Colonialism, Imperialism and Permanent Settlement
In India, Colonialism as a phenomenon entered into three phases
a) Between 1757-1813- Mercantile Phase
b) Between 1813-1857- Industrial capitalism
c) 1857 onwards- Financial capitalism
In the first phase, English east India company, monopolised trade and used its
political power to direct the terms to the artisans of Bengal who were forced to
sell their products at cheaper rates. It meant buying cheap raw material and
goods selling it at high prices.
The second phase is Industrial Capitalism or free trade (1813-57)- The
Industrial revolution in England completely transformed Britain’s economic
relation with India. India became chief exporter of raw material to British
Industries and also served as the main market to manufacture British goods. The
Indian goods had to face tough competition from machine made goods in this
phase.
The third phase of financial capitalism- The British introduced roadways, post
and telegraph into India for their own commercial and political need. As a result
of the various investments made, the burden of public debt on India increased.
Thus, the wealth drained from India played an important role in financing
British capitalist development. The economic policies followed by the British
led to the rapid transformation of India’s economy into a colonial economy
where nature and structure were determined by the needs of the British
economy.
Impact on Economy- Industry, Agriculture and Trade
Handicraft Industry for which India was known collapsed under Colonial rule
due to-
a) Competition by cheap machine-made goods
b) Railways intensified the reach of these goods to remotest part of the
country
c) Free-trade policy helped British to dictate the terms
