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INTRODUCTION
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CAREER
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DRAIN THEORY AND POLITICS
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ACHIEVEMENTS OF DADABHAI NAOROJI
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CONTRIBUTION OF DADABHAI NAOROJI TO INDIAN NATIONAL MOVEMENT
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6 THE IMPACT OF THE DRAIN THEORY OF DADABHAI NAROJI IN THE GROWTH OF ECONOMIC NATIONALISM
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3 INTRODUCTION Dadabhai Naoroji was born in Bombay on 4th September 1825, the son of Maneckbai and Naoroji Palanji Dordi, a poor Athornan (priestly) Parsi family. At the age of 4, Dadabhai's father died and his mother was left the difficult task of bringing up the family, and she managed admirably. According to prevailing customs, she arranged the marriage of Dadabhai to Gulbai at the early age of 11. For the rest of her life, Maneckbai remained a close companion and mentor to Dadabhai. "She made me what I am" noted Dadabhai in 1901 when he gave an account of his early life in "The Days of my Youth." Dadabhai became a scholar at the Elphinstone Institution (now Elphinstone College, Bombay) and had a brilliant academic career. In 1850 at the early age of 25, he was appointed Assistant Professor, and 4 years later, Professor of Mathematics and Natural Philosophy at the Elphinstone Institution. Professor Orlebar of the college called him "The Promise of India". Dadabhai, being an Athornan (ordained priest), founded the Rahnumae Mazdayasne Sabha (Guides on the Mazdayasne Path) on 1st August 1851. The ethos of the Rahnumae at its inception was to restore the Zoroastrian religion to its original purity and simplicity. The society is still in operation in Bombay. In 1867 Naoroji helped establish the East India Association, one of the predecessor organizations of the Indian National Congress. In 1874 he became Prime Minister of Baroda and was a member of the Legislative Council of Mumbai (then Bombay) (1885-88). He also founded the Indian National Association from Calcutta a few years before the founding of the Indian National Congress in Mumbai, with the same objectives and practices. The two groups later merged into the INC, and Naoroji was elected President of the Congress in 1886. Naoroji moved to Britain once again and continued his political involvement. Elected for the Liberal Party in Finsbury Central at the 1892 general election, he was the first British Indian MP. He refused to take the oath on the Bible as he was not a Christian, but was allowed to take the oath of office in the name of God on his copy of Khordeh Avesta. In Parliament he spoke on Irish Home Rule and the condition of the Indian people. In his political campaign and duties as an MP, he was assisted by Muhammed Ali Jinnah, the future Muslim nationalist and founder of Pakistan. In 1906, Naoroji was again elected president of the Indian National Congress. Naoroji was a staunch moderate within the Congress, during the phase when opinion in the party was split between the moderates and extremists. Dadabhai was elected to Parliament on the 5th of July 1892 and entered the House of Commons as a Liberal, representing the Central Finsbury constituency. He delivered his maiden speech in the House of Commons in August 1892. This was indeed a historic occasion as Dadabhai Naoroji became the first ever Indian/Asian Member of the British Parliament. Dadabhai immediately championed various causes in the House of Commons. He made many speeches both in England and in India on political reforms, fair play and justice for India, which spearheaded the beginning of the freedom struggle. He was renowned as the founding father of Indian Nationalism. Dadabhai's success on being elected to the Parliament was followed by two other Indian Parsi Zoroastrians; Sir Muncherjee Merwanji Bhownagree and Sir Sorabji Saklatvala. Dadabhai's reputation and his help facilitated the political careers of both these gentlemen.
4 CAREEER Naoroji was born in Bombay and educated at the Elphinstone Institute School. Being an Athornan (ordained priest), Naoroji founded the Rahnumae Mazdayasne Sabha (Guides on the Mazdayasne Path) on 1 August 1851 to restore the Zoroastrian religion to its original purity and simplicity. In 1854, he also founded a fortnightly publication, the Rast Goftar (or The Truth Teller), to clarify Zoroastrian concepts. In 1855, he was appointed Professor of Mathematics and Natural Philosophy at the Elphinstone College in Bombay, becoming the first Indian to hold such an academic position. He travelled to London in 1855 to become a partner in Cama & Co, opening a Liverpool location for the first Indian company to be established in Britain. Within three years, he had resigned on ethical grounds. In 1859, he established his own cotton trading company, Naoroji & Co."Dadabhai Naoroji, 1825-1917", Migration Histories. Later, he became professor of Gujarati at University College London.
