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Growth of Modern Industry and Capital Class during British Rule

Updated on December 23, 2012

The nationalists stressed on the destruction of the handicrafts sector as the chief cause underlying the poverty of India. They stressed on the protection, rehabilitation, reorganization, and modernisation of handicrafts as crucial for checking further regression in the material condition of the masses and for the economic revival of the country. At the same time, the Indian leaders recognized clearly that, as the experience of other countries indicated, in the modem age of mechanical appliances and large scale production no handicraft industry could successfully compete with modern industry. But, the Indian nationalists stressed upon a smooth transition from the handicraft industry to modern industry.

The Indian leaders hailed each and every step taken towards the introduction of new industries. Their battle cry was that 'we must become capitalists and enterprises., a nation of traders, machine-makers, and shop keepers'. The emphasis on industrialization as an agent of economic development was justified because the agricultural sector more or less reached its saturation point. Growth of industries would also reduce the 'drain' of wealth and loss of 'wages and capital' resulting from India's import of manufactures and export of raw materials. By the end of the 19th century, the demand for rapid industrialization of the country along modern lines assumed national proportions.

The plantation industries of indigo, tea and coffee were the first to be introduced in India. They were, however, exclusively European in ownership, and did not entirely depend on modern mechanical contrivances. The coming of railways heralded the entry of modern machines in India, and during the 1850s'. Cotton textile, jute, and coal-mining industries were started in India. As the latter two fields were primarily the preserve of European capital, Indian enterprise and hopes rested.mainly on cotton textile industry. The first cotton mill was set up in 1853, at Bombay, by an Indian (Naoroji) and first jute mill, was set up at Rishra (Bengal). In 1879, there were 56 cotton mills in India, largely concentrated in the Bombay presidency (employing nearly 43,000 persons). In 1882, there were just 20 jute mills, most of them in Bengal, employing nearly 20,000 persons. Thus, we find that by 1880 A.D. the extent of modern industry in India was extremely small. After 1880, there was a slow but continuous industrial expansion. By 1901-02, we had 36 jute mills and 206 cotton mills. In 1906, coal mining industry employed around 1 lakh persons. Other industries which grew were cotton gins and presses, rice, flour and tifftber mills, and mineral industries - Salt, mica, saltpetre, iron, etc.

The most important lacuna in the Indian industrial effort was the paucity of capital for the rising large scale industries of the country. Most money was canalized into trading, conspicuous consumption etc. Another important factor hampering the growth of modern industry in India was the lack of adequate technical education. Further the spirit of enterprise was not as dynamic as that of the British capitalists. The role of State also hindered rapid industrialization. The policy favored increased participation of foreign capital but the domestic industry was not protected as late as 1920s. The stores policy of the government, its tariff policy and credit policy also did not favor the growth of Indian industry. The reaction of the Indian leadership to this unhelpful attitude of the1 British Indian government manifested itself in the Swadeshi movement. Leaders like Gopalrao Deshmukh. Nabagopal Mitra, Justice Ranade, G.V. Joshi, Bhosonath Chandra etc. stressed on the development of Swadeshi industry. The Indian industries grew at a rapid rate during the world wars due to relaxation in government stores policy, tariff controls etc.,

The impact of modern industrial growth were - rise of a capitalist class (Tatas, Birlas, Premchand brothers, Jiyajee brothers, and Purshottam Thakurdas etc.), rise of worker class, industrial centres, etc. Under the British rule the modern industry replaced the indigenous handicraft industry. But, the replacement was not adequate and thus, resulted in a slow and lopsided industrial growth.


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    • Dim Flaxenwick profile image

      Dim Flaxenwick 

      6 years ago from Great Britain

      Fascinating. I found this extremey interesting and well written.

      Voted up , useful and interesting.

    • profile image


      6 years ago

      Good,efforts can be seen

    • profile image


      6 years ago

      ya nice


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