Was India feudal?

Part - III

The introduction of railways and the telegraph was a big step forward, and paved the way for a commercial revolution in India. However, it failed to usher in an industrial revolution. Railways, roads, postal services and the telegraph unleashed a commercial revolution that was never seen before in the Subcontinent.

The internal trade between different provinces and regions increased manifold. This helped to develop new layers of mercantile classes and petty capitalists. But both classes emerged in the epoch of imperialist domination. So, they failed to play an independent role in bringing an industrial revolution.

The growth in trade and domestic market increased the size and influence of the mercantile class. Traders emerged as a new political force in the cities. The continued commercialisation and deep penetration of the market forces in society in both modern-day India and Pakistan are a legacy of that commercial revolution. The British made every attempt to ensure that the commercial transformation of India never resulted in an industrial revolution.

The commercial revolution further colonised the Indian economy. It increased the pace of the imperialist exploitation of raw materials and natural resources.

We have heard a great deal about foreign investment in India during that time. The fact is that it was far too little and aimed to serve the external market instead of the home market. Tsarist Russia received a large amount of foreign investment from European powers during the last decades of the 19th century while India received nominal foreign investment. The British imperialists focused mainly on protecting and furthering their own interests in India. In this process, they dealt severe blows to the Indian economy, society and the ruling class, which never fully recovered even after 70 years of independence. 

Despite the increase of Indian capital, British capital remained in effectively monopolist domination in the banking, commerce, exchange and insurance and shipping sectors as well as the tea, coffee, rubber plantations and jute industries. In the iron and steel sectors, Indian capital was forced to come to terms with British capital. Even in the cotton industry – which is the home of Indian capital – the control of British capital was dominant through the managing agency system.

In 1928 (before the Great Depression), British managing agents controlled a majority of the capital of cotton companies (50.3 percent). The economic depression – which affected Indian industries after 1929 – and the bankruptcy liquidations and difficulties of many Indian firms – which had arisen in the post-war period – were utilised by British capital to strengthen its hold on India’s industry.

The most decisive factor for the controlling power of British finance capital was the role of the foreign banking system that worked in conjunction with the government’s financial and exchange policies. Financial power remained monopolised in British hands through the Reserve Bank of India, the Imperial Bank and the big exchange banks. The Indian joint-stock banks held less than one-third of the bank deposits in India and were also invaded by British capital.

The main changes that the British made in Indian society were at the top. They replaced the repressive old state order and retrogressive aristocracy with an even more repressive bureaucratic-military establishment that was carefully designed by utilitarian technocrats. This establishment was quite efficient in defending and furthering the interest of the British.

British imperialism had the power to transform the Subcontinent from a medieval social and economic structure to a modern capitalist one. But they forged an alliance with same forces that had kept India socially and economically backward. The British failed to develop a progressive attitude and instead played a retrogressive role to keep India backward.

The British imperialists created economic, social and political conditions that made it impossible for the emergence and development of an indigenous and independent capitalist class which was free from the influence of imperialism and the crushing domination of British capital. Nearly 90 percent of British capital investment in India before the First World War was directed towards administration, transport, plantations and finance. The basic motive behind this investment and policy was the colonial construction of the Indian state and the commercial penetration of India, its exploitation as a source of raw materials and a market for British manufactures.

This was, in fact, one of the principal contradictions of the British imperialist policy in India. It is true that some sort of internal development was necessary to carry on with colonial exploitation. But the process involved in the crafty policy of colonial exploitation slackened the pace of development and thereby put the Indian economy in a state of perpetual underdevelopment. Colonial dependence had dealt a mortal blow to Indian agriculture, industry, trade and then to the socio-cultural fabric of the country.

The colonial factor also produced structural and institutional changes. This resulted in a lopsided industrial development rather than an industrial revolution. The British government did not make any effort to develop a heavy, basic and capital goods industries, which is the sound basis of industrialisation.

Modern industries, like the engineering and metallurgical industries, were almost non-existent. In the field of technology, it had to depend completely on the imperialist world. The British encouraged agro-based industries in India. This trend has continued in both India and Pakistan. Both countries have failed to develop heavy engineering steel industries.

The Indian comprador bourgeoisie created its class organisations considerably earlier than the proletariat. Therefore, headed by the comprador bourgeoisie and the landlords, the Indian National Congress captured the leadership of the national liberation movement.

In the struggle against British imperialism, the bourgeoisie were nothing but an unreliable and vacillating member that was always ready for compromise and betrayal. They have failed to play a progressive role and complete the tasks of national democratic revolutions after independence in both India and Pakistan. They have never been able to come out of the shadows of imperialism.

Concluded

The writer is a freelance journalist.