CBSE Class 12-commerce Answered

The British rule in India is remembered for its destructive role. It lasted for about 200 years and was characterised by an organised exploitation of India's natural resources and wealth. The term drain of wealth was first used by Dadabhai Naoroji.

The trade policies adopted by the colonial government were mainly designed to promote its own economic interest and to exploit India's resources. The colonial government promoted free export of India's raw materials and duty-free import of British machine-made goods into India. This resulted in the generation of a huge export surplus, but it did not add anything to the wealth of the country (in the form of silver and gold). The net result of the policies during the British administration was large-scale open utilisation of India's resources. Indian resources were used to nourish the British industry. The huge surplus was used in the following ways:

• To cover the expenses of the new office set up in Britain
• To incur war expenses
• To meet the expenses on import of invisible items

Hence, it led to the drain of Indian wealth