The Kiplings and India: A Collection of Writings from British India, 1870-1900

"The Poverty of India" (Dadabhai Naoroji, 1878)

[The following is an extract from Dadabhai Naoroji's influential pamphlet, which argued in essence that British colonialism was leading to the general impoverishment of Indian laborers. The present version of this text is an edited and corrected version of a raw OCR version of the text available on]
Extracts from Papers read before the Bombay Branch of the East India Association, April, and July 1876
While pointing out in these notes one of the unfavorable results of the present system of British administration, I do not for a moment mean to ignore the very bright side of British rule, and the many blessings of law and order which it has conferred on India. On the latter subject I have already expressed my sentiments on several occasions.
My object at present is to shew in greater detail what I have already stated before, that, under the present system of administration, India is suffering seriously in several ways, and is sinking in poverty. In my humble opinion, this is the question, or rather the most serious question, of the day. Whether I am right or wrong will be for you to judge, after hearing what I have to say. If I am right, I shall have discharged a duty as a loyal subject to urge upon our rulers to remedy this most serious evil. If, on the other hand, I am shown to be wrong, none will rejoice more than myself; and I shall have equally done a duty, as a wrong feeling of a serious character will be removed.
These notes were written two or three years ago. I lay them before you as they are. If necessary, I shall consider hereafter any modification that the light of subsequent events may suggest, either in confirmation or refutation of the views expressed in them. There will be a few repetitions from my former papers, but they are necessary in order to make these notes complete. I have endeavoured to avail myself as much as possible of the weight of official or other great authorities, and facts from official records; hence I shall have more quotations than might be thought suitable in an address before an audience; and my notes may prove dull, but I only hope they may be found of some importance to atone for such dullness. I may propose here that any discussion upon the notes may be deferred till they are all read, and my whole argument placed before you, or otherwise there will be confusion in the discussions.
It will be seen, from a comparison of the above figures, that, even for such food and clothing as a criminal obtains, there is hardly enough of production even in a good season, leaving alone all little luxuries, all social and religious wants, all expenses of occasions of joy and sorrow, and any provision for bad season. It must, moreover, be borne in mind that every poor labourer does not get the full share of the average production. The high and middle classes get a much larger share, the poor classes much less, while the lowest cost of living is generally above the average share.
Such appears to be the condition of the masses of India. They do not get enough to provide the bare necessaries of life.
On the subject of necessary consumption, I shall be very glad if some members of this Association, or others who possess or can ascertain the necessary information, will supply it, as I have not been able to make such minute and extended enquiries myself as I could wish.
The total imports and exports of the United Kingdom for the years
1858 to 1870 are —
Imports £3,608,216,242 (including Bullion)
Exports £2,875,027,301 ( “ “ )
This shows an excess of imports over exports of £733,188,941, the imports are above 25 per cent, greater than the exports.
This excess is to be increased to the extent of about £125,000,000, the balance of loans to India included in the exports, less interest on these loans included in imports of about  £60,000,000, and by such further amounts as may be made up by balances of loans and interests with foreign parts. As England is the greatest lending country in the world, the ultimate result of excess of commercial imports over commercial exports will most probably be above, rather than under, £733,500,000, or 25 per cent, of exports. At all events, it will not be less than 15 per cent.
For British North America, the total imports and exports, including bullion, for the years 1854 to 1868, are —
Imports £200,257,620
Exports £154,900,367
This shows an excess of imports over exports of £45,357,253, i.e., the imports are about 29 per cent, more than the exports, subject to a modification of the extent to which it has received from, or given loan to, foreign parts. As far as I can see, it is a borrower, and the excess to that extent will be lesser.
Now we must see what the case is with India. The exports of India for the years 1835 to 1872 being about £1,120,000,000, the imports, with an addition of 15 per cent, to exports for profits (of about £168,000,000), should be about £1,288,000,000. Besides this, India has incurred to foreign parts a debt of about £50,000,000 for the public debt, and about £100,000,000 for railways, during the same period.
