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How Britain stole $45 trillion from India

 How Britain stole $45 trillion from India

And lied about it.

Lord Louis Mountbatten, the last Viceroy of India, and his wife, Lady Edwina Mountbatten, ride in the state carriage towards the Viceregal lodge in New Delhi, on March 22, 1947 [File: AP]

Lord Louis Mountbatten, the last Viceroy of India, and his wife, Lady Edwina Mountbatten, ride in the state carriage towards the Viceregal lodge in New Delhi, on March 22, 1947 [File: AP]

There is a story that is commonly told in Britain that the colonisation of India – as horrible as it may have been – was not of any major economic benefit to Britain itself. If anything, the administration of India was a cost to Britain. So the fact that the empire was sustained for so long – the story goes – was a gesture of Britain’s benevolence.

New research by the renowned economist Utsa Patnaik – just published by Columbia University Press – deals a crushing blow to this narrative. Drawing on nearly two centuries of detailed data on tax and trade, Patnaik calculated that Britain drained a total of nearly $45 trillion from India during the period 1765 to 1938. 

It’s a staggering sum. For perspective, $45 trillion is 17 times more than the total annual gross domestic product of the United Kingdom today.

How did this come about?

It happened through the trade system. Prior to the colonial period, Britain bought goods like textiles and rice from Indian producers and paid for them in the normal way – mostly with silver – as they did with any other country. But something changed in 1765, shortly after the East India Company took control of the subcontinent and established a monopoly over Indian trade.

Here’s how it worked. The East India Company began collecting taxes in India, and then cleverly used a portion of those revenues (about a third) to fund the purchase of Indian goods for British use. In other words, instead of paying for Indian goods out of their own pocket, British traders acquired them for free, “buying” from peasants and weavers using money that had just been taken from them.

It was a scam – theft on a grand scale. Yet most Indians were unaware of what was going on because the agent who collected the taxes was not the same as the one who showed up to buy their goods. Had it been the same person, they surely would have smelled a rat.

Some of the stolen goods were consumed in Britain, and the rest were re-exported elsewhere. The re-export system allowed Britain to finance a flow of imports from Europe, including strategic materials like iron, tar and timber, which were essential to Britain’s industrialisation. Indeed, the Industrial Revolution depended in large part on this systematic theft from India.


On top of this, the British were able to sell the stolen goods to other countries for much more than they “bought” them for in the first place, pocketing not only 100 percent of the original value of the goods but also the markup.

After the British Raj took over in 1858, colonisers added a special new twist to the tax-and-buy system. As the East India Company’s monopoly broke down, Indian producers were allowed to export their goods directly to other countries. But Britain made sure that the payments for those goods nonetheless ended up in London. 

How did this work? Basically, anyone who wanted to buy goods from India would do so using special Council Bills – a unique paper currency issued only by the British Crown. And the only way to get those bills was to buy them from London with gold or silver. So traders would pay London in gold to get the bills, and then use the bills to pay Indian producers. When Indians cashed the bills in at the local colonial office, they were “paid” in rupees out of tax revenues – money that had just been collected from them. So, once again, they were not in fact paid at all; they were defrauded.

Meanwhile, London ended up with all of the gold and silver that should have gone directly to the Indians in exchange for their exports.

This corrupt system meant that even while India was running an impressive trade surplus with the rest of the world – a surplus that lasted for three decades in the early 20th century – it showed up as a deficit in the national accounts because the real income from India’s exports was appropriated in its entirety by Britain. 

Some point to this fictional “deficit” as evidence that India was a liability to Britain. But exactly the opposite is true. Britain intercepted enormous quantities of income that rightly belonged to Indian producers. India was the goose that laid the golden egg. Meanwhile, the “deficit” meant that India had no option but to borrow from Britain to finance its imports. So the entire Indian population was forced into completely unnecessary debt to their colonial overlords, further cementing British control. 

Britain used the windfall from this fraudulent system to fuel the engines of imperial violence – funding the invasion of China in the 1840s and the suppression of the Indian Rebellion in 1857. And this was on top of what the Crown took directly from Indian taxpayers to pay for its wars. As Patnaik points out, “the cost of all Britain’s wars of conquest outside Indian borders were charged always wholly or mainly to Indian revenues.” 

