Member.

The Indian Councils Act of 1909 introduced communal representation for Muslims, endorsing the concept of a separate electorate. This legalized communalism, leading Lord Minto to be known as the Father of Communal Electorate.

Government of India Act, 1919

Government of India Act, 1919, also known as the Montagu-Chelmsford Reforms, authorized the Central and provincial legislatures to make laws on their respective subjects.
It introduced a dyarchy system at the provincial level, dividing subjects into transferred and reserved categories.
Transferred subjects were administered by the Governor with the aid of Ministers responsible to the legislative council, while reserved subjects were administered by the Governor and his executive council without being responsible to the legislative council.
The act introduced bicameralism and direct elections, replacing the Indian Legislative Council with a Bicameral Legislature consisting of an Upper House (Council of State) and a Lower House (Legislative Assembly).
Central Public Service Commission was established in 1926 to recruit civil servants.

Government of India Act, 1935

The Government of India Act, of 1935, provided for the establishment of an All India Federation with provinces and princely states as units.
It divided powers between the Centre and units based on three lists – a Federal List for central subjects, a Provincial List for provincial subjects, and a Concurrent List for subjects on which both could legislate.
The Government of India Act, 1935, established three lists – a Federal List for central subjects (59 items), a Provincial List for provincial subjects (54 items), and a Concurrent List for subjects on which both could legislate (36 items). The Viceroy was given residuary powers.

In Indian History:

Dyarchy in the provinces was abolished, and provincial autonomy was introduced.
Six out of eleven provinces, including Bengal, Bombay, Madras, Bihar, Assam, and the United Provinces, became bicameral legislatures.
The Act established key institutions in India, such as the Reserve Bank of India, Federal Public Service Commission, Provincial Service Commission, Joint Public Service Commission, and the Federal Court (1937).

Indian Independence Act, 1947:

Ended British rule in India and declared India as an independent and sovereign state from 15th August 1947.
India was partitioned, leading to the creation of independent dominions of India and Pakistan.
The Act abolished the office of the Secretary of State for India and transferred his functions to the Secretary of State for Commonwealth Affairs.
Designated the Governor-General of India and provincial governors as constitutional (nominal) heads of the states.

Provincial Administration:

Initially, India was divided into provinces, three of which (Bengal, Madras, and Bombay) were known as Presidencies, administered by a Governor and three executive councils appointed by the crown.
In 1870, Lord Mayo initiated the separation of central and provincial finances.
Lord Lytton expanded Mayo’s scheme in 1877, transferring additional heads of expenditure, including Land Revenue, Excise, General Administration, and Law and Justice, to the provinces. Financial arrangements between the Centre and provinces were to be reviewed every five years.

Economic Policies of British Colonial Rule in India

The British colonists in India differed significantly from earlier invaders in their impact on the Indian economy. Unlike previous invaders who made no substantial changes or drained India’s wealth as tribute, British rule led to a transformation of India’s economy into a colonial one. The structure and operation of the Indian economy during this period were shaped by the interests of the British economy. The economic policies of the British can be broadly categorized into three phases:

Phase 1: Mercantilism

This phase was characterized by two primary objectives:

Acquiring a monopoly of trade with India, excluding other English or European merchants, trading companies, and Indian merchants.
Directly appropriating or taking over government revenues through control over State power.
This phase witnessed a large-scale drain of wealth from India. While there was no significant import of British manufactures into India, there was an increase in the export of Indian textiles.

Phase 2: Mercantilism (Free Trade/Industrial Capitalism)

During this phase, British capitalists were granted free entry to develop tea, coffee, and indigo plantations, engage in trade, transportation, mining, and modern industries in India.
The introduction of the Permanent Settlement and the Ryotwari system aimed to transform the traditional agrarian structure into a capitalist one.
However, this economic transformation led to a sharp rise in taxation and the burden on peasants due to the costly administration, both civil and military.

Phase 3: Mercantilism (Financial Capitalism)

The third stage is often referred to as the Era of Foreign Investments and International Competition for Colonies, marking an era of financial capitalism with increased foreign investments and global competition for colonies.
Britain’s industrial dominance faced challenges from several countries in Europe, the United States, and Japan.
The reinforcement of colonial rule over India aimed not only to ward off competitors but also to attract British capital to India, providing it with security. Consequently, a substantial amount of British capital was invested in various sectors in India, including railways, government loans, trade, plantations, coal mining, jute mills, shipping, and banking.