Dadabhai Naoroji statue, near Flora Fountain, Mumbai Plaque referring to Dadabhai Naoroji, located outside the Finsbury Town Hall on Rosebery Avenue, London. In 1867 Naoroji helped to establish the East India Association, one of the predecessor organizations of the Indian National Congress with the aim of putting across the Indian point of view before the British public. The Association was instrumental in counter-acting the propaganda by the Ethnological Society of London which, in its session in 1866, had tried to prove the inferiority of the Asians to the Europeans. This Association soon won the support of eminent Englishmen and was able to exercise considerable influence in the British Parliament. In 1874, he became Prime Minister of Baroda and was a member of the Legislative Council of Mumbai (188588). He was also a member of the Indian National Association founded by Sir Surendranath Banerjee from Calcutta a few years before the founding of the Indian National Congress in Bombay, with the same objectives and practices. The two groups later merged into
5 the INC, and Naoroji was elected President of the Congress in 1886. Naoroji published Poverty and un-British Rule in India in 1901.
Naoroji in 1892. Naoroji moved to Britain once again and continued his political involvement. Elected for the Liberal Party in Finsbury Central at the 1892 general election, he was the first British Indian MP. He refused to take the oath on the Bible as he was not a Christian, but was allowed to take the oath of office in the name of God on his copy of Khordeh Avesta. In Parliament, he spoke on Irish Home Rule and the condition of the Indian people. In his political campaign and duties as an MP, he was assisted by Muhammed Ali Jinnah, the future Muslim nationalist and founder of Pakistan. In 1906, Naoroji was again elected president of the Indian National Congress. Naoroji was a staunch moderate within the Congress, during the phase when opinion in the party was split between the moderates and extremists. Naoroji was a mentor to Bal Gangadhar Tilak, Gopal Krishna Gokhale and Mohandas Karamchand Gandhi. He was married to Gulbai at the age of eleven. He died in Bombay on 30 June 1917, at the age of 91. Today the Dadabhai Naoroji Road, a heritage road of Mumbai, is named after him. Also, the Dadabhai Naoroji Road in Karachi, Pakistan is also named after him as well as Naoroji Street in the Finsbury area of London. A prominent residential colony for central government servants in the south of Delhi is also named Naoroji Nagar. He was president of Indian National Congress, Calcutta section1906.
6 DRAIN THEORY AND POLITICS
Dadabhai Naorojis work focused on the drain of wealth from India into England through colonial rule. One of the reasons that the Drain theory is attributed to Naoroji is his decision to estimate the net national profit of India, and by extension, the effect that colonization has on the country. Through his work with economics, Naoroji sought to prove that Britain was draining money out of the India. Naoroji described 6 factors which resulted in the external drain. Firstly, India is governed by a foreign government. Secondly, India does not attract immigrants which bring labour and capital for economic growth. Thirdly, India pays for Britains civil administrations and occupational army. Fourthly, India bears the burden of empire building in and out of its borders. Fifthly, opening the country to free trade was actually a way to exploit India by offering highly paid jobs to foreign personnel. Lastly, the principal income-earners would buy outside of India or leave with the money as they were mostly foreign personnel. In Naorojis book Poverty he estimated a 200-300 million pounds loss of revenue to Britain that is not returned. Naoroji described this as vampirism, with money being a metaphor for blood, which humanized India and attempted to show Britains actions as monstrous in an attempt to garner sympathy for the nationalist movement. When referring to the Drain, Naoroji stated that he believed some tribute was necessary as payment for the services that England brought to India such as the railways. However the money from these services were being drained out of India; for instance the money being earned by the railways did not belong to India, which supported his assessment that India was giving too much to Britain. India was paying tribute for something that was not bringing profit to the country directly. Instead of paying off foreign investment which other countries did, India was paying for services rendered despite the operation of the railway being already profitable for Britain. This type of drain was experienced in different ways as well, for instance, British workers earning wages that were not equal with the work that they have done in India, or trade that undervalued Indias goods and overvalued outside goods. Englishmen were encouraged to take on high paying jobs in India, and the British government allowed them to take a portion of their income back to India. Furthermore, the East India Company was purchasing Indian goods with money drained from India in order to export to Britain, which was a way that the opening up of free trade allowed India to be exploited. When elected to Parliament by a narrow margin of 3 votes his first speech was about questioning Indias place in India. Naoroji explained that they were either British subjects or British slaves which would be identified