Q48 (CAPF/2012) History & Culture › Modern India (Pre-1857) › Colonial economic impact Answer Verified

Statement I : The economy of India in the 19th century came to a state of ruin under the English East India Company. Statement I : The English East India Company’s acquisition of Diwani right led to the miseries of the peasants and those associated with the traditional handicrafts industry of India.

Both the statements are individually true and Statement II is the correct explanation of Statement I

Both the statements are individually true but Statement II is not the correct explanation of Statement I

Statement I is true but Statement II is false

Statement I is false but Statement II is true

Result

Your answer: — · Correct: A

Explanation

Statement I is true as the 19th-century Indian economy suffered a severe decline under the East India Company, characterized by deindustrialization and the 'drain of wealth' [5]. Statement II is also true and provides the causal explanation for this ruin. The acquisition of Diwani rights in 1765 allowed the Company to extract massive land revenue, leading to the impoverishment of the peasantry through high demands and indebtedness. Simultaneously, the Company used these revenues to purchase Indian goods for export, effectively financing trade with Indian money. This period saw the collapse of traditional handicrafts due to the influx of cheap British machine-made goods and the loss of patronage from Indian courts [3]. The systematic destruction of the rural economy and the handicraft industry to serve British industrial interests directly resulted in the economic ruin mentioned in Statement I [2].

Sources

[4] Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 28: Economic Impact of British Rule in India > Summary > p. 556
[5] Modern India ,Bipin Chandra, History class XII (NCERT 1982 ed.)[Old NCERT] > Chapter 5: The Structure of the Government and the Economic Policies of the British Empire in India, 1757—1857 > British Economic Policies in India, 1757-1857 > p. 98
[1] History , class XII (Tamilnadu state board 2024 ed.) > Chapter 1: Rise of Nationalism in India > Summary > p. 12
[2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > 6.1 Impact of British Rule on Indian Economy > p. 202
[3] Modern India ,Bipin Chandra, History class XII (NCERT 1982 ed.)[Old NCERT] > Chapter 11: Economic Impact of the British Rule > Ruin of Artisans and Craftsmen > p. 183

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SIMILAR QUESTIONS

Statement I : The economy of India in the 19th century came to a state of ruin under English East India Company. Statement II : English East India Company’s acquisition of Dtwani right led to the miseries of the peasants and those associated with the traditional handicrafts industry of India.

Statement I: In the 19th century, India was the largest British colony. Statement I : India became a big market for British manufactured goods and a field of investment for foreign capital in the 19th century.

Statement I : India’s share of world manufacturing output steadily declined during the 19th and the 20th centuries. Statement I : There was no absolute decline in production in India during the colonial rule.