Now, on the other hand, in return for the exports, plus profits, of £1,288,000,000, and £150,000,000 of the loans, India has actually imported, during the last 38 years, from 1835 to 1872 (not, as would be the case in a normal condition, £1,430,000,000, but) only about £943,000,000, leaving a balance of about £500,000,000, which England has kept back as its benefit, chiefly arising from the political position it holds over India. This is without including any interest at all. Towards this drain, the net opium revenue contributed by China amounts to about £141,000,000. The balance, of about £360,000,000, is derived from India's own produce and profits of commerce. The profits of commerce are, say, about £168,000,000. Allowing, then, the whole opium revenue and the whole profit of commerce as having gone towards the drain, there is still a deficiency of nearly £200,000,000 which must have gone out of the produce of the country. Deducting from this £200,000,000 the interest on railway loans remitted to England, the balance still sent from the very produce of the country is about £144,000,000. Strictly speaking, the whole £200,000,000 should be considered as a drain from the very produce of the country, because it is the exhaustion caused by the drain that disables us from building our railroads, &c., from our own means. If we did not suffer the exhaustion we do, and even then if we found it to our benefit to borrow from England, the case would be one of a healthy natural business, and the interest then remitted would have nothing to be deplored in it, as in the case of other countries, which, being young, or with undeveloped resources, and without much means of their own, borrow from others, and increase their own wealth thereby, as Australia, Canada, the United States, or any other native-ruled country that so borrows. However, as matters stand at present, we are thankful for the railway loan, for in reality that, though as a loan (with the profits during the American War), has revived us a little. But we are sinking fast again. Allowing for the railway interest as a mere matter of business, and analysing the deficit of imports, or drain to England, as only about £453,000,000, the following is the yearly average for every five years : —
Yearly              Average.
Years. £
1835 to 1839   5,347,000
1840 „ 1844    5,930,000
1845 ,, 1849    7,760,000
1850 ,, 1854    7,458,000
1855 ,, 1859    7,730,000
1860 ,, 1864    17,300,000
1865 ,, 1869    24,600,000
1870 ,, 1872    27,400.000
Now, can it be shown by anybody that the production during these 38 years has been such as to leave the same amount per head every year, and surplus besides to make up the above £200,000,000 taken away from the produce of the country, in addition to opium revenue and profits of commerce .^ In that case it will be that India is no better off now, but is only in the same condition as in 1834. If it can be shown that the production of the country has been such as to be the same per head during all these years, and a surplus greater than ;£200,000,000 besides, then will it be that any material benefit has been derived by India to the extent of such excess of surplus over ;£200,000,000. It must, however, be remembered that, in the years about 1834, the condition of the people had already gone down very low by the effects of the previous deficits, as will be seen further on from the official opinions I have given there.
The benefit to England by its connection with India must not be measured by the £500,000,000 only (not including interest) during the last 38 years. Besides this the industries of England receive large additional support for supplying all European 'stores which Government need, and all those articles which Europeans want in India from their habits and customs, not from mere choice, as may be the case with natives. All the produce of the country, thus exported from sheer necessity, would otherwise have brought returns suitable to native wants, or would have remained in the country, in either case, to the benefit of the produce or industry of India. Be it clearly borne in mind that all this additional benefit to English industries is entirely independent of, and ,in addition to, the actual deficit between the export, plus profits and imports. Everything I allude to is already included in the imports. It is so much additional capital drawn away, whether India will or no, from the industry of India to the benefit of English industry. There is, again, the further legitimate benefit to England of the profits of English firms there carrying on commerce with India, the profits of the shipping trade, and insurance. The only pity — and a very great one too — is that the commerce between England and India is not so large as it should and can be, the present total exports of India to all the outside world being only about 5s. a head, while the exports of the United Kingdom are about £6 10s. a head, of British North America about £3 a head, and of Australia about £19 a head, including gold (and exclusive of gold, about £11 a head). Again, what are imports into India from the United Kingdom, including treasure, Government stores of every kind, railway and other stores, articles for European consumption, and everything for native consumption and use? ' Only less than 3s. a head, as below : —
Total Imports, including Treasure, into India from the United Kingdom.
1869... £35,309,973
1870. ..£30,357,055
1871... £28,826,264

[Say 32,000,000 on an average, for a population of about 225,000,000, or less than 3s. a head]
(Parliamentary Return [c. 587] of 1872, page 16—Trade and Navigation Returns of the United Kingdom).