based on how willing Britain was to give India the institutions that Britain already operated. By giving these institutions to India it would allow India to govern itself and as a result the revenue would stay in India. It is because Naoroji identified himself as an imperial citizen that he was able to address the economic hardships facing India to an English audience. By presenting himself as an Imperialist citizen he was able to use rhetoric to show the benefit to Britain that an ease of financial burden on India would have. He argued that by allowing the money earned in India to stay in India, tributes would be willingly and easily paid without fear of poverty; he argued that this could be done by giving equal employment opportunities to Indian professionals who consistently took jobs they were over-qualified for.
7 Indian labour would be more likely to spend their income within India preventing one aspect of the drain. Naoroji believed that to solve the problem of the drain it was important to allow India to develop industries; this would not be possible without the revenue draining from India into England. It was also important to examine British and Indian trade in order to prevent the end of budding industries due to unfair valuing of goods and services. By allowing industry to grow in India, tribute could be paid to Britain in the form of taxation and the increase in interest for British goods in India. Over time, Naoroji became more extreme in his comments as he began to lose patience with Britain. This was shown in his comments which became increasingly aggressive. Naoroji showed how the ideologies of Britain conflicted when asking them if they would allow French youth to occupy all the lucrative posts in England. He also brought up the way that Britain objected to the drain of wealth to the papacy during the 16th century. Naorojis work on the drain theory was the main reason behind the creation of the Royal commission on Indian Expenditure in 1896 in which he was also a member. This commission reviewed financial burdens on India and in some cases came to the conclusion that those burdens were misplaced.
8 ACHIEVEMENTS OF DADABHAI NAOROJI A versatile scholar, Dadabhai Naoroji began his career as the professor of Mathematics and Natural Philosophy. But in 1855 he left the profession and moved to London as the partner of the Parsi firm. In 1859, he started his s own business of cotton trading, but later, at University College London, he became professor of Gujarati. Naoroji facilitated the establishment of the East India Association in 1867. Dadabhai Naoroji was elected as Prime Minister of Baroda and accepted the office of Diwan in 1874. He also became a member of the Indian National Association originally established by Sir Surendra Nath Banerjee from Calcutta (Kolkata) and later founded the Indian National Congress with similar objectives and aims. Eventually the two groups united and Naoroji became the president of the Indian National Congress. He again moved back to Britain and in the year 1892, he became the first Indian member of the House of Commons. Moreover, he became the President of the Indian National Congress thrice, in 1886, 1893 and 1906. From his very childhood, Dadabhai Naoroji was sympathetic to the socio-political condition of his countrymen. Therefore he was very much active in taking steps for the social and the political advantage of his countrymen. He founded the Dyan Prasarak Mandali and a Girls High School at Bombay for the purpose of educating the women. He also established the Bombay Association in 1852. The Bombay Association was the first political association in India. During the long years of his stay in London, he made every effort to make the English people aware about the Indian affairs. He established the London Association and the East India Association in order to propagate his ideals among the European people. In this way Dadabhai Naoroji became the national hero. In politics Dadabhai Naoroji was conscious of the numerous benefits that the Indians derived from the British rule in India. He pledged "loyalty to the backbone" to the British crown and "the permanent continuance" of the British rule in India. As the congress Movement passed its early years of development, it demanded for Swaraj. Although Bal Gangadhar Tilak first raised the slogan that "Swaraj is my birth s right", it was Dadabhai Naoroji who demanded for Swaraj from the platform of Congress. In Calcutta Session during delivering his Presidential address in the Calcutta session he emphasized the need for self-government or Swaraj. However, Dadabhai Naoroji had enough faith in the justice and the statesmanship of the British. It was Dadabhai Naoroji who exposed the exploitative nature of the British ruler in India. He was the first Indian who drew the attention of both the Indians as well as the Europeans, to the economic exploitation of India. He brought to the public notice the drain of Indian wealth to the European countries and the resulting poverty of the Indians. In his book, Poverty under British rule in India, Dadabhai Naoroji, proved his thesis of drain of wealth logically. He brought to notice that the relation between the Government and the common people in India was that of a master and slave. The Indians were plundered and oppressed continuously. Dadabhai during his presidency in the assembly of Indian National Congress brought all these issues to the public notice.
