DMPQ: Home charges is one of the major component of drain of wealth. In this context please explain home charge and also list down the effect of drain of wealth.

East India company took away part of Indian resources and wealth and in reciprocity they offer no return. This continuous drain made India Impoverished . The major component of drain of wealth was home charges:

Home charge is the expenditure carried out by company before 1858 and by British government  after 1858 . It includes dividend paid to the share holder of the company, interest paid by company on the loans raised in London. Salary and pensions of officials working in London. Pensions of officials worked in India but had retired to London.

Impact of drain of wealth:

  • The part of national income not available for Indian people. It could have been utilised for the development of Indians.
  • The wealth could be the source of capital investment.
  • It ruined the Indian Handicrafts industries because of exploitative economic policies of Britishers. The policies were crafted in a way to serve british interest.
  • It help to fund industrial revolution back in England.
  • Extreme drain led to impoverishment of India. Poverty, famine and unemployment were the major implications.
  • Later on congress raised this issue and demanded Indianisation of services and hence in one way it lead to Nationalism.

 

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