1. Colonial Economy

(a) Changing Composition, Volume, and Direction of Trade

• During British rule, India’s economy became colonial and dependent.

• The composition of trade changed — India exported raw materials (cotton, jute, indigo, opium, tea, wheat) and imported finished British goods (textiles, machinery, iron goods).

• The volume of trade increased but benefitted the British more than Indians.

• The direction of trade shifted from Asian countries to Britain and Europe.

• India became a supplier of raw materials and a consumer of British manufactured goods.

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(b) Expansion and Commercialization of Agriculture

• Traditional subsistence farming turned into commercial farming.

• Farmers were encouraged to grow cash crops like indigo, cotton, jute, tea, coffee, and opium.

• This led to food scarcity, famine, and peasant poverty.

• Land was used for exports rather than feeding the population.

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(c) Land Rights and Settlements

• The British introduced new land revenue systems to secure fixed income:

  1. Permanent Settlement (1793) – Bengal (Zamindari System): Land given to Zamindars who collected taxes.

  2. Ryotwari Settlement – Madras & Bombay: Taxes collected directly from peasants (ryots).

  3. Mahalwari Settlement – North-West Provinces: Land belonged to village communities.

• These systems increased peasant burden, debt, and landlessness.

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(d) Rural Indebtedness and Landless Labour

• Farmers borrowed from moneylenders at high interest rates.

• Failure to repay debts led to loss of land and bonded labour.

• Landless agricultural workers increased rapidly.

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(e) Irrigation and Canal System

• The British developed irrigation for revenue and commercial crops, not for peasants’ benefit.

• Large canals built: Upper Ganga Canal (1854), Punjab Canal System, etc.

• Helped some areas but unequal distribution caused regional imbalance.

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(f) Decline of Traditional Industries

• Indian handicrafts and cottage industries, especially textiles, declined due to British imports.

• Skilled artisans lost jobs — deindustrialization took place.

• Led to urban decline (de-urbanization) and migration to villages.

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(g) Economic Drain

• Indian wealth was drained to Britain through:

  • Home charges (salaries, pensions of British officers)

  • Profits of British companies

  • Interest on public debt held in Britain

• Concept popularized by Dadabhai Naoroji (“Drain of Wealth Theory”).

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(h) Impact of World Wars

• World War I: Stimulated Indian industries (cotton, steel, jute).

• World War II: Further boosted industry but caused inflation and food shortages.

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(i) British Industrial Policy

• Policies favored British interests.

• Industrialization was limited and regionally uneven.

• Modern industries emerged: textiles (Bombay), jute (Bengal), iron & steel (TISCO, 1907), coal (Bengal-Bihar).

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(j) Factory Legislation and Labour Movements

• Early factories had poor working conditions.

• Laws like Factories Act 1881, 1891, 1911 tried to regulate work hours and child labour.

• Labour unions developed: AITUC (1920) was the first national union.

• Leaders: Lala Lajpat Rai, N.M. Joshi.

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(k) Monetary Policy and Banking

• Uniform currency system introduced (Rupee).

• Presidency Banks (Bombay, Calcutta, Madras) merged into Imperial Bank (1921) → precursor to SBI (1955).

• Exchange rate fixed to Gold Standard.

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(l) Railways, Transport, and Communications

• Railways introduced in 1853 (Bombay to Thane) to transport goods to ports.

• Roads, Post, and Telegraph expanded to help administration and trade.

• Promoted internal unity but mainly served colonial economic interests.

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(m) Urban Growth and Planning

• New cities emerged: Bombay, Calcutta, Madras, Kanpur.

• Urban architecture reflected British styles (Victorian-Gothic, Indo-Saracenic).

• New municipal systems established but urban poor faced sanitation and housing problems.

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(n) Famines, Epidemics, and Government Policy

• Frequent famines: 1770, 1876–78, 1899, 1943 (Bengal Famine).

• Caused by cash crop focus and neglect of food security.

• Epidemics like plague, cholera, influenza spread.

• Government response was inadequate and indifferent.

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2. Social and Cultural Change

(a) Contact with Christianity and Missionaries

• Missionaries criticized Indian traditions (caste, child marriage, widowhood).

• Promoted Western education, women’s education, and social reform.

• Led to cultural awakening and self-reform movements.

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(b) Education and Modernism

• Macaulay’s Minute (1835) promoted English education.

• 1854: Wood’s Despatch expanded education system.

• Universities established (Calcutta, Bombay, Madras – 1857).

• Spread of science, public health, medicine laid foundations of modern India.

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(c) Indian Renaissance and Reform Movements

• Rise of social reformers:

  • Raja Ram Mohan Roy – Brahmo Samaj, against Sati.

  • Swami Dayananda Saraswati – Arya Samaj, back to Vedas.

  • Swami Vivekananda – emphasized spiritual nationalism.

  • Jyotiba Phule, Periyar – anti-caste, education for all.

• Middle class emerged with English education — became leaders of reform and nationalism.

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(d) Women’s Question

• Reformers like Ishwar Chandra Vidyasagar, Pandita Ramabai, Sarojini Naidu worked for women’s rights.

• British passed laws: Abolition of Sati (1829), Widow Remarriage (1856), Age of Consent Act (1891).

• Nationalist discourse also included women’s emancipation and education.

• Women’s organizations like AIWC (1927) raised gender issues.

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(e) Printing Press and Public Opinion

• The printing press helped spread ideas, nationalism, and reform.

• Newspapers: Bengal Gazette (1780), Kesari, Amrita Bazar Patrika, The Hindu.

• Created public opinion and political awareness.

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(f) Modernization of Indian Languages and Arts

• Vernacular literature flourished: Bankim Chandra Chatterjee, Bharati, Premchand.

• Revival of Indian art and music: Ravi Varma, Abanindranath Tagore.

• Performing arts (theatre, classical music) adapted modern themes.

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(g) Tribal and Peasant Movements

• Major tribal uprisings: Santhal (1855–56), Munda (1899–1900).

• Peasant movements: Indigo Revolt (1859), Deccan Riots (1875).

• They protested exploitation by zamindars, moneylenders, and British officials.

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✅ Summary Table