9 CONTRIBUTION OF DADABHAI NAOROJI TO INDIAN NATIONAL MOVEMENT Dadabhai has himself stated, She made me what I am. Dadabhai married early when he was only in his eleventh year. His wife, Gulabi, who was barely seven at the time, was the daughter of Shorabji Shroff. He had three children, one son and two daughters. Dadabhai had his early schooling in a primary institution run by a Mehtaji at Bombay. On its completion, Manekbai, as urged by Mehtaji, sent her son to the Elphinstone Institution, Bombay, for his secondary education. This was followed by a course of studies at the Elphinstone College. Dadabhais performance here was outstanding, and in 1840 he obtained the Clare Scholarship. He became a graduate in 1845. In 1916, he was awarded the Honorary degree of LL.B. by the Bombay University. On 27 June 1855 he left for London to join business as a partner in Camas firm in London. Four years later he started his own firm, having returned to India in the meantime, He travelled back and forth on business between India and England during 1865 to 1876. In 1886 he went to England to contest for election to Parliament and in 1907 to espouse the cause of the freedom on India from British rule.Foreign travel left its mark on his character and personality. Himself a product of liberal western education, he was an admirer of the western system of education. He sent his daughter abroad for medical education. His son, Adi, was taken to London at the age of 5 and was put to school there. Dadabhai believed that India had cause to be grateful to the British for introducing the western system of education in India and he helped several Indian students who went to England for higher studies. Books and friends added their contribution to the flowering of his personality. Shahnama of Firdausi, Improvement of Mind by Watt, the works of Carlyle, Mill and Herbert Spencer, to name a few, made a deep impression on him, His constant companion was The Duties of the Zoroastrians, which stressed pure thoughts, pure speech and pure deed. His friends among foreigners were innumerable. They started with Professor Orlebar of the Elphinstone College who hailed Dadabhai as the promise of India, and Sir Erskine Perry, the Chief Justice of the Bombay Supreme Court, who was so struck by Dadabahais academic distinction that he suggested that he should be sent to England. He was willing to pay half the expenses provided the community was prepared to share the other half. Later, he helped Dadabhai on the Civil Service issue. Samuel Smith, a leading cotton merchant was impressed by Dadabhais character and became a close friend and partner in Dadabhais fight for the freedom of India. Allan Hume, the founder of the Indian National Congress, was another friend. So too were Sir W. Wedderburn Martin Wood, the Editor of the Times of India, who supported Dadabhais candidature to Parliament, Henry Mayers Hyndmann a British Socialist, Major Evans Bell of the Madras Staff Corps, Sir George Birdwood, Sheriff of Bombay, Charles Bradlaugh, M.P., W.S. Caine and W.A. Chambers. The bond that united them with Dadabhai was love for India and a keen desire to understand her problems. In India, his friends included Sorabjee Bengali the social reformer, Khursetji Cama, Kaisondas Mulji, K.R. Cama, the Orientalist, Naoroji Furdonji, Jamesdji Tata, and some Indian Princes.
