Contributions of Moderate Nationalists

Economic Critique of British Imperialism The early nationalists, led by Dadabhai Naoroji, R.C. Dutt, Dinshaw Wacha and others, carefully analysed the political economy of British rule in India, and put forward the “drain theory” to explain British exploitation of India. They opposed the transformation of a basically self-sufficient Indian economy into a colonial economy (i.e., a supplier of raw materials and food stuff, an importer of finished goods and a field of investment for British capital). Thus, the Moderates were able to create an all-India public opinion that British rule in India was the major cause of India’s poverty and economic backwardness.

To mitigate the deprivation characterising Indian life,

the early nationalists demanded severance of India’s economic subservience to Britain and development of an independent economy through involvement of Indian capital and enterprise. The early nationalists demanded reduction in land revenue, abolition of salt tax, improvement in working conditions of plantation labour, reduction in military expenditure, and encouragement to modern industry through tariff protection and direct government aid. (Also refer to chapter on Economic Impact of British Rule in India.)