Monday, November 30, 2009

IMPACT ON INDUSTRY AND TRADE

IMPACT ON INDUSTRY AND TRADE

While the British policies pushed traditional industries out of business, nothing much was done initially to fill the vacuum with modem industrial development. Whatever industries came into being were owned or controlled by British capital. The only industry in which Indians had fair share was that of cotton. At this stage the industries were confined to cotton, jute, coal, mining and plantation-based industries such as tea and indigo. There was no capital goods or heavy industry. It was only in the twentieth century that industry diversified into paper, glass, sugar, cement, matches, and chemicals. The Tata Iron and Steel Company was established (1907).

The First World War provided a fresh impetus to the process of industrialisation. It can be said that the British were forced by circumstances to permit introduction of modem industries in India due to the exigencies of the time.
The growth of modem industry in India was accom­panied by the rise of a capitalist class. The process was slow as India lacked capital and resources for big industries. The absence of necessary banking and credit facilities during the earlier part of British rule also stood in the way of growth of the capitalist class. But later on Indian traders and financiers were encouraged by the experience of the British capitalists who had invested huge amounts in India and made enormous profits. Industrial development also saw the rise of the modem working class.
Gradually, import substitution increased as indigenous industry made inroads first into consumer and then into capital goods. The outbreak of the Second World War helped Indian industrial growth, as the demands of war had to be met. However, India always lagged in the technologi­cal base as no encouragement was given by the government. The industrial development, moreover, was lopsided, and regional disparities grew.

The British have been praised for having established a good railway system in India. Private companies initially, and later on the government itself took up the building of railways. But the lines favoured British economic needs, as did the system of roadways. Major cities, ports and markets were linked to facilitate the export of raw materials and import of British manufactured items.

Foreign trade was again designed to benefit the British economy rather than that of India. Indian capital in the initial stage was engaged in activities such as import and distribution of piece goods and other manufactured items, while primary produce and raw materials were supplied to European companies for processing. The only important manufactured item exported from India was jute products. Where once Indian textiles had dominated foreign markets, now India was importing machine-made cloth. The opening of the Suez Canal, introduction of steamships, the construc­tion of railways benefited trade which showed a favourable balance for India. But the balance was used up in paying various dues charged by Britian in the form of cost of shipping and other services, and the Secretary of State's establishment-what were known as "Home Charges".

It was only in the twentieth century that Indian trade links extended to USA, Germany and Japan.

No comments:

Post a Comment