Land Revenue System

To exert effective control over the economy, the British introduced various Land Revenue systems in different regions, including the following:

Permanent Settlement:

The Permanent Settlement system, implemented by Lord Cornwallis in 1793, was introduced in Bengal, Bihar, Orissa, districts of Banaras, and the northern districts of Madras.

According to this system, Zamindars were recognized as the permanent owners of the land, acting as agents of the government.

Zamindars could retain 1/11th of the revenue, submitting the remaining 10/11th to the East India Company.
The landlord’s estate was considered his property, divisible among dependents upon his death. However, this system reinforced feudalism in upper sections and slavery in lower sections of society.
The fixation of land revenue limited the government’s income, hindering its ability to benefit from increased land values and agricultural production.
Many zamindars focused on revenue collection rather than improving agricultural land, leading to the rise of Absentee Landlordism as zamindars migrated to cities.

The Sunset Law, implemented in 1794, stipulated that if a Zamindar failed to submit the revenue from his land by the sunset of the specified date, his estate would be confiscated and auctioned.

Ryotwari System:

Introduced in the Company’s territories by Thomas Munro and Captain Reed in 1820, the Ryotwari System recognized Ryots (or Raliyyats) as owners of the land they cultivated, with revenue collected directly from them.

Farmers were required to pay between 45% and 55% of the revenue to the Company. Wingate and Goldsmith later revised and improved the system after 1836.

The absence of fixed revenue allowed the government to adjust it based on production, and settlements could be revised every 20 to 30 years when the revenue demand typically increased.

Mahalwari System:

Devised after the Permanent Settlement and Ryotwari System, the Mahalwari system was formally launched in 1822 under the regulation of East India Company Secretary Holt Mackenzie.
Applied in 30% of British India’s area, including the North-West provinces, parts of Central India, Punjab, and the Ganga Valley, this system fixed revenue based on the complete village’s (mahal) production assessment, collectively determined for all landowners.
The revenue settlement occurred with landlords who claimed collective ownership of the village.

The Mahalwari system operated as a dual system, with periodic revisions of revenue conducted collectively with the entire community and individually with landlords.

Taluqdari System:

The term “taluqdar” holds varying meanings across different regions of India. In Awadh, a taluqdar signifies a significant landholder, while in Bengal, a taluqdar stands next to a zamindar in terms of land control and social status.
The government entered into agreements with taluqdars for 30 years, during which they collected revenue from the villages under their jurisdiction. Subsequently, they deposited the revenue with the government after deducting the cost of collection and their remuneration.

Banking System Under British Rule:

The banking system in India has a historical foundation, with evidence dating back to the Vedic civilization. However, the modern banking system’s evolution and development can be attributed to the British era, with the first modern bank, the Bank of Hindustan, established in 1770.

Pre-Independence Era of Banking System (1786 to 1947):

The roots of the modern banking system trace back to the Bank of Calcutta, founded in 1786. Subsequently, the British established Presidency Banks in Bengal, Bombay, and Madras.
The Bank of Calcutta, set up on June 2, 1806, was followed by the Bank of Bombay on April 15, 1840, and the Bank of Madras on July 1, 1843. In 1921, these three Presidency banks merged to form the Imperial Bank of India, which was later nationalized in 1955, becoming the State Bank of India.
Additionally, the Allahabad Bank, established in 1855, marked the first Indian-owned bank, followed by the establishment of the Punjab National Bank in 1895 and the Bank of India in Mumbai in 1906.
Between 1906 and 1913, several commercial banks, including India Bank, Central Bank of India, Bank of Mysore, Canara Bank, and Bank of Baroda, were established under Indian ownership.
The Reserve Bank of India (RBI) came into existence in 1935, following the recommendations of the Hilton Young Commission—the Royal Commission on Indian Currency and Finance established by the British government.
Functioning as the central bank, the RBI operates as a statutory body under the RBI Act of 1934.
During this period, the growth of the banking system in India was sluggish, marked by intermittent failures. The sector primarily focused on urban areas, neglecting the rural and agricultural sectors.

