Test: The Economic Impact of British Rule in India- 1 - UPSC MCQ

In the early 1700’s the Portuguese introduced a new form of smoke-able opium to China. The opium was mixed with tobacco and became a new commodity in China. Opium trade was originally dominated by the Dutch, but was soon taken over by the British due to British rule in India and the foundation of the East India Company. The British started to trade opium for silver in southern China, and from there the opium trade exploded. British exportation of opium from India to China facilitated a flow of silver into India. This compensated for the British drain on India and solidified India as a substantial financial base for England. For these reasons, the British heavily pushed opium trade with China.

The Government of India also tried to increase the number of purchasers of British goods by following a policy of fresh conquests and direct occupation of protected states like Awadh. ... However, not only were Indian industries not protected by the foreign rulers but foreign goods were given free entry.

C is the correct option.Indian exports to foreign countries fell rapidly due to Prohibitive import duties and Development of machine industries.
A tariff so high that it makes an import prohibitively expensive. A prohibitive tariff discourages importers from bringing goods into the country in the first place because they will be difficult to sell. For example, a country may levy a 900% tariff on a good that it wishes to keep out.

China and Britain banned import of Indian opium.
 

The correct answer is B as Impact of British Rule on India .The British exported to Britain part of India's wealth and resources for which India got no adequate economic or material return.  Previously the rulers had spent the revenue they extracted from the people inside the country

C is the correct option.Even the worst of previous Indian governments had spent the revenue  ... But the British remained perpetual foreigners. Englishmen, working and trading in India, nearly always planned to go back to Britain and the Indian Government was controlled by a foreign company of merchants and the Government of Britain.

The drain of wealth from Bengal began in 1757 when the Company's servants began to carry home immense fortunes extorted from Indian rulers, zamindars, merchants, and from other common people. They sent home nearly £ 6 million between 1758 and 1765.

In 1765, the company acquired the Diwani of Bengal & began purchase of the Indian goods out of the revenue of Bengal and exported them. These purchases were known as Company's investment.

In 1840, Lord Ellenborough admitted that India was “required to transmit annually to this country (Britain), without any return except in the small value of military stores, a sum amounting to between two and three million sterling”.

D is the correct option.None of the given lead to the decline of traditional exports of cotton and silk manufacturers in the face of Manchester competition, did not raise acute remittance problems.The First World War may have spelt the beginning of the end for the textile industry, but the Second World War brought about a short reprieve.

Indian opium was exported to China for purchasing tea.

Key Factors for the United Kingdom's Balance of Payments by the End of the 19th Century:
There were several factors that played a significant role in the United Kingdom's balance of payments by the end of the 19th century. Among these factors, one factor became absolutely vital for the whole complex mechanism. This factor is:
India's Export Surplus (Option B)
Explanation:
1. Raw materials the U.K. got from India:
- The United Kingdom heavily relied on India for the supply of raw materials, including cotton, jute, tea, and indigo.
- These raw materials were crucial for the British textile industry and other manufacturing sectors.
2. India's export surplus:
- India had a significant export surplus, meaning that it exported more goods than it imported from the United Kingdom.
- This export surplus contributed to a positive balance of payments for the United Kingdom.
- The surplus allowed the United Kingdom to earn foreign exchange and maintain a favorable trade balance.
3. The economic exploitation of India:
- During the 19th century, the British East India Company and later the British Raj exercised significant control over India's economy.
- The economic exploitation of India allowed the United Kingdom to extract wealth from the country and benefit its own economy.
- The exploitation involved practices such as levying heavy taxes, monopolizing trade, and controlling Indian industries.
4. None of these:
- This option is incorrect as both raw materials from India and India's export surplus played crucial roles in the United Kingdom's balance of payments.
Therefore, the correct answer is Option B: India's export surplus.

The correct answer is C as While explaining the mechanism of drain, JOHN STARCHY remarked “The Secretary of State drawn bills on the Government treasury in India, and it is mainly through these bills, which are paid in India out of the public revenues, that the merchant obtains the money that he requires in India, and the Secretary of States the money that he requires in England”

The drain theory had sever critics from the beginning. The drain, it has been argued, was greatly exaggerated by nationalists, since foreign trade and export surplus could amount to only a small part of India’s national income. But surely Naoroji had a point here when he argued (before the Welby Commission in 1895) that the amount being drained away represented a potential surplus which might have raised Indian income considerably if invested properly inside India.

Sir John Strachey GCSI CIE (5 June 1823 – 19 December 1907) was an English civil servant in British India.

Work on the Grand Trunk Road from Calcutta to Delhi began in 1839 and completed in the 1850's. Efforts were also made to link by road the major cities, ports, and markets of the country.

India's first railway proposals were made in Madras in 1832. The Red Hill Railway, the country's first train, ran from Red Hills to Chintadripet bridge in Madras in 1837. It was hauled by a rotary steam-engine locomotive manufactured by William Avery.

