It was in talking to a particularly feisty Islamic nut in Pakistan that I was reminded of the main undercurrent perceived of the colonial legacy in these parts, essentially its economic rape, primarily at the hands of the East India Company. There was an opinion shared by some that before British exploitation the Sub-continent had been as rich and progressive as anywhere on Earth, and given present day tensions it proved as a convenient avenue for more Western bashing, purportedly responsible for the majority of their woes. Here follows a condensed synopsis of the economic history as presented in a local magazine I chanced upon.
The extreme poverty of some 600 million people in India, Pakistan and Bangladesh is a source of embarrassment and shame for the entire world. This scribe has made an effort to examine the role of the West in its creation and perpetuation. Colonel John Briggs noted in 1830 that "the flourishing condition of the country under the Moghul Emperors is recorded by European travellers who visited the East within the last 3 centuries and the wealth, the population and natural prosperity of India, far surpassing what they had seen in Europe, filled them with astonishment".
However it was the extended rule of the British from 1757 to 1947 that brought the Indian economy to its knees, causing massive famines and multiplying poverty manifold during this period. The share of Indo-Pak in the world's GNP was reduced from 33 per cent to 3 per cent only. The rule left the biggest mass of poor in the world. Even after 59 years of independence the total number of poor in the region is estimated to be at 600 million.
The British East India Company was formed in 1600 with a capital of GBP70,000. In 1630 the company built Fort St. George in Madras, in 1687 it bought the island of Bombay from King Charles, and moved its factories there. In 1700 it made Calcutta its headquarters for Bengal. The French had a settlement at Pondicherry and between 1744 and 1763 the two powers fought for supremacy in the 3 Carnatic Wars. The first was won by the French but the last 2 by the British under Clive. By 1763 the Brititsh had no European rivals in India.
In order to make profit out of its rule the Company decided to have complete monopoly of trade on all profitable items like Opium, Salt, Alcohol etc and impose as much tax as possible on other items, without worrying about its long term ill effects on the people. Its sole objective of the rule was to earn money for the Company and provide jobs to the British citizens.
Its officers took away the bulk of the lucrative land trade thus depriving the locals from this means of livelihood. When trains were introduced it took away the transport business from the locals. During the 8 years of direct rule by the East India Company following the Battle of Plassy in 1757, the Company and its officials took away GBP 3.7 million as per British parliamentary records. Clive personally took GBP59,000 which made him so rich that he offered to work for free in future.
"No native prince demands the rent that we do" wrote Bishop Heber in 1826. "A land tax like that which exists in India" wrote Colonel Briggs in 1830, "professing to absorb the whole landlord's rent was never known under any government in Europe and Asia".
With the passage of time and expansion of the Empire the revenues grew. By 1830 the total income reached 66 million Rupees out of which 22 million was sent home as Home Office expenses and about 10 million as salary income of British Officers. Thus, 32 out of 66 million was remitted every year to the "richest" country in the world while by 1900 India had become the poorest country in the world - a result of 150 years of ruthless exploitation and looting by force of arms.
The Company demanded up to 90 per cent of rental income compared to 5-20 per cent collected in Ireland and England. The Company devised a very efficient and cruel tax collection system. The result was that no surplus was left with the peasants and landlords, and every crop failure led to famine.
The British manufacturers, in the words of the historian H.H. Wilson "employed the arm of political injustice to keep down and ultimately strangle a competitor with whom it could not have contended on equal terms". Gradually the very large cotton spinning and weaving, and other industries of India died down by the 1830s. As most of the government jobs were retained for the British, people had no other source of income other than agriculture and had no savings to rely on during crop failure. The famine after famine happened not because there was an overall shortage of food in the country. There were food surpluses in the neighbouring States while people died on the streets simply because people did not have money to buy food. Even if traders transported food from outside there was no purchasing power. This is the worst recorded human suffering in history.
While Asians were bound by their religious principles and high moral codes, the Europeans while paying lip service to Christianity, decided to free themselves of all rules and become rich at any cost. It was not the superior arms or military tactics which explains European success fully. Because except for naval power the arms and tactics were the same. It was their freedom from all moral bindings which gave them the edge.
In the case of Indo-Pak the British took away some 4 billion Rupees between 1757 and 1947 in the name of Home Office charges and Officers remittances (in todays terms this could be equal to GBP4,000 billion). The Asian share of world GNP was reduced as follows between 1757 and 1950.
Indo- Pak from 33% to 3%
China from 28% to 2%
Indonesia from 14% to 1%
British rule was beneficial in many aspects especially for Muslim Punjab and Baluchistan and the North West Frontier Provinces, present day Pakistan probably gained a lot from their rule. However, for India, Pakistan and Bangladesh as a whole, the economic consequence was not positive. There was a massive drain of resources from our land which added to the poverty of our people. However, we may not have had the English language. Instead Urdu or Chinese could have become the international business and science language, given the economic importance of India and China in the world GDP in 1757.