The Indian Capitalist Class: Loyalist or Nationalist?

Submitted by

Vipin Pandey

Faculty in Charge

Ms. NamrataGogoi

(Asst. Prof. of History)

NATIONAL LAW UNIVERSITY, ASSAM

31 October, 2015
 CONTENTS

1. Introduction and Background

1.1. Objectives and Scope
1.2. Review of Existing Literature
1.3. Research Methodology
1.4. Research Question
2. Various Stages of Colonialism in India
2.1. Rise of British Capitalism in India
2.2. Monopoly of Indian trade
2.2.1 Impact on Peasantry
2.3. Rise of Indian Capitalist Class
3. Approaches to nationalism
3.1. Nationalist Approach
3.2. Imperialist Approach
4. Growth of National Consciousness
4.1. Factors responsible for growth of Nationalism
5. Conclusion
Bibliography
1. Introduction

The Indian national movement was undoubtedly one of the biggest mass
movements modern societies have ever seen. It was also popular and multi-class
movement. It was basically the result of a fundamental contradiction between the
interest of the Indian people and that of British colonialism. The Indian people
were able to see that India was regressing economically and undergoing a process
of underdevelopment. This anti-colonial ideology and critique of colonialism was
disseminated during the mass phase of the movement. The Indian National
Congress, which emerged in 1885, championed the cause of Indian people. In
derived its entire strength, especially after 1918 from the militancy and self-
sacrificing sprit of the masses. Satyagraha as a form of struggle was based on the
active participation of the people and on the sympathy and support of the non-
participating millions. The non-cooperation movement, the civil-dies-obedience
movement and the quit-India movement were the reflection of the popularity of
the Congress. The Muslim League, which formed in 1906 gradually, widened its
base. The move towards Pakistan became inevitable when Jinnah and the Muslim
League basing them on the theory that Hindu and Muslim were two nations,
which must have separate homeland, Put forward the demand for Pakistan. So on
15th August 1947, a hard-earned, prized freedom were own after long, glorious
years of struggle but a bloody, tragic partition rent asunder the fabric of the
emerging free nation.

1.1.Scope and Objectives

The main objective of this project is to understand the role of Indian capitalist
class in national movement for independence and to know the stance of
capitalist class in the British India, for this I also discussed the rise of national
movement and capitalist class in india. The main theme of this project is
basically to understand what our capital class doing t the time of national
movement in country and how they supported the national movement, the
conclusion of this project will be about to check that the role of capitalist
class in national movement was loyalist or nationalist. As the topic is
moreover a sociologic topic rather than historic but historical development of
capitalist class make it sociological rather than historic.
1.2. Review of Existing Literature

Mukherjee, Aditya & Chandra, Bipin, Imperialism,Nationalism and Rise

of Capitalist Class, 1920-1947, Sage Publication, 2002.

This book by Mukherjee and Chandra helped me in understanding the rise of

capitalist class in the national movement and the role of capitalist class in it.
Secondly this book also helped me in understanding what was approach of
Indian capitalist class in national movement as there is ongoing debate as is it
loyalist or nationalist?

indian Capitalist Class and the Public Sector, 1930-1947, Aditya Mukherjee
Economic and Political Weekly, Vol. 11, No. 3 (Jan. 17, 1976), pp. 67-73
Published by: Economic and Political Weekly

This article helped me in studying impact on peasantry and approaches to

nationalism.

1.3.Research Methodology

The researcher has used the doctrinal study in the making of this project as
various books, articles, journals, etc. have been relied upon; and since the
empirical research wasn’t possible for purpose, the research has been
confined to doctrinal research mainly. The method of data collection is
secondary. The research design have been used are analytical and
explanatory.
1.4 Research Question
To critically research about the Indian Capitalist Class and to find out
weather they were loyalist or nationalist?
 Chapter-2
Various Stages of Colonialism in India
India is the part of the South Asia which was under the jurisdiction of European
colonialism powers, through the medium of trade and conquest. The first European
power to arrive in this region was the Macedonian army of Alexander the Great in
present-day Eastern Afghanistan and Western Pakistan in 327–326 BCE.
The satraps that Alexander established in the north west of the region quickly
crumbled after he left. Later, trade was carried between Indian states and
the Roman Empire by the Roman sailors who reached India via the Red
Sea and Arabian Sea, but the Romans never sought trading settlements or territory
in India. The spice trade between India and Europe was one of the main types of
trade in the world economy and was the main catalyst for the period of European
exploration of India.
Trading rivalries among the European powers brought other European powers to
India. The Dutch Republic, England, France, and Denmark-Norway all powers
established trading posts in India in the early 17th century. As the Mughal
Empire disintegrated in the early 18th century, and then as the Mahratta
Empire became weakened after the third battle of Panipat, many relatively weak
and unstable condition of Indian states which emerged were increasingly open to
manipulation by the Europeans, through dependent Indian rulers.
In the early 19th century the British had already gained direct or indirect control
over almost all part of India. British India, consisting of the directly-ruled British
presidencies and provinces, contained the most valuable parts of the British
Empire and thus became to be known as "the jewel in the British crown”.

