Drain of Wealth
Drain of Wealth
Section titled “Drain of Wealth”2020-04-27 15:04:38
“Our system acts very much like a sponge, drawing up all the good things from the banks of the Ganges and squeezing them down on the banks of the Thames.” - Lawrence Sullivan, Deputy Chairman, Court of Directors.
- Drain Theory was the focal point of critique of Indian Nationalists.
- Dadabhai Naoroji put the theory forward in May 1867.
- Other proponents were RC Dutt and MG Ranade who said that drain had caused innumerable famines, draught which were more fatal that any known before
- amounted to 1/2 of gov revenues, 1/3 of total savings of the country
- was a high watermark for Indian nationalists since the theory was easily graspable by the common public
- As per Naoroji’s calculation 12mil pound per yr, per capita at Rs 20.
- 30 mil per William Digby calc per capita inc to Rs 18.
- Led to overburdening of agri, further impoverishment.
How Indian Wealth Was Drained
Section titled “How Indian Wealth Was Drained”- in the form of salaries and pensions of British officers
- interest on loans taken by Indian Gov
- profits of British capitalists
- Home Charges/ expenses of Indian gov in Britain
- Excess exports over imports.
- Transfer of money took place through sale of Council Bills that was sold in London
- Free trade and foreign capital investment were used as garb for resource extraction
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Trace the course and explain the consequences of the drain of wealth from Bengal in the eighteenth century. [1982, 60m]
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“Our system acts very much like a sponge, drawing up all the good things from the banks of the Ganges, and squeezing them down on the banks of the Thames.” Comment. [1985, 20m]
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Write a critique on the impact of the Drain Theory of Dadabhai Nauroji in the growth of economic nationalism. [2008, 60m]
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“The need for a unilateral transfer of funds to Britain was constant factor and, in fact, progressively increased over time.” Critically evaluate. [2011, 20m]