What a vast field there is for English commerce in India! Only £1 a head will be equal to nearly the whole present exports of the United Kingdom to all parts of the world. There is one further circumstances against British-Indian subjects, which will show the actual drain from the produce of the country of more than £200,000,000 as borne by British India. The exports from India do not all belong to British India; a portion belongs to the Native States. These States naturally get back their imports equal to their exports, plus profits—less only the tribute they pay to British India, of only about £720,00 altogether per annum, of which even a portion is spent in their own States. No account can I take here of the further loss to India (by famines) of life and property, which is aggravated by the political exhaustion. It is complained that England is at the mercy of India for its loan of some £200,000,000, but let it be borne in mind that, within the next few years, that sum will have been drawn by England, while India will continue to have its debt over its head.
The figures of the deficit previous to 1834 I cannot get. I hope the India Office would prepare a table similar to this for this previous period, in order that it may be ascertained how India had fared materially under British rule altogether.
The effect of the deficit is not equally felt by the different presidencies. Bengal suffers less than the others on account of its permanent settlement. I do not mean that as any objection to such settlement, but I state it merely as a fact.
The Court of Directors, in the year 1858, deliberately put forth before the Parliament and public of England the statement (Parliamentary Return No. 75 of 1858) that "the great excess of exports above imports is being regularly liquidated in silver." Now, is it not India's misfortune that not one man in the India House pointed out how utterly incorrect, misleading, and mischievous this statement was ? Now, Mr. Laing makes the following statement before the present Finance Committee : — " Question 7660 of 2nd Report — Would it not be correct to state that the difference between the value of the exports from India, and the imports into India, which now amount, I think, to the sum of about £20,000,000, represents the tribute which India annually pays to England? Answer.— No, I think not ; I should not call it a tribute when there is a balance of trade of that sort between the two countries. There are many other countries which are in the same condition of exporting considerably more than they import from one particular country, and the balance of trade is adjusted either by other payments which have to be made, or by transactions through third countries, or finally by remittance of bullion."
First of all, the question was not about India's commerce with any particular country, but about all its exports and imports. And next, taking his answer as it is, it is altogether incorrect and inapplicable to India, as must be evident from the facts I have already laid before you.
Next comes Mr. Maclean. He is reported to have said before this Committee something to the effect that, if we compare India, for instance, with the United States, which can hardly be called a country that is being drained of its natural wealth, we will find that the excess of exports over imports in the United States is very much greater than the corresponding excess in India. Now, let us see what the facts are. I have prepared a table, and have taken the figures from the year 1795 — the earliest I could get. From the totals I have excluded the years 1802-6, 1808-14, 1818-20, because the imports for them are not given, and the years 1863-6 for reasons well known (the American War). The result till 1869 (I cannot get later authentic figures) is not, as Mr. Maclean says, that "the excess of exports over imports in the United States is very much greater than the corresponding excess in India," but that the excess oi imports over exports is about $493,000,000 till 1847, and £43,000,000 from 1848-69, excepting the years I have mentioned above ; and if all the necessary modifications from various other circumstances be made, the excess of the imports will be found necessarily much greater. In fact, the United States are no exception to the ordinary laws of political economy, in a country where the rule is a native, and not a foreign, one. I have made up my tables from Parliamentary Returns.
The deficits of £500,000,000 in imports, do not, as I have already explained, show the whole drain ; for the English stores, whether Government or private, are all already included in the imports, nor is any interest calculated. With interest, the drain from India would amount to a very high figure.
This drain consists of two elements — first, that arising from the remittances by European officials of their savings, and for their expenditure in England for their various wants both there and in India ; from pensions and salaries paid in England ; and from Government expenditure in England and India ; and the second, that arising from similar remittances by non-official Europeans.
We may draw our own inferences about the effects of the drain, but I give you below official opinions on the subject, from early times to the present day, for each presidency.
Sir John Shore, in 1787, says, in his famous minute (appendix to 5th report Parliamentary Return No. 377 of 1812) : —
" 129. . . . . . Secondly, it is a certain fact that the zemindars are almost universally poor. . . Justice and humanity calls for this declaration.
