Funds from India helped to develop Britain!
Patnaik noted that while Indians died due to malnutrition and disease, the British continued snatching hardearned money of poor Indians, whose life expectancy in 1911 was 22 years. Britain exported food grains and imposed high taxes which spread famine in India and reduced its purchasing power
A book entitled “Dispossession, Deprivation and Development: Essays for Utsa Patnaik (Tulika Books), claims that Britain stole a total of USD45 trillion from India. The compilation of essays of renowned economist Utsa Patnaik, draws on nearly two centuries of detailed data on tax and trade, to calculate that Britain drained nearly USD45 trillion from India between 1765 and 1938.
To place that sum in perspective, it is 17 times more than the total annual GDP of Britain today.
Patnaik’s research finds that this illegal withdrawal took place through the trade system and, prior to the colonial period, Britain bought goods like textiles and rice from Indian merchants and paid for them in the normal way—mostly with silver—as they did with other countries. Patnaik is Professor Emerita at the Centre for Economic Studies and Planning, JNU, New Delhi
This system changed in 1765, shortly after the East India Company took control and established a monopoly over Indian trade. And this took the form of the East India Company collecting taxes in India, and cleverly using a portion of those revenues, approximately a third, to fund the purchase of Indian goods for British use.
Instead of paying for Indian goods themselves, British traders acquired them for free, buying from peasants and weavers using money they took from them. Patnaik has called it a scam, theft on a grand scale, as the Indians were unaware of the business transactions. The agent who collected the taxes was not the same as the one who appeared to buy their goods.
Some of these goods, ‘stolen from India’ were consumed in Britain, while the rest were re- exported to other countries. This re-export system allowed Britain to finance a flow of imports from Europe, including strategic materials like iron, tar and timber, all of which were essential to the British industrialization programme and, indeed, the Industrial Revolution depended in large measure on the systematic theft from India.
When the British Raj took over in 1858, the colonisers added a special new twist to the tax-and-buy system. So when the East India Company monopoly collapsed, Indian producers were allowed to export their good directly to other countries, but Britain ensured that all payments ended in London.
Patnaik names four distinct economic periods in colonial India between 1765 and 1938, and calculates the extraction for each and then compounds it at a modest rate of interest, about five per cent from the middle period to the present. Adding it up, she finds the total drain near USD44.6 trillion, adding that this figure is conservative.
Patnaik noted that while Indians died due to malnutrition and disease, the British continued snatching hard-earned money of poor Indians, whose life expectancy in 1911 was 22 years. Britain exported food grains and imposed high taxes which spread famine in India and reduced its purchasing power. She said the annual per capita consumption of food was 200 kg in 1900, going down to 137 kg during World War II. Also, India was a dismal failure on all social and human development factors.
Deprivation and the search for employment forced nearly two million Indians to emigrate to countries such as Trinidad, then British Guiana, now Guyana, Suriname, Fiji, Mauritius, and the African continent during the 18th and 19th centuries.
Patnaik said Indians were not given due credit for their precious resources like gold, foreign exchange and jewelry exchanges. Had it not been for these series of thefts, she opines, India could have been a developed nation providing proper health care and social welfare programmes.
The prestigious Kohinoor diamond still remains an issue with Britain. Former British Premier David Cameron insisted that it would always remain a part of Britain’s property.
Jason Hickel, historian at the University of London and Fellow of the Royal Society of Arts, summed up the British-India issue thus: “We need to recognize that Britain retained control of India not out of benevolence, but for the sake of plunder and that Britain’s industrial rise didn’t emerge from the steam engine and strong institutions, our school books would have it, but depended on violent theft from other lands and other peoples.”
The conclusion to draw is that it was India which actually developed Britain.