A Scam That Lasted for Two Centuries
How much money did the British Raj siphon out from India? How did they do it? And why didn’t the Indians stop them from doing so?
“It’s been over 70 years bro, what difference does it make?”
What’s there for India in the years ahead? This depends on where India has come from. And India’s history is filled with a scam. This article will talk about the world’s biggest scam. A scam where real things disappeared from India and at the same time filled the British coffers out of nowhere.
“The Englishmen flourishes, acts like a sponge, drawing up riches from the banks of the Ganges, and squeezing them down upon the banks of the Thames.” — John Sullivan, founder of the British Settlement of Ootacamund (Ooty), 1840.
But India saw huge development during the British Raj as well, right? The British gave us railways, education, and English. So, we can comfortably say that the British Raj wasn’t really that bad for India. Even after 7 decades of India’s independence, many people — about 59% justify the British colonization with this statement. And it sounds correct logically.
However, the true picture flashes only when we ask this question,
“Why Did British Introduce the Trains in the First Place?”
When British colonialism had spread all over the world, India became a central hub for them. And having a strong transportation network worked in their favor more than the Indians! And who bore the expenses for the railway network construction? Of course, the Indians! It benefitted the British, while the Indians paid for it.
Between 1854 and 1947, 14, 400 trains were imported from Britain into India. Moreover, the railways mostly employed the British; from a ticket collector to a high-rank officer they ensured that all the earnings will go to the pockets of a Britisher. And still, Indians believe the railways were meant for their own benefit.
With the passage of time, Britain got richer and India got poorer.
How did this happen?
Dadabhai Naoroji began researching on this ransack, and he found out a staggering fact. Between 1835 and 1872 — less than 40 years — goods worth 13 million pounds were imported by Britain from the Indian merchants. And those merchants were not paid even a single penny for this.
This is called the ‘Drain Theory’. To ensure this degree of ‘drain’, the British needed a network, and this network was the Indian railways.
Britain was a small country that contributed less than 2% of the world’s GDP. At the same time, India contributed around 25% of the world’s GDP, which plunged to 4% just after the country’s independence. The biggest source of British revenue and the largest importer of British goods was India. And this is possible only when the existing economy was destroyed.
By de-industrialization. If import-export activities happen via the sea route, destroy the native shipbuilding industry. Chhatrapati Shivaji Maharaj leveraged indigenous ships to defend India against the Portuguese invaders. The Imperial Chola Navy went all the way to Indonesia. Undoubtedly, India’s navy was its strength!
Surat, Bengal, and Calicut (now Kozhikode) were hubs for shipbuilding businesses that were destroyed by the British. Similarly, small-scale industries and agriculture were devastated as well.
When the British came to India, they wrecked India’s handloom industry. Weavers were compelled to sell their products only to the British. And the selling price was arbitrarily kept so low that the weavers could not recover their own expenses.
People in Odisha and Assam were forced to cultivate poppy or Khus-khus — the raw material for opium. The British utilized this opium to intoxicate China.
British were those uninvited guests who took taxes from Indians, controlled India’s currency, and decided the value of its goods themselves as well.
No doubt, this is the biggest scam of all time. There are 3 steps to this scam:
1. If any foreign trader wanted to purchase India-made goods, they had to purchase Special Council Bills (SCB). This was a special currency on which the British Crown had complete control.
2. To purchase these SCBs, the payment was accepted in gold or silver only. In simple terms, take actual material in exchange for a piece of paper.
3. These SCBs had no real value in India. People in India required Indian rupees to purchase goods and services.
Shockingly, the exchange rate for an SCB too was decided by the British themselves. And this money came from the taxes the Indians paid. Real value from India was getting drained abroad and Britain’s value was increasing. But such a scam can only be successful when some smart brains who could actually expose such scams were under British control.
So, Britain began the world’s largest brainwashing campaign, which is also known as English Education.
“We must at present do our best to form a class who may be interpreters between us and the millions whom we govern; a class of persons, Indian in blood and colour, but English in taste, in opinions, in morals, and in intellect.” — Thomas Babington Macaulay, Minute on Indian Education.
What was the impact of this brainwashing campaign on the Indian economy?
The problem isn’t that the British began teaching with English as a medium of education. The problem is, through their education, they managed to convince the Indians that their principles, morals, and lifestyle are ideal!
Purchasing British goods became a status symbol. The locals looked Indian but copied the British in their lifestyle and thoughts. That’s how Indians became their slaves — slaves who didn’t take money from them but gave them money. And Indians never understood this.
India paid Rs. 1 crore for the construction of the Victoria Memorial, and Rs. 17 crores for world war gratuities. That’s how the value of the world’s biggest scam kept soaring.
The value of this scam in today’s time is — a whopping $45 Tn! — estimated by renowned economist Utsa Patnaik. This value is about 17x the present annual GDP of Britain. Even if Britain wants, it can’t pay India the compensation for this loot.
So, Should India Lock its Horns with Britain?
Not at all! History is neither for excuses nor for revenge. It just serves as a reminder that over 7 decades back, the British left India as one of the poorest countries.
Today, India is the 5th largest economy in the world, much ahead of Britain. The East India Company (EIC) that ransacked India for nearly two centuries is now owned by an Indian entrepreneur — Sanjiv Mehta.
Today, British companies seek India’s help in making vaccines, and Indian companies are glad to help them as well. Because India’s principle has always been simple “Forgive but don’t forget”.
German history also has unfortunate parts just like British history. German atrocities on the Jews during WW II are well documented. But today, Germany’s greatness lies in one thing that they don’t hide their past. The concentration camps that were the centers of torture now allow people in for free, accepting all the mistakes that happened in the past.
In my opinion, every great nation needs to learn something from Germany so that mistakes are not repeated. Even after the $45 Tn scam, India has more to offer and is rapidly growing — the country is now much bigger than this figure.