Evolution and Reforms in Civil Services:

The Regulating Act of 1773 brought the management of the East India Company under the control of the British Government.
Governor-General Lord Cornwallis, assuming office in February 1786, implemented a series of legal and administrative reforms.
In 1793, he introduced the Cornwallis Code to enhance the overall governance of the East India Company in India, separating revenue administration and judicial administration.
Lord Cornwallis is often recognized as the Father of Civil Service in India, having reformed and reorganized the administration for the Company.
To combat widespread corruption among Company servants, he prohibited civil servants from accepting presents or bribes.
He also increased their salaries and restricted private trade for such servants.

Additionally, Governor-General Wellesley established Fort William College to train new recruits, a move that faced subsequent disapproval from the Directors of the Company.

Progress Made Under Lord Macaulay

The Charter Act of 1833 permitted the inclusion of native Indians in the administration of British India.
Under this act, India’s first Law Commission, chaired by Lord Macaulay, was established, advocating the codification of the Penal Code, the Criminal Procedure Code, and other legal provisions.
The introduction of a merit-based modern Civil Service in India occurred in 1854 following Lord Macaulay’s Report of the Select Committee of the British Parliament.
The Macaulay Report recommended replacing the patronage-based system of the East India Company with a Permanent Civil Service based on merit, with entry through competitive examinations.
As a result, the Indian Civil Services Act of 1861 was enacted, allowing Indians to compete on an equal footing with the British in an open, merit-based recruitment process.
In 1864, Satyendra Nath Tagore became the first Indian to succeed in the exam.

Reforms Under Lord Dufferin

Reforms under Lord Dufferin were influenced by the formation of the Indian National Congress in 1885, leading to a demand for simultaneous examinations in both India and London, along with a request to raise the upper age limit.
Responding to these demands from the Moderate faction of the Indian National Congress, Lord Dufferin appointed the Aitchison Committee on Public Services in 1886 to investigate the issues of civil services in India.
While rejecting the idea of simultaneous examinations, the Aitchison Committee proposed the establishment of provincial civil services.
Members of this service would be recruited separately in each province, either through promotion from lower ranks or through other means.
The Altchison Committee’s recommendations were embraced, and the covenanted civil service was officially designated as the Civil Service of India. Concurrently, the provincial service acquired names specific to each province.

Lee Commission in 1923

A significant progression in the evolution of civil services within India occurred with the establishment of the Lee Commission in 1923. Also recognized as the Royal Commission on the Superior Civil Services in India, it was appointed by the British government to assess the ethnic composition of the superior Indian public services under the Government of India. Notably, the commission consisted of an equal number of Indian and British members.
Previously, the Islington Commission (1917) had proposed that 25% of higher government posts be allotted to Indians.

The Lee Commission, building upon this recommendation, scrutinized the Islington Commission’s findings and evaluated the existing status of two service groups—the All India Services and the Central Services. Provincial Services were excluded from consideration as they were already under the jurisdiction of provincial governments.

Based on the Islington Commission’s suggestions, the Lee Commission advocated in 1924 that 20% of superior posts should be filled through promotions from provincial civil services. Out of the remaining 80%, 40% were to be occupied by British recruits, and the remaining 40% by directly recruited Indians.
Furthermore, the Lee Commission, in its 1924 report, proposed the prompt establishment of the statutory Public Service Commission, as envisaged by the Government of India Act, 1919. Consequently, on October 1, 1926, the Public Service Commission was inaugurated in India for the first time.

UPSC CSAT Test Series

Police Administration During British Rule:

The Indian Councils Act of 1861 laid the foundation for a professional police bureaucracy in India, evolving under different Governors over the years.

Cornwallis System:

As the Company’s influence grew, the necessity for a police force dedicated to maintaining law and order became apparent. The transition from Faujdars to English Magistrates handling police functions proved insufficient in curbing crime. Recognizing this, Lord Cornwallis implemented significant reforms in the police organization.
Cornwallis dismantled the policing powers of Zamindars and reorganized districts into thanas or police jurisdictions spanning twenty to thirty miles each.
Each unit was supervised by an officer called the Darogas, appointed by magistrates.
The Darogas became instrumental in enforcing the Company’s authority in rural areas, marking the inception of the Cornwallis System.

