British Raj is the term used for the period of British rule on the Indian sub-continent between 1858 and 1947. There is a story that is commonly told in Britain that the colonization of India, as horrendous as it may have been, was not of any major economic benefit to Britain itself. If anything, the administration of India was a cost to Britain.
So according to this tale, the fact that the empire was sustained for so long was a gesture of Britain’s benevolence. It’s a good story, a well-concocted one, indeed, but it’s anything but true.
As the latest research by a very renowned economist Utsa Patnaik shows a whole different picture of reality. The research was published by Columbia University Press recently. Drawing on nearly two centuries of detailed data on tax and trade, Patnaik calculated that Britain drained a total of nearly $45 trillion from India during the period 1765 to 1938.
It is an absolutely staggering stat. For perspective, the United Kingdom’s total annual GDP (Gross Domestic Product) is about $2.6 trillion today. In other words, British Raj siphoned out a sum 17 times more than UK’s GDP today. Incredible!
Courtesy this astonishing robbery, India’s has been plundering in poverty till this day. This fiscal transfer from the sub-continent to Britain has hampered the country’s ability to come out of poverty.
Britain ruled India (directly or indirectly) for about 200 years, a period that was marred with extreme poverty and famine. India’s wealth depleted in these two centuries and was at a record low at the time of Independence.
Renowned economist Utsa Patnaik, who has done a research on the fiscal relations between Colonial India and Britain, has tried to answer a question many Indians are likely to be interested to know that is exactly how much money did Britishers take away from India?
Patnaik’s answer that the amount $45 trillion was looted by the British crown from India in the two centuries it had influence in the sub-continent. The estimate is taken by taking India’s export surplus earnings as the measure and compounding it at a 5% rate of interest. This figure is conservative, she says. It also does not include the debts that Britain imposed on India during the Raj. It is shocking but seems legit.
According to the researcher, the scars of colonization remain despite Britain leaving India over 70 years ago. She said that Indians were never given due credit for their precious resources like gold and forex earnings, which all went to feed the people of the British.
As per Patnaik’s research , India’s per capita income was almost steady during the period from 1900 to 1945-46. In 1900-02, India’s per capita income was Rs 196.1, while it was just Rs 201.9 in 1945-46, a year before India got its independence. During this period, the per capita income rose to maximum Rs 223.8 in 1930-32. All this happened when “India registered the second largest export surplus earnings in the world for three decades before 1929,” she said.
Her research tells that every year the Britishers siphoned off resources equivalent to 26-36% of the Central government’s budget. This proved to be one of the biggest reasons for India’s adverse economic growth. She believes if these international earnings had remained in India, the country would have been much ahead in terms of proper healthcare and social welfare indicators and would have been likely a ‘ developed country ‘.
She said Britain exported foodgrains and imposed high taxes, which spread famine in India and reduced its purchasing power. She said India’s position at the time of independence was absolutely dismal on all social factors.
The British Raj kept taking away hard-earned money of poor Indians. She reports that Indian expectation of life at birth was just 22 years in 1911 courtesy malnutrition and other diseases.
Despite all these appalling realities the distorted British narrative that colonialism actually helped colonies has found considerable traction in the popular imagination: according to a 2014 survey, 50% of people in Britain believe that colonialism was beneficial to the colonies.
Yet during the entire 200-year history of British rule in India, there was almost no increase in per capita income. In fact, during the last half of the 19th century – the prime days of British intervention – income in India collapsed by half. The average life expectancy of Indians dropped by a fifth from 1870 to 1920 as tens of millions died due to policy-induced famine in the country. Patnaik’s research proves that Britain didn’t develop India. Quite the contrary, in reality, India developed Britain.
After all these years never has Britain apologized to people of India for its barbarism. They definitely deserve it. Even reparations should be done but the sum that was looted is so huge that the whole UK’s economy can’t pay for the loss of yesteryears. But the least Britain can do is, to tell the truth. It needs to recognize that they retained control of India not out of benevolence but for the sake of plunder.
The British crown in particular morally owes reparations for the 3 million civilians who died in the Bengal famine because it was an engineered famine as all food items were exported out of Indian sub-continent by British Raj.