The First Railway Line in India
The first railway line in India was opened to traffic in 1853. It played a significant role in the development of transportation and communication in the country. The railway line connected two major cities, and here are the details:
Bombay and Thana
The first railway line in India ran between Bombay (now Mumbai) and Thana, both located in the state of Maharashtra. This line was approximately 34 kilometers long and was inaugurated on April 16, 1853.
Importance of the First Railway Line
The opening of this railway line marked a significant milestone in India's transportation history. It brought about several important changes and benefits:
1. Improved connectivity: The railway line facilitated faster and more efficient transportation between Bombay and Thana, reducing travel time significantly compared to traditional means of transport such as horse carriages.
2. Boost to trade and economy: The railway line played a crucial role in promoting trade and commerce between Bombay and Thana, as it provided a reliable and cost-effective mode of transportation for goods and commodities.
3. Social impact: The railway line brought people closer and allowed for easier movement between the two cities. It fostered cultural exchange, enhanced social interaction, and contributed to the overall development of the region.
4. Catalyst for further railway development: The success of the first railway line in India paved the way for the expansion of the railway network across the country. It encouraged the construction of more railway lines, connecting various regions and cities, and eventually leading to the extensive railway network that exists in India today.
In conclusion, the first railway line in India was opened to traffic in 1853, connecting Bombay and Thana. This marked a significant milestone in India's transportation history and played a crucial role in the development of the country's railway network.

Lord Dalhousie, who became Governor-General of India in 1849, was an ardent advocate of rapid railway construction.

After 1880, railways were built through private enterprise as well as through state agency. By 1905 nearly 45,000 kms of railways had been built.

The correct answer is C as  By 1905 28000 miles of railways had been built in India

Your answer is lord Dalhousie introduced postage stamps in india . he served as governor general of india from 1848 to 1856. during the reign of lord Dalhousie , in 1952 ,first postage stamps were used in india at district scinde. on first October 1954, the first all india stamp was issued.

Development of Railways in India:
I. The amount of over 350 crores invested in railways was Indian capital.
- This statement suggests that a significant amount of investment in the development of railways in India came from Indian investors.
- It indicates that Indians were actively involved in the financing of railway projects.
II. The amount of over 350 crores invested in railways was mostly by British investors.
- This statement contradicts the first statement.
- It suggests that the majority of the investment in railways came from British investors.
III. For the first 50 years investors suffered financial losses.
- This statement implies that the investors, whether Indian or British, experienced financial losses during the initial period of railway development in India.
- It indicates that the railways may not have been initially profitable.
IV. Railways were developed in India primarily for serving the economic, political, and military interests of British imperialism.
- This statement highlights the primary motive behind the development of railways in India, which was to serve the interests of British imperialism.
- It suggests that the railways were not primarily developed for the benefit of the Indian population.
Conclusion:
Based on the given statements, the correct answer is option C. The development of railways in India involved a significant investment from both Indian and British investors. However, the primary motive behind the development was to serve the economic, political, and military interests of British imperialism. Additionally, investors suffered financial losses during the initial years of railway development.

The first telegraph line between Calcutta and Agra was opened.

Explanation:
The main burden of providing money for the East India Company, whether for profits or for wars of expansion, fell on the peasants. Here's a detailed explanation:
1. East India Company Background:
- The East India Company was a British trading company that had a monopoly on trade with the East Indies (India, Southeast Asia, and China) during the 17th and 18th centuries.
- The company aimed to maximize its profits and expand its influence in the region.
2. Need for Money:
- The East India Company required substantial funds to finance its operations, including trade expeditions, military campaigns, and administrative expenses.
- Acquiring money was crucial for the company's survival and growth.
3. Burden on Peasants:
- The burden of providing money for the East India Company primarily fell on the peasants, who formed the majority of the population in India.
- The company imposed heavy taxes, levies, and tributes on the peasants to generate revenue.
- The peasants were often subjected to oppressive taxation policies, leading to economic hardships and impoverishment.
4. Impact on Peasants:
- The financial burden imposed by the East India Company had severe consequences for the peasants.
- They had to bear the brunt of increased taxes, which reduced their income and standard of living.
- Many peasants were unable to pay their taxes and fell into debt, resulting in land seizures, forced labor, and other forms of exploitation.
5. Other Contributors:
- While the peasants bore the main burden, other groups also contributed to the company's finances.
- Native merchants, though not as heavily burdened as the peasants, were subjected to various trade regulations and had to pay customs duties.
- Small zamindars, who were local landowners, also faced taxation and sometimes had to provide financial support to the company.
- Puppet rulers, who were Indian rulers under the control or influence of the East India Company, often had to contribute financially to support the company's interests.
In conclusion, the main burden of providing money for the East India Company fell on the peasants. They suffered from heavy taxation and economic exploitation, which had a profound impact on their livelihoods.

They do nothing to improve their land because they fear they can be evicted from their land at any time. If they improve their farming, the zamindar immediately increases the share he takes from them.

They were given hereditary rights of succession of the lands under them. The amount to be paid by the landlords was fixed. It was agreed that this would not increase in future (permanent in nature). The fixed amount was 10/11th portion of the revenue for the government and 1/10th was for the Zamindar.

First, the zamindars and revenue collectors were converted into so many landlords. They were not only to act as agents of the government in collecting land revenue from the ryot but also to become the owners of the entire land in their zamindaris. Their right of ownership was made hereditary and transferable. Hence rent of revenue was fixed very high. Zamindars were to give 10/11th of the rental they derived, keeping the only 1/11th for themselves.

Moreover, the Permanent Settlement enabled the Company to maximise its income as land revenue was now fixed higher than it had ever been in the past. ... The Permanent Zamindari Settlement was later extended to Orissa, the Northern Districts of Madras, and the District of Varanasi.

The Ryotwari Settlement was in the end introduced in parts of the Madras and Bombay Presidencies in the beginning of the nineteenth century. The settlement under the Ryotwari system was not made permanent. It was revised periodically after 20 to 30 years when the revenue demand was usually raised.