Changes Made in the 19th Century

The Daroga system was officially abolished in 1812.
Tehsildars lost their police duties in 1807, with the District Collector assuming control of village policing.
This consolidation of power in the Collector’s office, overseeing revenue, police, and magisterial functions, became a notable feature.

Sind Model:

The prevailing system failed to effectively maintain law and order across the empire. In response, a new model was trialed in Sind following its annexation by Sir Charles Napier in 1843.
The adaptation of ingenious systems to the requirements of the colonial state was abandoned.
A distinct police department, complete with its officers, was established based on the model of the Royal Irish Constabulary, which was deemed well-suited for colonial conditions.

The Sind model was expanded to Punjab in 1849, Bombay in 1853, and Madras in 1859, albeit with various modifications.

Police Reforms After 1857

The Revolt of 1857 shook the foundations of the British Empire, prompting a heightened awareness of the necessity for efficient information collection and policing machinery across the Empire’s territories.
The Police Commission appointed in 1860 laid the groundwork for the police establishment required by the Empire, resulting in the enactment of the Police Act of 1861.
In the restructured organization, Military Police were phased out, and Civilian Police were organized on a provincial basis.
The civilian authorities gained control over the entire police organization, with civil servants filling the positions of inspector generals for an extended period.
District superintendents were tasked with overseeing rural police, and the Daroga assumed the role of sub-inspector.
This new system effectively addressed the longstanding challenge of integrating rural police into the imperial structure.

The Police Commission of 1902 introduced provisions for the appointment of educated Indians to positions as officers, albeit below the rank of European officers.

Under colonial rule, the police gradually succeeded in reducing major crimes such as dacoity and preventing the organization of large-scale conspiracies against colonial rule.

Judicial Policies During British Rule

The judicial system in India lacked proper procedures and organizational structure from ancient India through the Mughal era.

The establishment of Mayor’s Courts in Madras, Bombay, and Calcutta in 1726 by the East India Company marked the inception of a common law system, relying on recorded judicial precedents.

As the East India Company evolved from a trading entity into a ruling power, new elements of the judicial system supplanted the existing Mughal legal framework. Various Governors-General introduced reforms in the judicial system, including:

Reforms Under Warren Hastings:

District Diwani Adalats were established in districts to resolve civil disputes, with these adalats placed under the collector. Hindu law applied to Hindus, while Muslim law applied to Muslims. Additionally, District Fauzdari Courts were instituted to adjudicate criminal disputes.
The Regulating Act of 1773 led to the establishment of a Supreme Court in Calcutta.

Reforms Under Cornwallis:

District Fauzdari Courts were replaced by Circuit Courts established in Calcutta, Dacca, Murshidabad, and Patna. The District Diwani Adalat was redesignated as the district, city, or Zila Court, now under the jurisdiction of a district judge.

Reforms Under William Bentinck:

The four Circuit Courts were abolished, and their functions were transferred to Collectors under the supervision of the Commissioner of revenue and credit. In addition, Sardar Diwani Adalat and a Sadar Nizamature adalat were established in Allahabad for the convenience of the people of the Upper Provinces.
In 1860, a stipulation was introduced that Europeans could assert no special privileges except in criminal cases, and judges of Indian origin were barred from presiding over their trials.

By 1865, the Supreme Court and the Sadar Adalats underwent consolidation, resulting in the creation of three High Courts in Calcutta, Bombay, and Madras.

In 1935, the Government of India Act established a Federal Court (established in 1937), empowered to arbitrate disputes between governments and hear limited appeals from the High Courts.

Transport and Communication System Under British Rule

Until the mid-19th century, transportation in India was rudimentary, limited to bullock carts, camels, and packhorses.
Recognizing the necessity for a cost-effective transportation system to facilitate the flow of British manufactures into India on a large scale, British rulers introduced steamships on rivers and enhanced road infrastructure.
The construction of the Grand Trunk Road from Calcutta to Delhi commenced in 1839 and concluded in the 1850s. Efforts were also made to connect major cities, ports, and markets via road networks.

