It is crude to declare that Britain ‘ruined’ India, as the Congress oath of allegiance asserted in 1930, writes Roderick Matthews in ‘The Flaws in the Jewel: Challenging the myths of British India’ (www.harpercollins.co.in). India is still fertile and full of natural resources, not least of which is her population, he reasons. “British rule did not destroy these assets. However, it did fail in most of its attempts to develop India, except in terms of an educated political class, in which it succeeded brilliantly.”
Tests of a modern government
In the author’s view, the British had no interest in ruining India, and levying the Home Charges could never have done this by itself. He concedes, however, that the proportion of military expenditure within the government’s budget, frequently 50 per cent, helped determine what kind of governance the Indians actually got.
“And unquestionably at the widest strategic level the imperial authorities did not need to stimulate India beyond a certain level of prosperity; holding her was enough. This was not exactly ruination but these deficiencies were enough to disqualify Britain as a guardian power,” Matthews observes in a concluding section of the book titled ‘the balance sheet.’
In terms of performance, the British Raj passed the tests required of a medieval government, by establishing peace, dispensing justice and providing good order, the author notes. Its public accounting was honest, its legal standards high, but it failed nearly all the tests of a modern government, he adds. “It had no popular legitimacy or broad representative element. It played only the smallest part in healthcare and primary education. Above all, it failed to deliver prosperity.”
Fear of bankruptcy
While on the one side, the British took a grip on large parts of India before they knew what to do with them, proving thus they were capitalists before they became imperialists, as the author outlines, on the other side were the Indians who ‘had no real interest in politics and were indifferent to who ruled them, so long as it was done well,’ the way Harcourt Butler would describe in ‘India Insistent’ (1931).
A constructive leadership would have needed money, but the Raj was acutely conscious of its penury, narrates Matthews. “The fear that the Government of India would slide into bankruptcy and would have to be bailed out by London remained a nightmare scenario throughout the late nineteenth century, acting as a drag on government investment and famine relief.”
The book speaks of how the British taxpayers were always shielded from Indian expenses and were never asked to contribute to the Raj’s upkeep, while Indians were taxed as little as possible by the Government of India, which seemed voluntarily to peg the share it demanded from the country’s wealth in about 1870, at the time of Lord Mayo’s financial decentralisation reforms.
“The previous decade had seen the British both desperate to recoup the cost of suppressing the Uprising, but terrified to impose higher taxes, especially on the richer elements within Indian society, both native and European. So the level of extraction was set low, and it was then scarcely moved, except in times of world war, until independence.”
A chapter titled ‘British India and third generation imperialism’ distinguishes the Indian situation from that of native North Americans and the Irish. The native Americans were chased away or killed by bullets or disease (1G – extirpation); and the Irish were dispossessed of their land rights and given a new aristocracy, and their country gradually turned into a part of Britain (2G – absorption), explains Matthews.
“But in India, nearly everything continued as before. The small numbers of British personnel, and their keenness to go home, forced an accommodation with the existing social arrangements. A mutually beneficial alliance with local elites resulted, but not one sealed by intermarriage…” Indians thus got 3G imperialism, he says, and it was less expensive and less disruptive than its predecessors.
The economic element of the 3G imperial package was founded on profit in trade and it continued around surplus in taxation, the book documents. “The nature of the relationship was economic, and exploitative. No matter what was said about trusteeship and uplift, the realities began in accountancy and remained rooted in it. A substantial portion of the early British debates about India was framed around the best way to repatriate the revenue expected from Bengal.”
It may be of interest to know that the most simplistic method of wealth extraction – packing silver rupees into chests – was rarely used, and was avoided after the general shortage of coins in the country through the 1770s. What was the alternative? A wider system, in which tax revenues could be invested in opium, which could be exchanged in China for tea, which could be sold for cash all over the world.
Unofficially, however, profits of private trade were sent home via bills drawn on other European trading companies, such as the Dutch or Danish, or were invested in gemstones, especially diamonds, records Matthews.
Investment in land
When discussing ‘land, growth and poverty,’ the author rues that rural indebtedness and the acquisition of land as investment by wealthy urban entrepreneurs were linked, and that British policy did little to change the environment that produced these worrying trends. Land became an attractive investment for those in India’s cities with spare capital, not so much for rental as for revenue rights, which outperformed conventional stocks, he recounts.
“In a classic piece of not very joined-up government, the British consistently refused, or did not dare, to levy income tax on agricultural earnings after income tax was introduced in the 1860s. This may have encouraged some richer peasants but it drew investment into the countryside in more than equal measure, from wealthy people whose income was at taxable levels.”
The author cites the suggestion that the growth of the Bombay mercantile sector was caused by the lack of a Permanent Settlement in western India, leaving no structured and secure investment in land available to local capitalists, who went into manufacturing instead, building cotton mills while their equivalents in Calcutta bought land and land rights.
Undone by statistics
As colonialists the British imported, promoted and implemented three means for their own expulsion, finds Matthews. The liberalism-Locke package of political rights, the provision of education in English, and the quest for statistical information are the three things he lists.
One learns from the book that the British became heavily involved in collecting data, stimulated by intellectual curiosity in cultural fields like history, ethnology, art and linguistics, but driven in other areas by a need for hard information, such as topographical surveys, biological classifications, or any set of social or economic data.
Such things were required for government to function well, reasons the author. He says that the requirement for knowledge as part of a commitment to good governance drove the British to learn as much, or even more, about India than they knew about Britain. An unintended consequence was that statistics ‘meant to tell the British useful things about India,’ instead ‘let the Indians learn embarrassing things about British rule.’