2.1 Rise of British Capitalism in India

The two very different capitalist traditions evolved in India in the ancient times. One of
these formed along the coasts, lived on overseas trade, and usually operated from small
coastal areas or states. The other one formed in the land-locked interior, served overland
trade, and took part in moving the taxes that sustained vast and powerful empires. The
empires emerged in the fertile plains of the Ganges and the Indus, and lived on the land
taxes. The ruling classes understood the value of the seatrade, but could not easily take
control of that zone. Roads connecting inland empires to the coast were very few, and
road-building was costly because of the uplands, forests, and numerous rivers.

In the 1500s, some land-based states did establish a foothold in some places on the coast,
notably, Surat in Gujarat, Masulipatnam in the southeastern coast, and Hooghly in
Bengal. Their established reputation as business hubs that attracted not only Indian
merchants, but also the European merchant companies, including the Dutch and English
East India companies. The English East India Company later acquired three port on the
coasts, in Bombay (now Mumbai), Calcutta, and Madras, but these towns initially had
little significance beyond the Company’s own transaction and could not rival Surat or
Hooghly1Bombay, Madras, and Calcutta became important during a second turning point
in the story. As the Mughal Empire collapsed in the 1700s, hordes of Indian businesses
migrated to the Company cities, starving the interior of money and talent whereas Indo-
European partnerships flourished in the ports. An even more extraordinary development
wastheir that gave the rise to a seaboard state ruled by the East India Company.2

2.2 Monopoly of Indian Trade

The first stage i.e. “Monopoly of Indian Trade” had two basic objectives. In order to
make trade more profitable manufactured goods were to be bought very cheap.

For this competitors were to be kept out, whether local competitor or European
competitor. Territorial conquest kept local traders out of the lucrative trade while rival
European companies were defeated in the war. Thus, the characteristic of the first stage
was monopoly of trade.

Secondly, the political conquest of the colony enabled plunder and seizure of surplus. For
example, the drain of the wealth from India to Britain during the first stage was

1http://blogs.lse.ac.uk/southasia/2012/12/17/a-history-of-capitalism-in-india/
2http://www.nios.ac.in/media/documents/secsocscicour/english/lesson-05.pdf
considerable. It amounted to two to three percent of the national income of Britain at that
time. Colonialism was superimposed on the traditional systems of economy and polity.
No other basic changes were introduced in the first stage.

2.2.1 Impact on peasantry

The mass production of goods through machines that we witness today was pioneered
through the Industrial Revolution which occurred in England during the late 18th and the
early 19th century. This led to a massive increase in the output of finished products. The
East India Company helped in financing and expanding their industrial base. During this
time there was a class of manufacturers in England who benefited more from
manufacturing than trading. They were interested in having more raw materials from
India as well as sending their finished goods back. Between 1793 and 1813, these British
manufacturers launched a campaign against the company, its trade monopoly and the
privileges it enjoyed. Ultimately, they succeeded in abolishing the East India Company’s
monopoly of Indian trade. With this India became an economic colony of Industrial
England.
The British succeeded in selling their goods at a cheap price as foreign goods were given
free entry in India without paying any duty. On the other hand, Indian handicrafts were
taxed heavily when they were sent out of the country. Besides, under the pressure of its
industrialists, British government often imposed a protective tariff on Indian textiles.
Therefore, within a few years, India from being an exporter of clothes became an
exporter of raw cotton and an importer of British clothes. This reversal made a huge
impact on the Indian handloom weaving industry leading to its virtual collapse. It also
created unemployment for a large community of weavers. Many of them migrated to
rural areas to work on their lands as agricultural laborers. This in turn put increased
pressure on the rural economy and livelihood.3

3 ibid note (2)

