what were the reasons behind low level of economic under the british rule?
The policies framed and followed by the British government acted as the factors leading to low economic development in India. Britishers followed highly exploitative policies and were only concerned with their own self economic-interest, while the interest of the Indian economy were completely ignored. Such policies left a deep impact on the Indian economy.
Some of the major policies followed by the colonial government and its impact are as follows.
1. Transforming Agriculture Sector as a Mere Supplier of Raw Material: The British government followed the policy of transforming India's agriculture sector to a mere supplier of raw material to the Britain. That is, only those agricultural items were produced and exported that served as raw material for the products of the British industries (such as indigo and jute). This adversely affected the agriculture sector. In return of the exports of the raw material, the Britain supplied India with its own machine-made finished products. The fine British products provided a stiff competition to the Indian handloom and traditional products. Thus, this policy ruined the small manufacturing units and the handicrafts sector.
2. Land Settlement System: In the agriculture sector, the system of land settlement, in the form of Zamindari System was introduced. Under this system, the Zamindars (or the landlords) collected the profits and rent from the peasants or the cultivators who cultivated on their farms. Zamindars in turn paid the revenue collected form the cultivators to the British government. However, neither the Zamindars nor, the British government did anything to improve the condition of agriculture. The agriculture sector was deprived of any investment and technological upgradations. Thus, this system of Zamindari led to the deterioration of economic condition of the poor farmers and hence, of the mass of Indian population.
3. Commercialisation of Agriculture: Besides the Zamindari system, the British introduced the system of commercialisation in agriculture. Indian farmers were forced to produce cash crops such as cotton, indigo, jute instead of the food grains. These cash crops were then used to supply raw material to Britain's industrial base. Thus, while on one hand, the Indian population starved due to the shortage of food grains, the British industries flourished.
4. Systematic Deindustrialisation: The colonial government followed the policy of systematic deindustrialisation. Under this policy, it allowed free export of Indian raw material to Britain and free imports of British products to India. On the other hand, exports of Indian handicrafts faced heavy tariffs. This led to adverse impacts on Indian industries such as imposition of heavy tariff on the export of Indian handicrafts made them costlier in the international market and their demand fell drastically. This led to a gradual collapse of the Indian handicraft and the handloom industry.
5. Monopoly Control over Trade: In the foreign trade sector, Britain maintained a monopoly control over India's export and import. More than half of India's foreign trade was restricted to Britain. Also, the British modified the trade policies in accordance to the interests of their home country. They enforced exports of raw material to British industries at cheap rates and in turn flooded the Indian market with finished machine-made products. In either ways, it was the British industries that benefited at the cost of the domestic producers. Moreover, the revenue generated from the export surplus was used by the Colonial Government to meet its own war and administrative expenditure.
Thus, the British rule and the polices followed by the Colonial Government led to disintegration and gradual collapse of the Indian economy.