Development of Railways

George Stephenson’s first railway engine appeared in England in 1814, with rapid railway development in the 1830s and 1840s.
The initial proposal for a railway in India surfaced in Madras in 1831, albeit with horse-drawn wagons.
In 1834, the idea of steam-driven railways in India gained traction in England, garnering political backing from railway proponents and mercantile houses trading with India.

The inaugural railway line, running from Bombay to Thane, was inaugurated in 1853.

Lord Dalhousie, assuming the role of Governor-General of India in 1849, ardently supported the swift construction of railways. He proposed a network of four main trunk lines designed to connect the country’s interior with major ports and interlink different regions.
The construction of railway lines primarily aimed to connect India’s interior raw material-producing areas with export ports. However, British authorities overlooked the needs of Indian industries concerning both their markets and sources of raw materials.
Furthermore, the railway rates were established in a way that favored imports and exports while discriminating against internal movement of goods. Several expensive railway lines in Burma and North-Western India were built to serve British imperial interests.

Development of Postal and Telegraph System

The British also implemented an efficient and modern postal system and introduced the telegraph. The first telegraph line from Calcutta to Agra was operational in 1853.
Lord Dalhousie introduced postage stamps, replacing the previous system of cash payments for posted letters. He also standardized postal rates, charging a uniform fee.

Impact of Economic Policies of the British in India

Indian goods were procured at low rates and sold at high prices in England. After the Charter Act of 1813 permitted one-way free trade for British citizens, inexpensive machine-made imports inundated the Indian market. Conversely, Indian products encountered increasing difficulties entering European markets.
The newly introduced rail network facilitated the reach of European products to the remotest corners of the country. Consequently, India transitioned from being a net exporter to a net importer.
The shift from traditional livelihoods in India did not coincide with the industrialization process in Bengal.
By 1815, half of Bengal’s total land had transitioned to new ownership, largely dominated by merchants and moneylenders.
This surge in intermediaries, demanding additional payments, led to absentee landlordism and increased the peasant’s burden. The cultivator, facing financial constraints and lacking incentives, refrained from investing in agriculture.
The Zamindar, disconnected from village life, and the government, investing minimally in agricultural, technical, or mass education, contributed significantly to the low productivity levels.

Regular famines became a common occurrence in India, stemming not only from food grain scarcity but also as a direct consequence of poverty imposed by colonial forces.

Commercialization of Agriculture:

In the latter half of the 19th century, agriculture underwent a transformation marked by commercialization. Commercial considerations began to influence agricultural practices, with the cultivation of certain specialized crops intended for sale in national and even international markets.
For the Indian peasant, commercialization was often a coerced process, as they had minimal surplus to invest in commercial crops. This shift connected Indian agriculture to international market trends, subjecting it to their fluctuations.
The compulsory cultivation of commercial crops posed risks for peasants, forcing them to buy food grains at high prices and sell cash crops at lower rates. Consequently, the commercialization of agriculture led to a reduced area of cultivation for food crops, replaced by non-food commercial grains.
The rural economy suffered significantly, leading to a series of famines. The severe impact of the 1876-78 famine prompted the British Government to take substantial measures to prevent future famines in India. Consequently, three Famine Commissions were established in 1878, 1897, and 1900, respectively.

Destruction of Traditional Indian Industries

Traditional Indian industries, including shipbuilding and steel, were crushed. The development of railways lacked coordination with India’s industrial needs and was geared more towards commercial rather than industrial revolution. These developments were perceived as benefiting the British more than the Indians.
It was only in the latter half of the 19th century that modern, machine-based industries began emerging in India.

In 1853, the first cotton textile mill was established in Bombay by Cowasjee Nanabhoy, and the first jute mill was established in 1855 in Rishra (Bengal). However, most modern industries were foreign-owned and controlled by British managing agencies.

The early intellectuals asserted that India’s poverty, exacerbated by British imperialism abroad, was man-made and could be addressed and rectified.
Addressing poverty was perceived as a challenge related to elevating the productive capacity and energy of the population, or as a matter of national development.