10 Among his younger friends were R.G. Bhandarkar, the Orientalist, N.G. Chandavarkar, the nationalist reformer, Pherozeshah Mehta, G.K. Gokhale, Dinshaw Wacha and M.K. Gandhi. Soon after graduation in 1845, he was appointed as the Native Head Assistant at the Elphinstone Institute, Bombay. In 1850 he became an Assistant Professor of Mathematics and Natural Philosophy at the Elphinstone College, Bombay. He was the first Indian to be appointed Professor at this College. He taught in the special classes held for the spread of womens education. In March 1856, he was nominated as Professor of Gujarati in the University College, London, a post he continued to hold till 1865-66. During this period Dadabhai took a keen interest in and laboured hard for the spread of education. In 1855-56, he became a business partner and took charge of the London Branch of Cama and Co., and also became a member of the Manchester Cotton supply Association, Further, he took an active part in the deliberation of the Council of Liverpool, the Athenaeum and the National Indian Association. In 1865 he founded, along with W.C. Bonnerjee, the London India Society and became its President. He continued as President till 1907, when he returned to India. Thereafter, till his death he remained as its Honorary President. In 1861 he established the London Zoroastrian Association. In 1862 he separated from Cama and Co., and started his own business in the name of Dadabhai Naoroji & Co. On 1December 1866 he founded the East India Association, London, whose scope for activity was wider, and became its Secretary. In 1974 he was appointed the Dewan of Baroda and a year later, on account of differences with the Maharaja and the Resident, he resigned the Dewanship. In July 1875 he was elected a Member of the Municipal Corporation, Bombay, and in September of the same year, he was elected to the Town Council of the Corporation. In 1876 he resigned and left for London. He was appointed as Justice of the Peace in 1883 and was elected to the Bombay Municipal Corporation for the second time. In August 1885 he joined the Bombay Legislative Council at the invitation of the Governor, Lord Reay. On 31 January 1885, when the Bombay Presidency Association came into being, he was elected as one of its Vice-Presidents. At the end of the same year, he took a leading part in the founding of the Indian National Congress and became its President thrice, in 1886, 1893 and 1906. During this period, he was engaged in other important activities. In 1873 he gave evidence before the Parliamentary Committee on Indian Finance, the Fawcett Committee, which was appointed through his efforts. Here he sought to prove that the incidence of taxation in India was very high, while the average income of an Indian was barely Rs. 20/-. In 1883 he had started a newspaper called the Voice of India. In 1887 he gave evidence before the Public Service Commission. In 1897 he was appointed a Member of the Royal Commission on Indian Expenditure Kinden known as the Welby Commission. He gave evidence as a witness before this Commission in 1897, and in 1898 he submitted his views in the form of two statements to the Indian Currency Commission. In 1905 he represented India at the International socialist Congress at Amsterdam. Dadabhai was frequent contributor of articles and papers to various journals and magazines. He wrote regularly
11 for the Students Literary Miscellany, a journal started by the students Literary and Scientific Society at the Elphinstone College, Bombay, which was founded in 1850. He himself edited his societys Gujarati journal the Dnyan Prakash. In 1889, along with a few collaborators, he started the Rast Goftar (Truth Teller), a Gujarati weekly which was known for its advanced and progressive views, and edited it for two years. In 1883 he started the Voice of India in Bombay and later incorporated it into the Indian Spectator. In 1878 he published a pamphlet, Poverty of India, later revised and enlarged in the form of a book published in 1901 from London, under the title Poverty and un-British Rule in India. He is known in the history of Indian economic thought for his pioneering work in assessing Indias national income, Under the title Dadabhai Naorojis Speeches and Writings, G.A. Natesan & Co., Madras, Published various learned papers which he wrote and read before different societies. He was a patriot and a nationalist of a high order. India was constantly in his thoughts. As Dinshaw Wacha said: By universal consent, he has been acclaimed as the Father of Indian Politics and Economics. Through the innumerable societies and organisations with which he was associated and his contributions to organs of public opinion, he voiced the grievances of the Indian people and proclaimed their aims, ideals and aspirations to the world at large. He won with effortless ease high distinction on many fronts and will always be remembered in the history of the national movement.