“130 . . . . I do not, however, attribute this fact to the extortions of our Government, but to the causes which I shall hereafter point out, and which will be found sufficient to account for the effect. I am by no means convinced that the reverse would have taken place if the measure of our exactions had been more moderate.
"131. Thirdly, the Company are merchants, as well as sovereigns of the country. In the former capacity they engross its trade, whilst in the latter they appropriate the revenues. The remittances to Europe of revenues are made in the commodities of the country which are purchased by them.
"132. Whatever allowance we may make for the increased industry of the subjects of the State, owing to the enhanced demand for the produce of it (supposing the demand to be enhanced), there is reason to conclude that the benefits are more than counterbalanced by evils inseparable from the system of a remote foreign dominion.
"135. Every information, from the time of Bernier to the acquisition of the Dewani, shows the internal trade of the country, as carried on between Bengal and the upper parts of Hindustan, the Gulf of Moro, the Persian Gulf, and the Malabar Coast, to have been very considerable. Returns of specie and goods were made through these channels by that of the foreign European companies, and in gold direct for opium from the eastward.
"136. But from the year 1765 the reverse has taken place. The Company's trade produces no equivalent returns, specie is rarely imported by the foreign companies, nor brought into Bengal from other parts of Hindustan in any considerable quantities.
"141. If we were to suppose the internal trade of Hindustan again revived, the export of the production of the country by the Company must still prevent those returns which trade formerly poured in. This is an evil inseparable from an European government."
Page 194. — " A large proportion of the rents of the country are paid into the Company's treasury, and the manufactures are applied to remit to England the surplus which remains after discharging the claims on this Government, and to augment the commerce and revenue of Great Britain."
Lord Cornwallis' minute on land settlements, dated 10th February, 1790, says : — The consequence of the heavy drain of wealth from the above causes {viz.,  large annual investment to Europe, assistance to the treasury of Calcutta, and to supply wants of other presidencies), with the addition of that which has been occasioned by the remittances of private fortunes, have been for many years past, and are now, severely felt, by the great diminution of the current specie, and by the languor which has thereby been thrown upon the cultivation and the general commerce of the country."
The East India Company, on finding the provinces of Bengal and Behar continuously deteriorating, caused a long and minute survey of the condition of the people. This survey extended over nine years, from 1807 to 1816. The reports, however, lay buried in the archives of the India House, till Mr. Montgomery Martin brought them to light. He sums up the result of these official minute researches in the following remarkable words (vol. I., page 11) :— " It is impossible to avoid remarking two facts as peculiarly striking— first, the richness of the country surveyed ; and, second, the poverty of its inhabitants."
Before proceeding further, I must first say that the drain to which these great men have referred was much less than at present. I give the figures in Mr. Martin's words (page 12) :— "The annual drain of £3,000,000 on British India has amounted in 30 years, at 12 per cent, (the usual Indian rate) compound interest, to the enormous sum of ;£723,900,000 sterling. . . So constant and accumulating a drain, even in England, would soon impoverish her. How severe, then, must be its effects on India, where the wage of a labourer is from two-pence to three-pence a day."
In volume III., page 4., &c., alluding to the nine years' survey, Mr. Martin says that the obscurity to which such a survey was consigned was to be deplored, "and can only be accounted for by supposing that it was deemed impolitic to publish to the world so painful a picture of human poverty, debasement, and wretchedness ; " and Mr. Martin draws many other painful conclusions.
Coming down to later times, Mr. Frederick John Shore, of the Bengal Civil Service, has left us the following account of the condition of the people in 1837 (vol. II., page 28): — "But the halcyon days of India are over ; she has been drained of a large proportion of the wealth she once possessed, and her energies have been cramped by a sordid system of misrule to which the interests of millions have been sacrificed for the benefit of the few." "The gradual impoverishment of the people and country, under the mode of rule established by the British Government, has," &c., &c
"The English Government has effected the impoverishment of the country and people to an extent almost unparalleled."