And that’s not all. Britain used this flow of tribute from India to finance the expansion of capitalism in Europe and regions of European settlement, like Canada and Australia. So not only the industrialisation of Britain but also the industrialisation of much of the Western world was facilitated by extraction from the colonies.

Patnaik identifies four distinct economic periods in colonial India from 1765 to 1938, calculates the extraction for each, and then compounds at a modest rate of interest (about 5 percent, which is lower than the market rate) from the middle of each period to the present. Adding it all up, she finds that the total drain amounts to $44.6 trillion. This figure is conservative, she says, and does not include the debts that Britain imposed on India during the Raj.

These are eye-watering sums. But the true costs of this drain cannot be calculated. If India had been able to invest its own tax revenues and foreign exchange earnings in development – as Japan did – there’s no telling how history might have turned out differently. India could very well have become an economic powerhouse. Centuries of poverty and suffering could have been prevented.

All of this is a sobering antidote to the rosy narrative promoted by certain powerful voices in Britain. The conservative historian Niall Ferguson has claimed that British rule helped “develop” India. While he was prime minister, David Cameron asserted that British rule was a net help to India.

This narrative has found considerable traction in the popular imagination: according to a 2014 YouGov poll, 50 percent of people in Britain believe that colonialism was beneficial to the colonies.

Yet during the entire 200-year history of British rule in India, there was almost no increase in per capita income. In fact, during the last half of the 19th century – the heyday of British intervention – income in India collapsed by half. The average life expectancy of Indians dropped by a fifth from 1870 to 1920. Tens of millions died needlessly of policy-induced famine.

Britain didn’t develop India. Quite the contrary – as Patnaik’s work makes clear – India developed Britain.


What does this require of Britain today? An apology? Absolutely. Reparations? Perhaps – although there is not enough money in all of Britain to cover the sums that Patnaik identifies. In the meantime, we can start by setting the story straight. We need to recognise 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 sui generis from the steam engine and strong institutions, as our schoolbooks would have it, but depended on violent theft from other lands and other peoples.



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இந்தியாவில் இருந்து 45 டிரில்லியன் டாலர்களை பிரிட்டன் திருடியது மற்றும் அதைப் பற்றி பொய் சொன்னது எப்படி. -  டாக்டர் ஜேசன் ஹிக்கல் ( லண்டன் பல்கலைக்கழகத்தில் கல்வியாளர் & ராயல் சொசைட்டி ஆஃப் ஆர்ட்ஸின் உறுப்பினர்.

19 டிசம்பர் 2018

இந்தியாவின் காலனித்துவம் - அது இருந்ததைப் போலவே கொடூரமானது - பிரிட்டனுக்கு எந்தவொரு பெரிய பொருளாதார நன்மையும் இல்லை என்று பொதுவாக பிரிட்டனில் கூறப்படும் ஒரு கதை உள்ளதுஏதாவது இருந்தால்இந்தியாவின் நிர்வாகம் பிரிட்டனுக்கு ஒரு செலவாகும்ஆகவேபேரரசு இவ்வளவு காலமாக நீடித்தது - கதை செல்கிறது - பிரிட்டனின் தயவின் ஒரு சைகை.

புகழ்பெற்ற பொருளாதார நிபுணர் உட்சா பட்நாயக்கின் புதிய ஆராய்ச்சி - கொலம்பியா யுனிவர்சிட்டி பிரஸ் வெளியிட்டது - இந்த கதைக்கு ஒரு நொறுக்குத் தடியாகும்வரி மற்றும் வர்த்தகம் குறித்த ஏறக்குறைய இரண்டு நூற்றாண்டுகளின் விரிவான தரவுகளை வரைந்த பட்நாயக், 1765 முதல் 1938 வரையிலான காலகட்டத்தில் பிரிட்டன் இந்தியாவில் இருந்து மொத்தம் 45 டிரில்லியன் டாலர்களை வெளியேற்றியது என்று கணக்கிட்டார்.

மிஷநரி ஆட்சி இதை செய்தது எப்படி?