2.3 Rise of Indian Capitalist Class
The Indian capitalist class developed after 1858. It soon entered into the competition
with the British capitalists and realized that its growth was checked by the official trade,
tariff, transport, and financial policies of the Government. While struggling for
independent economic growth, it came into conflict with the imperialism on almost every
small or big economic issue. The Indian capitalist class needed the active and direct
Government help to compensate it for its initial weakness and handicap in competing
with the firmly established industries of western Europe. The contemporary industries of
France, Germany and Japan were being developed with the active and massive
Government help. Such help was denied to Indian capitalists. Most of all the Indian
industry needed tariff protection so that the cheaper foreign goods would not outsell its
products. Such protection was not being given; instead, free trade was introduced more
completely than in any other country in the world.
The Indian capitalists thus increasingly found themselves in open contradictions with the
colonial economic structure, administrative machinery and policies. They gradually
realized that they needed a nation-state and a government favourable to indigenous
capitalists. The rapid development of Indian trade and industry could not occur so long as
foreign imperialism dominated the country of course, as men of property and members of
a weak though developing class, they did not immediately come into open and direct
confrontation with the foreign rulers on whom they depended for so many administrative
favours. But after 1918 they began to support, mostly financially, the rapidly developing
nationalist movement and individual nationalist leaders.4

4Indian Capitalist Class and the Public Sector, 1930-1947

Aditya Mukherjee
Economic and Political Weekly
Vol. 11, No. 3 (Jan. 17, 1976), pp. 67-73
Published by: Economic and Political Weekly
Stable URL: http://www.jstor.org/stable/4364330
Page Count: 7
 Chapter-3

Approaches to Nationalism

There is different approach among the historians as to the rise and sporadic growth of
nationalism in India. A group of Historian headed by Lajpat Rai, R.C. Manjumdar, R.G.
Pradhan and Girija Mukherjee called nationalist Historians expounded the exploitative
character of British lmperialism. The Marxist School emerged on the later seence and
popularized by R. PameDutt and A.R. Desai. The conservative and colonial
administration and the imperialist School of historians, popularly known as the
Cambridge school mainly demy the existence of colonialism as an economic, political,
social and cultural structure in India There is different approach among the historians as
to the rise and sporadic growth of nationalism in India. A group of Historian headed by
Lajpat Rai, R.C. Manjumdar, R.G. Pradhan and Girija Mukherjee called nationalist
Historians expounded the exploitative character of British lmperialism. The Marxist
School emerged on the later seence and popularized by R. PameDutt and A.R. Desai. The
conservative and colonial administration and the imperialist School of historians,
popularly known as the Cambridge school mainly demy the existence of colonialism as
an economic, political, social and cultural structure in India.

3.1 Nationalist Approach

The nationalist approach is one of the major approach in Indian Historiography. In-the
colonial period, this school was represented by the political activitiest such as Lajpat Ray,
A.C, Majumdar, R.G. Pradhan, pattaviSitharamya, Surendranath Banerjee, C.F. Adrevs
and GirijaMukharjee. More recenfly, B.R. Nanda, Elisweswa!' Prasao and Amlesh
Tripathy have made distinguishing contribution within the frame work of this approach.
The nationalist historians especially the more recent ones, show an awareness of the
exploitative character of the colonialism. On the whole they feel that the nationalist
movement was the result of the spread and the realisation on Liberty. They also take full
cognizance of the process of India becoming a nation, and see the natural movement as a
movement of the people.5

3.2 Imperialist Approach

The lmperialist School first emerged in the official pronouncements of the viceroy, lord
Dufferim, Curzon and Minto and the secretary of state, George Hamilton. It was first
cogently put forward by V. Chrirol, the Rowlett (Sedition) committee report, Verney
Lovett and the fr4tnta-gue- Chelmsford report. It was theorized for the first time, by
Bruce T.Mccully, an American scholar, in 1940’s. Its liberal version was adopted by the
Reginald coup land and after 1947, by Percival spear, while its conservation version was
refurbished and developed at length by Anil Seat and J.A Gallagher and their students
and followers after 1968. Since the liberal version is no longer fashionable in academic
circles, we will ignore it here due to shortage of space. The conservative colonial
administrators and the imperialist school of historians, popularly known as the
Cambridge School, deny the existence of colonialism as an economic, political, social
and cultural structure in India. Colonialism is seen by them primarily as the foreign rule.
They either do not see or vehemently deny the economic, social, cultural and political
development of India required the overthrow of colonialism. Thus, their analysis of the
national movement is based on the denial of the basic contradiction between the interests
of the Indian people and of the British colonialism and causative role this contradiction
played in the rise of the national movement.
Chapter-4
Growth of National Consciousness

Indian Nationalism is the modern Phenomenon. It came into being during the British
period as a result of the action and the interaction of subjective and objective forces
which developed within the Indian Society. The process of growth of the Indian
nationalism has been very complex and many sided. The advanced British nation for its