Impact of Powerful Class of Manufacturers

Manufacturers began to challenge the monopolization of Company rule, advocating against the importation of Indian-manufactured goods and promoting the export of their own products to India.

Between 1793 and 1813, they waged a formidable campaign against the Company and its commercial privileges. In 1813, they successfully abolished the Company’s monopoly on Indian trade.

Subsequently, the Government of India adopted a policy of free trade for British goods, but this one-sided free trade had detrimental effects on India. Indian handicrafts faced unequal competition with the machine-made products of Britain and gradually approached extinction.
Indian hand-made goods struggled to compete with the more affordable products from British mills.
British mills rapidly enhanced their productive capacity through inventions and the extensive use of steam power.

Instead of exporting manufactured products, India was compelled to export raw materials such as raw cotton, raw silk, and plantation products like indigo, tea, or food grains, which were in short supply in Britain.

Prelims Facts

Which Act of the British established the Supreme Court of Calcutta? – Regulating Act of 1773 (HPSC 2023)
In……, the rights of the tenants on land in Bengal and Bihar were given by the Bengal Tenancy Act. – 1885 [BPSC (Pre) 2015]
The Ryotwari System was introduced by the British in .. Presidencies. – Bombay and Madras [JPSC (Pre) 2011]
The system under which the peasant himself owns the land is responsible for payment of land revenue to the government is known as – Ryotwari System [BPSC (Pre) 2019]
The Staple Commodities exported by the English East India Company from Bengal in the middle of the 18th century were – Cotton, Silk, Saltpetre, and Opium [IAS (Pre) 2018]
Who put forward the famous Drain Theory? – Dadabhai Naoroji [WBCS (Pre) 2022]
With whom did the Britishers made the Permanent settlement? – Zamindars [BPSC (Pre) 2011]
Which Governor-General introduced the Permanent land revenue system in India? – Lord Cornwallis [MPPSC (Pre) 2014)
In which year did the Permanent settlement was introduced? – 1793 AD [UPPSC (Mains) 2010)
The Permanent Settlement and Ryotwari system of land revenue introduced respectively in – Bengal and Madras [JPSC (Pre) 2021]
Sir Thomas Munro is associated with which land revenue settlement? – Ryotwari Settlement [UPPSC (Pre) 2000]
Which leader did not believe in the drain theory of Dadabhai Naoroji? – Sir Syed Ahmad Khan IIAS (Pre) 1996]
Who authored the book ‘Poverty and the Unbritish Rule in India’? – Dadabhai Naoroji [UPPSC (Pre) 2018]

UPSC NCERT Practice Questions

1. In which of the following acts for the first time provision was made for the post of Governor-General of Bengal? UPPSC (Pre) 2013

(a) Regulating Act, 1773

(b) Pitt’s India Act, 1784

(d) Charter Act of 1833

2. By which of the following acts did the British East India Company’s trading monopoly in India end? UPPSC (Pre) 2018

(a) Charter Act of 1793

(b) Charter Act of 1833

(d) Charter Act of 1853

3. Consider the following statements about the Charter Act of 1813.

1. It ended the trade monopoly of the East India Company in India except for trade in tea and trade with China.

2. It asserted the sovereignty of the British Crown over the Indian territories held by the company.

3. The revenues of India were not controlled by the British Parliament.

Which of the statements given above are correct?

(a) 1 and 2

(b) 2 and 3

(d) 1, 2 and 3

4. which one of the following Acts was the Governor General of Bengal designated as the Governor General of India? UPSC (Pre) 2023

(a) The Regulating Act

(b) The Pitt’s India Act

(d) The Charter Act of 1833

5. By which of the following Acts, the system of Chamber of Princes with 120 members was Created? UPPSC (Pre) 2023

(a) Charter Act of 1853

(b) Act of 1919

(d) Act of 1793

6. Which one of the following Acts of British India strengthened the Viceroy’s authority over his executive council by substituting ‘portfolio’ or departmental system for corporate functioning? UPPSC (Pre) 2021

(a) Indian Councils Act, 1861

(b) Government of India Act, 1858

(d) Indian Councils Act, 1909

7. Consider the following provisions of the Government of India Act, 1935.

1. The Act provides separate representation not only for the Muslims, but also for the Sikhs, Indian Christians and Anglo-Indians.

