Ans: A

Exp:

Economic drain or drain theory refers to a portion of the national product of India which was not available for consumption of Indian people but was being drained away to Britain for political reasons and India was not getting adequate economic or material returns for it.

Statement 1 is correct: The drain of wealth checked and retarded capital formation in India while the same portion of wealth accelerated the growth of the British economy. The surplus from the British economy re-entered India as finance capital, further draining India of its wealth. This had an immense effect on income and employment potential in India.

Statement 2 is incorrect:  Dadabhai Naroji is his work ‘Poverty and UnBritish Rule in India’ expounded his drain theory. The major components of this drain were salaries and pensions of civil and military officials, interests on loans taken by the Indian Government from abroad, profits on foreign investment in India, stores purchased in Britain for civil and military departments, payments to be made for shipping, banking, and insurance services which stunted the growth of Indian enterprise in these services.

Ans: D

Exp:

Statement 1 is correct: The policy of divide and rule divided the people of India by putting princes against states’ people, region against region, province against province, caste against caste, and (religions) Hindus against Muslims. It was an unofficial policy of the British government which was ardently adhered by them till 1940’s.

Statement 2 is Incorrect: British looked for alliances with the most reactionary of social groups—the princes, zamindars, etc. The British intended to use them as a counterweight against nationalist-minded intelligentsia.

Statement 3 is correct : Notion of white superiority was maintained very carefully by the colonial rulers by systematically excluding the Indians from higher grades of services—both civil and military- from railway compartments, parks, hotels, clubs, etc., and by public display of racial arrogance through beatings, blows, and even murders (reported as accidents). As Elgin once wrote, “We could only govern by maintaining the fact that we were the dominant race—though Indians in services should be encouraged, there is a point at which we must reserve the control to ourselves, if we are to remain at all.”

Ans: A

Exp:

Indian agriculture witnessed commercialisation, yet remained underdeveloped under the British rule. Phased economic exploitation of the colony was the core motive for the British to establish their rule in the Indian subcontinent. The nature of this exploitation changed over the course of their reign, owing to changes within Britain, and these in turn had specific economic, social and political consequences for the colony. Most economic initiatives undertaken by the colonial state were couched in the language of development and ‘modernisation’, but they had a differential impact on the colony, often leading to backwardness rather than growth. And finally, most of these initiatives helped exploit the country’s resources to enable European industrialisation.

Ans: C

Exp:

The stages of economic colonisation of India under British rule were as follows:

First Stage: Period of Merchant Capitalism:  The Period of Merchant Capital (Mercantilism), often described as the Period of Monopoly Trade and Direct Appropriation (or the Period of East India Company’s Domination, 1757–1813), was based on two basic objectives:  to acquire a monopoly of trade with India, against other English or European merchants or trading companies as well as against the Indian merchants; and to directly appropriate or take over governmental revenues through control over State power.

Second Stage: Colonisation of free trade: Owing to its mode of exploitation being trade, this stage is

also termed as Colonialism of Free Trade. It started with the Charter Act of 1813 and continued till the 1860s. Now India was to serve as a market for the ever-increasing output of British-manufactured goods, especially textiles. At the same time, the new capitalists in England, needed from India exports of raw materials, especially cotton and foodgrains.

Third Stage: Era of Foreign Investment: The strengthening of colonial rule over India was meant to keep out the rivals as well as to attract British capital to India and secure it. As a result, a very large amount of British capital got invested in railways, loans (to the Government of India), trade and, to a lesser extent, in plantations, coal mining, jute mills, shipping, and banking in India. 

Ans: B

Exp:

Statement 1 is correct: The land revenue policies like permanent settlement exploited the peasant owing to their nature of allotment of the land to the Highest bidder, high rent, illegal extractions etc. They were exploitative and inhuman in their implementation.

Statement 2 is correct: Commercialisation of Agriculture opened Indian agriculture to the international market. Thus it also exposed it to the international price fluctuation. The deccan revolt of 1875 presented the plight of cotton growers post American civil war.

Statement 3 is incorrect: During British time certain specialised crops began to be grown not for consumption in the villages but for sale in the national and international markets. Commercial crops like cotton, jute, groundnut, oilseeds, sugarcane, tobacco, etc., were more preferred as they were more remunerative than foodgrains (or staple crops). The cultivation of crops like condiments, spices, fruits, and vegetables was to cater to a wider international market. Further, the commercialisation trend reached the highest level of development in the plantation sector.