🤯 The Cost of the British Rule: $45 trillion
This Independence Day we are taking a look into how much India lost before it gained freedom.
For years, in fact for decades on end, many Indians have believed that the British rule was like a "shakkar ki churri" (knife made of sugar) for us.Â
That's because even though the British ruled us for years, taxing us relentlessly and endlessly, they helped our country develop.
However, a recent study shows that the British may not have been all that benevolent (duh!).Â
While they did help our country develop, it came at a huge cost: approximately $45 trillion in today's times! And on this Independence Day, we're dissecting how exactly they managed to do this.
💰 How the British Looted Us
It wasn't really the British Raj that started the exploitation of India.
It all began with the East India Company.Â
The company came here to trade, however, it loved the vatavaran (atmosphere) too much, so it stayed.Â
It got bored of just trading and in the 1750s, began waging battles, which it won.
These battles not only gave it rule over Indian territories but also the right to tax them.
Now, once it started taxing Indians, all its imports from India basically became free. The company would charge Indians exorbitant amounts of taxes. And out of these taxes, it paid for the goods it planned to buy.Â
The amount it paid for these goods was almost always less than the taxes collected. So, these goods were basically free for the British. These free goods were not just consumed in Britain, they were also sold at much higher prices to other countries as well.
And this allowed Britain to import other important goods like steel and timber from European countries, which helped usher in the Industrial Revolution.
But after the 1857 war, the East India Company was dissolved and the British Raj took over India.
Thanks to this move, Indians were free to trade with the rest of the world on their own.
However, the British found a way to undermine us here as well.Â
They created Council Bills, a new kind of currency that other countries had to purchase if they wanted to import things from India.
They could buy this currency only from the British.
So, Britain got all the gold and silver that technically should have been paid to India for our exports, while Indians got some meagre rupees for the transaction.
Because of this system, even though India was in a trade surplus (we were exporting more than it was importing), we saw a current account deficit.
This means that for our imports, we had to borrow heavily from Britain. So, basically, we had to pay an interest on the money they took from us.
Fun Fact: By 1911-1913, India had the second largest trade surplus earnings in the world.
And as on paper we were reporting a deficit, many believe that ruling India was a loss-making proposition for the British Raj.
Now, from the money they took as taxes, they also built our infrastructure. Their biggest gift to India? The Indian Railways.
The Indian Railways doesn't just facilitate trade travel and commerce in our country, it is the biggest employer in India, giving 1.4 million people their bread and butter.Â
But, hey. The British didn't make the railways out of the kindness of their heart. They were built for their own trade purposes. And Indians have paid nine times more for the railway system than most other countries (that's probably where the teen guna lagaan would have gone if Aamir Khan had lost the game).Â
While America paid 2,000 pounds for building one mile of railway, India paid 18,000 pounds. And while the costs were borne by us, most of the profits were pocketed by the British.
Taking into account all of these costs and compounding them at a 5% interest rate, economist Utsa Pattnaik claims that Britain profited by $45 trillion!
Now, many think this amount is overly inflated, given India's economic condition at the time.
But no one can dispute that we lost a significant amount of wealth due to the British Rule.
Our share of the world income shrank from 22.6% in 1700s to 3.8% in 1952!
And that's not all. Our per capita income declined by half towards the end of British rule, and so did our life expectancy. While this could be because more money and more lives were being dedicated towards the independence movement, this resulted in India being one of the poorest countries in the world.
But, let's look at the bright side now.Â
They helped establish several schools and universities in India, fuelling the growth of education. They were instrumental in abolishing practices like Sati. They helped Indian states that were often battling, unite and come together.
But $45 trillion was a huge price to pay for these reforms. And that's why many believe that the current UK government should pay us reparations for all the pain they caused us.Â
However, will it be fair to ask for reparations now for damage done over 200 years ago by a different set of people?
Or should India focus on its own growth and try to become a superpower despite all that she has seen?
âš¡In a line: The British rule cost India heavily, some believe as much as $45 trillion, leaving us poorer and without a lot of our resources.
💡Quick question: Do you think Britain should pay India reparations?
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