2. The residuary powers were vested to the Central Government.

3. Neither any Counsellor nor any Council of Ministers responsible to the legislature came to be appointed under this Act.

Select the correct answer using the codes given below.

(a) Statements 1 and 2 are correct

(b) Statements 2 and 3 are correct

(d) Statements 1, 2 and 3 are correct

8. Consider the following statements regarding changes made by the Indian Independence Act of 1947 in the position of Constituent Assembly.

1. The Constituent Assembly was made a fully sovereign body.

2.The Constituent Assembly become the first Parliament of free India.

3. When the Constituent Assembly met as the Legislative body, it was chaired by Dr. Rajendra Prasad.

4. The total strength of the Constituent Assembly came down to 299 as against 389.

Codes

(a) Statements 1, 2, and 3 are correct

(b) Statements 2, 3 and 4 are correct

(d) Statements 1, 3 and 4 are correct

9. Under the Permanent Settlement, of 1793, the Zamindars were required to issue pattas to the farmer, which were not issued by many of the Zamindars. The reason was IAS (Pre) 2001

(a) the Zamindars were trusted by the farmers.

(b) there was no official check upon the Zamindars.

(d) the farmers were not interested in getting pattas.

10. The tendency for increased litigation was visible after the introduction of the Land Settlement system of Lord Cornwallis in 1793. The reason for this is normally traced to which of the following provisions? IAS (Pre) 2011

(a) Making Zamindar’s position stronger vis-a-vis the Ryot.

(b) Making East India Company an overlord of Zamindars.

(d) None of the above

11. With reference to Ryotwari Settlement, consider the following statements IAS (Pre) 2012

1. The rent was paid directly by the peasants to the government.

2. The government gave Pattas to the Ryots.

3. The lands were surveyed and assessed before being taxed.

Which of the statements) given above is/are correct?

Codes.

(a) Only 1

(b) 1 and 2

(d) None of these

Know Right Answer

1(a)

2 (c)

3 (a)

4 (b)

5 (a)

6 (a)

7 (c)

8 (c)

9 (b)

10 (d)

11 (c)

Frequently Asked Questions (FAQs)

Q1: What were the administrative policies implemented by the British during their rule in India?

A1: The British implemented several administrative policies in India during their rule. One key policy was the introduction of the administrative system based on the principles laid out by Warren Hastings. The system included the establishment of the civil services, codification of laws, and the introduction of a revenue administration system. The implementation of English education and the formation of a police force were also notable administrative measures.

Q2: How did the British impact the economic policies in India during their rule?

A2: The economic policies of the British in India had a profound impact on the country. The introduction of the Permanent Settlement in 1793, for example, changed the revenue system by fixing land revenue, affecting agrarian relations. The commercialization of agriculture, the establishment of railways, and the promotion of industries that served British interests were also significant economic policies. These measures contributed to the transformation of India’s economy to suit British colonial objectives.

Q3: What were the major changes in administrative policies post the 1857 uprising?

A3: The Indian Rebellion of 1857 had a profound impact on British administrative policies. The British government enacted the Government of India Act of 1858, which marked the end of the East India Company’s rule. The administration was transferred to the British Crown, and a Secretary of State for India was appointed in Britain. The act also established the Viceroy’s executive council and paved the way for a centralized administration.

Q4: How did British policies impact education during their rule in India?

A4: The British introduced significant changes in the education system during their rule. The Wood’s Despatch of 1854 laid the foundation for the development of a modern education system. It emphasized the importance of primary education, the establishment of universities, and the use of English as the medium of instruction. The British sought to create a class of Indians educated in Western thought and values, which had a lasting impact on India’s intellectual and social landscape.

Q5: How did British economic policies contribute to the deindustrialization of India?

A5: British economic policies played a role in the deindustrialization of India. The imposition of heavy duties on Indian goods, the dismantling of traditional Indian industries to make way for British-made products, and the emphasis on raw material extraction for British industries contributed to the decline of Indian handicrafts and industries. The economic policies favored British economic interests at the expense of India’s self-sufficiency and economic prosperity.

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UPSC NCERT Notes – Modern History – Administrative and Economic Policies Under British Rule