Ans: A

Exp:

Early Indian nationalists like Dadabhai Naoroji, M.G. Ranade and R.C.Dutt had expected Britain to undertake capitalist industrialization in India, but were deeply disillusioned with the results of colonial industrial policies. Consequently, they formulated a strong economic critique of colonialism in the late nineteenth century. Dadabhai Naoroji put forward the drain of wealth theory.

Constituents of Economic Drain:

This drain occurred through the interest that India paid for foreign debts of the East India Company, military expenditure, guaranteed returns on foreign investment in railways and other infrastructure, importing all stationery from England, ‘home charges’ paid for the Secretary of State in Britain and salaries, pensions and training costs of military and civilian staff employed by the British state to rule India. Even if this drain was a small fraction of the value of India’s total exports, if invested within the country, it could have helped generate a surplus to build a capitalist economy.

Expenditure on famine measures can not be considered a drain on India’s wealth.

Ans: C

Exp:

Pair 1 is correctly matched: G. Subramania Iyer, described as “the greatest Indian journalist of his generation”, founded The Hindu, an English language newspaper in 1878 with its headquarters at Chennai, Tamil Nadu. In his book ‘Some Economic Aspects of British Rule in India’ published in 1903, Iyer argued that India’s economic backwardness was an outcome of the colonisation of the Indian economy and not a continuance from its pre-colonial past. G. Subramaniya Iyer, along with Dadabhai Naoroji, M.G. Ranade, R.C. Dutt, and others, was one of the first nationalists to offer an economic critique of the British empire. 

Pair 2 is correctly matched: Dadabhai Naoroji was the originator of the ‘drain theory’. His book Poverty and Un-British Rule in India (1901) proved to be a major milestone in highlighting the exploitative economic policies of the British in India. 

Pair 3 is correctly matched: The Economic History of India was written by Romesh Chunder Dutt. The book covers almost the entire period of British rule in India-from the battle of Plassey in 1757 to the commencement of the 20th century.

Ans: D

Exp:

Exploitative economic changes of Britishers reversed the favourable balance of trade that India had enjoyed earlier. This phase laid the foundations of a classic colonial economy within India through the complex processes of commercialization of agriculture and deindustrialization. The passage of expensive, hand-crafted Indian textiles to Britain, which had been very popular there, was however obstructed by prohibitive tariff rates. It threw open Indian markets for the entry of cheap, mass-produced, machine-made British goods, which enjoyed little or almost no tariff restrictions. The British-Indian territory was developed as a source of foodstuff and raw material for Britain, which fuelled rapid growth in its manufacturing sector, crucial to the emergence of a powerful capitalist economy.

Ans: C

Exp:

Even though Indian villages were largely self-sufficient and imported little from outside and the means of communication were backward, extensive trade within the country and between India and other countries of Asia and Europe was carried on under the Mughals. India imported pearls, raw silk, wool, dates, dried fruits, and rose water. 

From the Persian Gulf region; coffee, gold, drugs, and honey from Arabia; tea, sugar, porcelain, and silk from China; gold, musk, and woollen cloth from Tibet; tin from Singapore; spices, perfumes, arrack, and sugar from the Indonesian islands; ivory and drugs from Africa; and woollen cloth, metals such as copper, iron, and lead, and paper from Europe.

India’s most important article of export was cotton textiles which were famous all over the world for their excellence and were in demand everywhere. India exported raw silk and silk fabrics, hardware, indigo, saltpetre, opium, rice, wheat, sugar, pepper, and other spices, precious stones, and drugs. Hence, options 1, 2, 3 and 5 are correct.

Ans: A

Exp:

It is often believed that the colonial administration encouraged the commercialisation of agriculture that improved the position of peasants in many areas of the Indian colony. From the 1860s onwards, the nature of agricultural production was determined by the demands of the overseas markets for Indian primary products. 

Statement 1 is incorrect: Commercialization, in fact, was a forced artificial process that led to very limited growth in the agricultural sector. It led to differentiation within the agricultural sector but did not create the figure of the ‘capitalist landowner’ as in Britain. The lack of any simultaneous large-scale industrial development meant that accumulated agrarian capital had no viable channels of investment for it to be converted into industrial capital.

Statement 2 is correct: Commercialization of agriculture increased the level of sub-infeudation in the countryside, and money was channelled into trade and usury. Initiatives to expand the productive capacity and organisation of agriculture were also a risky proposition, as the sector catered to a distant foreign market with wildly fluctuating prices, while the colonial state provided no protection to agriculturists.

Statement 3 is incorrect: The larger part of the profits generated by the export trade went to British business houses, which controlled shipping and insurance industries, besides commission agents, traders, and bankers.