இது வர்த்தக அமைப்பு மூலம் நடந்ததுகாலனித்துவ காலத்திற்கு முன்னர்பிரிட்டன் இந்திய உற்பத்தியாளர்களிடமிருந்து ஜவுளி மற்றும் அரிசி போன்ற பொருட்களை வாங்கிசாதாரண வழியில் - பெரும்பாலும் வெள்ளியுடன் - வேறு எந்த நாட்டையும் போலவே செலுத்தியதுஆனால் 1765 ஆம் ஆண்டில் கிழக்கிந்திய கம்பெனி துணைக் கண்டத்தின் கட்டுப்பாட்டைக் கைப்பற்றி இந்திய வர்த்தகத்தில் ஏகபோக உரிமையை ஏற்படுத்திய சிறிது நேரத்தில் ஏதோ மாற்றம் ஏற்பட்டது.

இது எவ்வாறு செயல்பட்டது என்பது இங்கேகிழக்கிந்திய கம்பெனி இந்தியாவில் வரிகளை வசூலிக்கத் தொடங்கியதுபின்னர் அந்த வருவாயில் ஒரு பகுதியை (சுமார் மூன்றில் ஒரு பங்குபுத்திசாலித்தனமாக பிரிட்டிஷ் பயன்பாட்டிற்காக இந்தியப் பொருட்களை வாங்குவதற்கு நிதியளித்ததுவேறு வார்த்தைகளில் கூறுவதானால்இந்தியப் பொருட்களுக்கு தங்கள் சொந்த பாக்கெட்டிலிருந்து பணம் செலுத்துவதற்குப் பதிலாகபிரிட்டிஷ் வர்த்தகர்கள் அவற்றை இலவசமாக வாங்கினர்விவசாயிகளிடமிருந்தும் நெசவாளர்களிடமிருந்தும் “வாங்குதல்” அவர்களிடமிருந்து எடுக்கப்பட்ட பணத்தைப் பயன்படுத்தி.

இது ஒரு மோசடி - பெரும் அளவில் திருட்டுஇன்னும் பெரும்பாலான இந்தியர்களுக்கு என்ன நடக்கிறது என்று தெரியாதுஏனென்றால் வரிகளை வசூலித்த முகவர் தங்கள் பொருட்களை வாங்குவதைக் காட்டியவர் அல்லஅதே நபராக இருந்திருந்தால்அவர்கள் நிச்சயமாக ஒரு எலி வாசனை செய்திருப்பார்கள்.

திருடப்பட்ட சில பொருட்கள் பிரிட்டனில் நுகரப்பட்டனமீதமுள்ளவை வேறு இடங்களுக்கு மீண்டும் ஏற்றுமதி செய்யப்பட்டனமறு ஏற்றுமதி முறை பிரிட்டனின் தொழில்மயமாக்கலுக்கு இன்றியமையாத இரும்புதார் மற்றும் மரம் போன்ற மூலோபாய பொருட்கள் உட்பட ஐரோப்பாவிலிருந்து இறக்குமதி செய்ய நிதியுதவி செய்ய பிரிட்டனை அனுமதித்ததுஉண்மையில்தொழில்துறை புரட்சி இந்தியாவிலிருந்து இந்த முறையான திருட்டைப் பொறுத்தது.

இதற்கு மேல்ஆங்கிலேயர்கள் திருடப்பட்ட பொருட்களை மற்ற நாடுகளுக்கு முதலில் “வாங்கியதை” விட அதிகமாக விற்க முடிந்ததுபொருட்களின் அசல் மதிப்பில் 100 சதவீதத்தை மட்டுமல்லமார்க்அப்பையும் பாக்கெட் செய்தனர்.

1858 இல் பிரிட்டிஷ் ராஜ் பொறுப்பேற்ற பிறகுகாலனித்துவவாதிகள் வரி மற்றும் கொள்முதல் முறைக்கு ஒரு சிறப்பு புதிய திருப்பத்தைச் சேர்த்தனர்கிழக்கிந்திய கம்பெனியின் ஏகபோகம் முறிந்ததால்இந்திய உற்பத்தியாளர்கள் தங்கள் பொருட்களை நேரடியாக மற்ற நாடுகளுக்கு ஏற்றுமதி செய்ய அனுமதிக்கப்பட்டனர்ஆனால் அந்த பொருட்களுக்கான கொடுப்பனவுகள் லண்டனில் முடிவடைவதை பிரிட்டன் உறுதி செய்தது.


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