For the manner in which the cotton industry of India was destroyed, see note at page 37 of the same volume. In his concluding remarks (vol. II., page 516), Mr. Shore says : — "More than seventeen years have elapsed since I first landed in this country ; but on my arrival, and during my residence of about a year in Calcutta, I well recollect the quiet, comfortable, and settled conviction, which in those days existed in the minds of the English population, of the blessings conferred on the natives of India by the establishment of the English rule. Our superiority to the native Governments which we have supplanted ; the excellent system for the administration of justice which we had introduced ; our moderation ; our anxiety to benefit the people — in short, our virtues of every description — were descanted on as so many established truths, which" it was heresy to controvert.' Occasionally I remember to have heard some hints and assertions of a contrary nature from someone who had spent many years in the interior of the country ; but the storm which was immediately raised and thundered on the head of the unfortunate individual who should presume to question the established creed, was almost sufficient to appal [sic] the boldest.
"Like most other young men who had no opportunities of judging for themselves, it was but natural that I should imbibe the same notions ; to which may be added, the idea of universal depravity of the people, which was derived from the same source."
After stating how his transfer to a remote district brought him into intimate contact with natives, how he found them disaffected towards British rule, and how this conviction in spite of himself was irresistible, he says: — "This being the case, an attempt to discover the reasons for such sentiments on the part of the native population, was the natural result. Well-founded complaints of oppression and extortion, on the part of both Government and individuals, were innumerable. The question then was, why, with all our high professions, were not such evils redressed? This, however, I was assured, was impossible under the existing system; and I was thus gradually lead to an enquiry into the principles and practice of the British-Indian administration. Proceeding in this, I soon found myself at no loss to understand the feelings of the people both towards our Government and to ourselves. It would have been astonishing indeed had it been otherwise. The fundamental principle of the English had been to make the whole Indian nation subservient, in every possible way, to the interests and benefits of themselves. They have been taxed to the utmost limit ; every successive province, as it has fallen into our possession, has been made a field for higher exaction ; and it has always been our boast how greatly we have raised the revenue above that which the native rulers were able to extort. The Indians have been excluded from every honor, dignity, or office which the lowest Englishman could be prevailed upon to accept.
"Had the welfare of the people been our object, a very different course would have been adopted, and very different results would have followed ; for, again and again I repeat it, there is nothing in the circumstance itself, of our being foreigners of different colour and faith, that should occasion the people to hate us. We may thank ourselves for having made their feelings towards us what they are."
In vol. I., page 162, Mr. Shore says : — " The ruin of the upper classes (like the exclusion of. the people from a share in the Government) was a necessary consequence of the establishment of the British power ; but had we acted on a more liberal plan, we should have fixed our authority on a much more solid foundation."
Colonel Harriot, at the East India Association meeting in July last, referring to Bengal, said : — " But he had no doubt that he accurately quoted the words of the present Lieutenant-Governor of Bengal in saying that the mass of the population is probably poorer, and in a lower social position, than any in India."
The "Material and Moral Progress" for 1871-2 (page 100) says that “the Calcutta missionary conference had dwelt on the miserable and abject condition of the Bengal ryots, and there is evidence that they suffer many things, and are often in want of absolute necessaries."
Mr. Saville Marriot, "one of the Commissioners of Revenue in the Deccan," and afterwards a Member of Council, says in 1836, in his letter to Sir R. Grant : — " You will readily conceive that my opinions are the result rather of practical experience than deduction drawn from scientific views
"For many years past, I have, in common with many others, pain- fully witnessed their decline [the people's] ; and more especially that part of the community which has emphatically been styled the "sinews of the State " — the peasantry of India. It is not a single, but a combination of causes, which has produced this result. Some of these are, and have been from the beginning, obvious to those who have watched with attention the development of the principles of our rule in relation to such as have been superseded, become blended with our s>'Stem, or are opposed to it in practical effect. Others are less apparent, and some complex ; whilst another class of the decline may possibly be involved in obscurity.