12 THE IMPACT OF THE DRAIN THEORY OF DADABHAI NAROJI IN THE GROWTH OF ECONOMIC NATIONALISM Of all the national movements in colonial countries, the Indian national movement was the most deeply and firmly rooted in an understanding of the nature and character of colonial economic domination and exploitation.
Its early leaders, known as the moderates were the first in the 19 th century to develop an economic critique of colonialism. The focal point of the nationalist critique of colonialism was the drain theory. The nationalist leaders pointed out that a large part of Indias capital and wealth was being transferred or drained to Britain in the form of salaries and pensions of British civil and military officials working in India, interests on loans taken by the Indian government, profits of the British capitalists in India and the home charges or expenses of the Indian Government in Britain. This drain took the form of an excess of exports over the imports for which India got no economic or national return. According to the nationalist calculations, this chain amounted to one-half of the government revenues more than the entire land revenue collection and over one- third of Indias total savings. The acknowledged high priest drain theory was Dadabhai Naroji. It was in May 1867 that Dadabhai Naroji put forward the idea that Britain was draining and bleeding India. From then on for nearly half a century he launched a raging campaign against the drain, hammering at the theme through every possible form of public communication. R.C. Dutt made the drain the major theme of his Economic History of India. He protested that taxation raised by a king is like the moisture sucked up by the sun, to be returned to earth as fertilizing rain, but the moisture raised from the Indian soil now descends as fertilizing rain largely on other lands, not on India. The drain theory incorporated all the threads of the nationalist critique of colonialism, for the drain denuded India of the productive capital its agriculture and industries so desperately needed. Indeed the drain theory was comprehensive, inter-related and integrated economic analysis of the colonial situation.
13 The drain theory had far reaching impact on the growth of the economic nationalism in India. Banking on this theory the early nationalists attributed the all- encompassing poverty not as a visitation from God or nature. It was seen as man-made, and therefore capable of being explained and removed. The drain by taking form of excess of exports over imports, led to progressive decline and ruin of Indias traditional handicrafts. The British administrators pointed with pride to the rapid growth of Indias foreign trade and rapid construction of railways as instruments of Indias development as well as proof of its growing prosperity. However, because of their negative impact on indigenous industries, foreign trade and railways represented not economic development but colonization and under development of economy. What mattered in case of foreign trade was not its volume but its pattern or nature of goods internationally exchanged and their impact on national industry and agriculture. According to early nationalists, drain constituted a major obstacle to rapid industrialization especially when it was in terms of policy of free trade. The policy of free trade was on the one hand ruining Indias handicraft industries and on the other forcing the infant and underdeveloped modern industries into a premature and unequal and hence unfair and disastrous competitive with the highly organized and developed industries of the west. The tariff policies of the Government convinced the nationalists that the British economic policies in India were guided by the interest of British capitalist class. For the early nationalists the drain also took the form of colonial pattern of finance. Taxes were so raised as they averred, so as to overburden the poor while letting the rich especially the foreign capitalists and bureaucrats to go scot-free. Even on expenditure side, the emphasis was on serving Britains imperial needs while the developmental and welfare departments were starred. The corrosion of faith in the British rule inevitably spread to the political field. In course of time, the nationalist leaders linked nearly every important question with the politically subordinated status of the country. Step by step, issue by issue, they began to draw the conclusion that since the British administration was only the handmade to the task of exploitation, pro-Indian and developmental policies would be followed only by a regime in which Indians had control over political power. The result was that even though the early nationalists remained moderates and professed loyalty to British rule, they cut at the political roots of the empire and sowed in the land, the seeds of disaffection and disloyalty and even sedition. Gradually, the nationalists veered from demanding reforms to begin demanding self government or swaraj like that of the United Kingdom or the colonies. The nationalists of the twentieth century were relying heavily on the main themes of their economic critique of colonialism. These themes were then to reverberate in Indian villages, towns and cities. Based on this firm foundation, the later nationalists went on to stage powerful mass agitations and mass movements. The drain theory thus laid the seeds for subsequent nationalism to flower and mature.