5Acharya, Shiva. "Nation, Nationalism and Social Structure in Ancient India By Shiva Acharya"
winning purpose, radically changed the economic structure of the Indian society,
established a centralized state, and introduced the modern education, modern means of
communication and other institution". This resulted into the birth of the modern Indian
nationalism. The work is an attempt to assess and evaluate the role of the numerous
elements comprising of the social background and portray the process of the rise of
nationalism in India

4.1 Factors Responsible for the Growth of Nationalism in India

 Consequence of Foreign Domination
Basically, modern Indian nationalism arose to meet the challenge of foreign
domination. The very conditions of British rule helped the growth of national
sentiment among the Indian people. it was British rule and its direct and indirect
consequences which provided the material, moral and intellectual conditions for
the development of a national movement in India. The root of the matter lay in the
clash of the interests of the Indian people with British interests in India. The
British had conquered India to promote their own interest and they ruled it
primarily with that purpose in view, often subordinating Indian welfare to British
gain.6
 Administrative And Economic Unification of the Country Nationalist sentiments
grew easily among the people because India was unified and welded into a nation
during the 19th and 20th centuries, The Brifish had gradually introduced a
uniformand modern system of government throughout the country and thus
unified it administratively. The destruction of the rural and local self - sufficient
economy and the introduction of modern trade and industries on an alt India scale
had increasingly made India's economic life a single whole and inter - linked the
economic fate of people living in different parts of the country too' Similarly the
products of a factory in Bombay were sold far north in Lahore or Peshawar.7
 Western Thought and Education

6 Factors responsible for the growth of nationalism in india by Arnav Raul

7Ibid(6)
 As a result of the spread of modern western education and thought during the
19th century, a large number of Indians imbibed a modern national, secular,
democratic and nationalist political outlook. They also began to study, admire,
and emulate the contemporary nationalist movements of European nations.
Rousseau, Paine, John Stuart Mill, While Mazzini, Garibaldi, and Trzaist
nationalist leaders became their political heroes. This educated Indians were the
first to feel the humiliation of foreign subjection. By becoming modern in their
thinking, they also acquired the ability to Study the evil effects of foreign rule.
They were inspired by the ream of a modern, strong prosperous and united India.
In course of time, the best among them became the leaders and organizers of the
national movement.8
 The Role of the Press and Literature
The chief instrument though which the nationalist minded Indians spread the
massage of patriotism and modern economic, social and political ideas and
created an all India consciousness was the press. Large numbers of nationalist
newspapers made their appearance during the second half of the 19th century. In
their columns, the official policies were constantly criticized, the Indian point of
view was put forward, the people were asked to unite and work for national
welfare and ideas of self government, democracy, industialisation etc. were
popularized among the people. Some of the prominent nationalist newspapers of
the period were the Hindu patriot, the Amrita Bazar Patrika, the Indian mirror, the
Bengalee, the Som Prakash and the Sajivani in Bengal, the RastGaftar, the Native
Opinion, the Indu Prakash, the Maharatta, and the Kesari in Bombay, the Hindu,
the Swadesamitram, the Andhra PradraPrakasika, and the Kerala Patrika in
Madras, the Advocate, the Hindustani and the Azad in U.P. and the Tribune, The
Akhbari - I AmBARI and the Koh Noor in the Punjab.9

8Ibid(6)
9Ibid(6)
 Conclusion
It is clear from the above analysis that birth and growth of Indian nationalism
was result of a combination of number of factors. No doubt the British
imperialism was one of the important factors in the process of development of
Indian national movement. According to Prof. Iswariprasad, the consciousness of
the E:rench that their troubles were due to Bourbuons led to the- French
Revolution, of the English that their troubles were due to the unrestrained
pregorative of The crown led to the civil war and of the Indians that their troubles
were due to British rule led to the formation of the Indian National Congress in
1885, whose object was to secure India's liberation. So all these factors
contributed to Indian nationalism.
Bibliography
 Books
Mukherjee, Aditya & Chandra, Bipin, Imperialism, Nationalism and Rise
of Capitalist Class, 1920-1947, Sage Publication, 2002.
 Articles
 Indian Capitalist Class and the Public Sector, 1930-1947, Aditya Mukherjee
Economic and Political Weekly, Vol. 11, No. 3 (Jan. 17, 1976), pp. 67-73
Published by: Economic and Political Weekly
 http://blogs.lse.ac.uk/southasia/2012/12/17/a-history-of-capitalism-in-
india/