"It is a startling but too notorious a fact, that, though loaded with a vastly greater absolute amount of taxation, and harassed by various severe acts of tyranny and oppression, yet the country was in a state of prosperity under the native rule, when compared with that into which it has fallen under the avowedly mild sway of British administration. Though, in stating the subject, I have used the expression "a vastly greater absolute amount of taxation," yet I would beg to be under- stood as being fully aware those terms must be treated in a qualified sense, since it is manifest that, relatively viewed, a smaller numerical amount of taxation may, with reference to the means of payment, be, in point of fact, more burdensome than a much larger one where the resources are more adequate to the object. But, in the particular case in point, it is, I believe, ability which has diminished ; and that, too, to many grades below the proportionate fall in the pecuniary amount of fiscal demand. To the pecuniary injurious result are also to be added the many unfavourable circumstances inseparable for a time from a foreign rule. In elucidation of the position that this country is verging to the lowest ebb of pauperism, I would adduce a fact pregnant with considerations of the most serious importance, namely, that of late years a large portion of the public revenue has been paid by encroachment upon the capital of the country, small though that capital is in itself. I allude to the property of the peasantry, which consists of personal ornaments of the precious metals and jewels, convertible, as occasions require, to profitable purposes, and accommodations in agricultural pursuit, most frequently in the shape of pawn, till the object has been attained. I feel certain that an examination would establish that a considerable share of this and other property, even to cattle and household utensils, has been for ever alienated from its proprietors to make good the public revenue. In addition to this lamentable evidence of poverty, is another of equal force, to be seen in all parts of the country, in the numerous individuals of the above class of the community wandering about for the employment of hirelings, which they are glad to obtain even for the most scanty pittance. In short, almost everything forces the conviction that we have before us a narrowing progress to utter pauperism.
Mr. Marriot in another place (page 11) says : — " Most of the evils of our rule in India arise directly from, or may be traced to, the heavy tribute which that country pays to England."
And with regard to this tribute, he quotes the Chairman of a Court of Proprietors held on the 28th February, 1845, as follows: — "India paid to the mother country, in the shape of home charges, what must be considered the annual tribute of £3,ooo,ooo sterling; and daily poured into the lap of the mother country a continual stream of wealth in the shape of private fortunes." To this should be added all earnings of Europeans, except what they spent in India for Indian supplies; which would show that there is something far beyond even private fortunes which is continuously poured into the lap of England.
Mr. Marriot goes on to say: — "It will be difficult to satisfy the mind that any country could bear such a drain upon its resources without sustaining very serious injury. And the writer entertains the fullest conviction that investigation would effectually establish the truth of the proposition as applicable to India. He has himself most painfully witnessed it in those parts of the country with which he was connected, and he has every reason to believe that the same evil exists, with but slight modification, throughout our Eastern empire."
Again says Mr. Marriot (page 17): — "A different state of things exists in the present day on that point; and, though the people still, and gratefully so, acknowledge the benefits they have derived from the suppression of open violence, yet they emphatically and unanswerably refer their increasing penury as evidencing the existence of a canker-worm that is working their destruction. The sketch which I have given shows a distressing state of things; but lamentable as it may appear, I would pledge myself to establish the facts advanced, and that the representation is not overdrawn."
Mr. Robert Knight says: — "Mr. Giberne, after an absence of fourteen years from Guzerat, returned to it, as judge, in 1840. " Everywhere " — he told the Commons Committee on Cotton Cultivation in 1848— "he remarked deterioration," and "I did not see so many of the more wealthy classes of the natives. The aristocracy, when we first had the country, used to have their gay carts, horses, and attendants, and a great deal of finery about them, and there seems to be an absence of all that. . . . The ryots all complain that they had had money once, but they had none now.”
In a private letter, dated 1849, "written by a gentleman high in the Company's service," and quoted in a pamphlet in 1851, the decay of Guzerat is thus described : — "Many of the best families in the province, who were rich and well to do when we came into Guzerat in 1807, have now scarcely clothes to their backs. Our demands in money on the talookdars are more than three times what they originally paid, without one single advantage gained on their parts. Parties, from whom they have been compelled to borrow at ruinous rates of interest, enforced their demands by attachment of their lands and villages; thus they sink deeper and deeper in debt, without the chance of extricating themselves. What, then, must become of their rising family?”
Lieutenant A. Nash, after giving a table of the prices of grain from 1809 to 1838 in Indapore (Bombay Government Selections, No. 107, New Series, page 118), says : — "The table is chiefly interesting in showing the gradual diminution in the price of corn from the days of the Peishwas to our own. By comparing the prices at the commencement with those at the end of the table, and then reading the list over, this circumstance will become apparent." I give this table in my notes on prices.
[Pamphlet continues]

This page has paths:

This page has tags: