Development of Railways, Industrialization, Constitutional Development.

Development of Railway, Industralization and constitutional development during British period



The British created the Indian Railways. They envisioned it, planned it, engineered it and instructed poor Indian laborers how to build it. There is a common misconception that the British “gifted” India the Railways. Nothing could be more wrong. The British did not build the Railways out of love for India or seeing the need to “prosperify” vast masses of poor Indians. They couldn’t have cared less. In order to govern this huge, disconnected and diverse country efficiently, they needed stuff to be moved around the country quickly, like the mail of the Empire, materials, officials, laborers, troops and so on. During that time, the revolutionary new “Railway technology” in England was accelerating industrialization and development of the Kingdom. The British realized that an extensive railway network was exactly what they needed in India to consolidate their power, control the local population, reach into the hinterlands and exploit the country to the maximum. And this was what led to the beginning of the Indian Railways. Letting the local populace use the trains was just a generosity extended on their part. Yes, the British built their Indian empire not on the power of gunpowder, but on the power of steam.

Between 1854 and 1899, several railway companies were incorporated and each began work on their own lines, pushing further and further inland from the coast. The biggest companies were GIPR (Great Indian Peninsular Railway) Bombay, EIR (East India Railway) Calcutta, MRC (Madras Railway Company) Madras, BB&CI (Bombay Baroda & Central India) Surat and others. EIR completed construction of the Calcutta – Delhi line via Allahabad in 1864 after 9 years of work and the first train rolled into Delhi Junction (DLI) the same year. But a regular train began running from Calcutta to Delhi only in 1866, was the precursor of today’s Howrah – Kalka Mail. BB&CI completed construction of a line from Ahmedabad to Bombay in 1867 and started a service from Virar to Bombay Backbay (present day Churchgate), probably marking the beginnings of what is today Mumbai’s most famous local train. By 1854, the very next year after the inaugural run, the Bombay – Thane line was doubled and extended up to Kalyan on the way to Igatpuri. But seemingly impossible Ghats obstructed the easy construction of a line out of Mumbai, and it took GIPR 10 years to finish the line across the Thal (Thull) Ghat section to reach Igatpuri. By 1870, that line had extended to Jabalpur via Manmad and Itarsi, where it met EIR’s Allahabad – Jabalpur branch line, completing the Bombay – Calcutta line. Meanwhile, GIPR was also hard at work trying to cross the Khandala (Bhore) Ghat to reach Pune from Mumbai.

This huge railway network altered India’s transport system. As a result, transport costs were greatly reduced thereby permitting new opportunities for profit.  Regional specialisation began to occur and trade (both domestic and foreign) flourished. India became a nation with its local centres linked by rail to each other arid to the world.  Railways made possible the establishment of a well-knit market. Railways, by establishing these links, had an impact throughout the economy. Karl Marx observed that the railway system in India would become “truly the forerunner of modern industry”.  “It was believed that railways would assist the economic development of India and help the import and distribution of manufactures and the collection and export of raw materials and agricultural produce. The official view was that the “the benefits covered by railways were at all-time great.”

But nationalists lambasted against this official claim and pinpointed that it was the railway which was responsible for the eclipse of some important industries of India. Despite massive investment in the nature of a ‘big push’ in railways rather than irrigation, ‘take off’ stage was hard-to come by. But this was too much for nationalists. Railways did certainly help the process of industrialisation.

The impact of railways was felt in all sectors of the Indian economy. Both people and goods made an extensive use of the railways. Vera Anstey, the distinguished British authority on economic development of India, argued that the construction of railways in India undoubtedly extended and revolutionised trade—both internal and external.

Before the advent of the railways in India, only a very small proportion of agricultural output was exported as agriculture was carried on only for subsistence. But railways transformed its very nature by commercializing it. Railways made India’s agriculture internationally competitive and, as a result, a floodgate of exports of agricultural products such as wheat, rice, jute oilseeds, and cotton was opened up.


Before the British rule, India was self-sufficient in textile and Cotton products but during the British rule, India fell down to the position of importing cloth from England.  In the 19th century A.D. British government abolished the tarrif protection of Indian goods. The country was reduced to the position of supplier of raw material to British industries. In 1850 Jute mills were established in India but there was no economic development in the country. In the time of 1st World War some goods, acquired by the people were reduced in India. This gave some industrial progress in our country.

Textile and cloth industries were established. Consumer goods receieved high demand, on account of trade relation with British. During the period of war Indian industries were encouraged to produce goods. After the first world war industries in India took up the production of machines goods in preference to consumer goods. As such key industries like Iron, Steel, Textiles and Sugar Industries came under tarrif protection.  During the second world war the industries in England, America and Japan were engaged in the production of war materials. At that time our industries increased the production of Consumer goods at a large scale and achieved great progress.  During the freedom struggle ” Swadeshi ” Movement in India was very much useful for the production of native goods, as the British goods were boycotted. A movement to protect the native goods and their indigenous industries, helped to keep up the country’s economy.

Reasons for Low Industrial Development in India

  • Inadequate capital accumulation
  • Mobilisation of unproductive investment; (Keynes castigated inordinate love for liquidity of Indians. Male people were desirous of seeing jewellery in the neck of their female counterparts)
  • Undue preference for quick-return yielding commerce and trading activities of the Indian capitalist classes; and
  • Concentration of entrepreneurship in the hands of a few small sections of Indians.

Constitutional developments during British rule

When the officials of the East India Company acquired control over Bengal in 1765 they had little intention of making any innovations in its administration. They only desired to carry on profitable trade and to collect taxes for remission to England .From 1762 to 1772 Indian officials were allowed to function as before but under the overall control of the British governor and British officials. In 1772 the company ended the dual government and undertook to administer Bengal directly through its own set of officials. The East India Company was at this time a commercial body designed to trade with the East. But during the period that elapsed between the Pitt’s India Act (1784) and the Charter Act of 1833 the company was gradually relieved of its long held trading privileges in the east.

Regulating Act of 1773

The Regulating Act of 1773 was first act of British Parliament to exercise indirect control over the affairs of East India Company’s rule in India. By 1773, the East India Company [EIC] was in deep financial trouble. The EIC owed money to both the Bank of England and the Government. The Company was important to Britain because it was a monopoly company in India and in the east and many influential people were shareholders. The Company failed to pay its dues to Government to maintain its monopoly.

Provisions of the Regulating Act are as follows:

  • A Court of Directors was created at London to oversee the affairs of EIC in India.
  • The Governor of Bengal/Fort William was elevated to the statue of Governor General of Bengal /Fort William [Warren Hastings was first Governor-General of Bengal] and governors of Madras and Bombay presidencies were brought under the control of Governor General of Bengal.
  • The institution of Governor General-in-council was created with Governor General as head and with four other members to carry out Legislative & Executive functions.
  • A Supreme Courtof Calcutta was provided with one chief justice and three puisne judges. It was constituted in 1774 with Sir Ellijay Impey as chief justice. [It had jurisdiction over Bengal, Bihar and Orissa &British judges were to be sent to India to administer the British legal system that was used there].

Pitt’s India Act, 1784

This was an Act of the Parliament of Great Britain intended to address the shortcomings of the Regulating Act of 1773. The supervisory role of British Parliament on the affairs of the EIC failed to control the nepotism and corruption among the officials of EIC and the system was not improving. In order to exercise direct control rather than having regulated role, the new Act was necessitated whereby Government can take a more active role in the affairs of the Company.

Provisions of the 1784 Act are as follows:

  • It brought the affairs of EIC in India under the control of the British Government.
  • A Board of Control was created at London with six members, two of whom were members of the British Cabinet and the remaining from the Privy Council. The Board also had a president, who soon effectively became the minister for the affairs of the East India Company.
  • This Act provided for a joint government of British India by both the Company and the Crown with the government holding the ultimate authority.[The Board was given powers to superintend, direct and control the government of the Company’s possessions in effect controlling the acts and operations relating to the civil, military and revenues of the Company.]
  • The membership in Governor General-in- council [governing council of the Company] was reduced to three members [1+ 3], and the governor-general, a crown appointee, was authorised to veto the majority decisions.


Charter Act of 1793

The East India Company Act 1793, also known as the Charter Act of 1793, was an Act of the Parliament of Great Britain which renewed the charter issued to the British East India Company, and continued the Company’s rule in India.

Provisions of act are as follows:

  • The Company’s trade monopoly was continued for a further 20 years.
  • Salaries for the staff and paid members of the Board of Control were also now charged to the Company.
  • The Governor-General was granted extensive powers over the subordinate presidencies.The Governor-General’s power of over-ruling his council was affirmed, and extended over the Governors of the subordinate presidencies.
  • Senior officials were forbidden from leaving India without permission.Royal approval was mandated for the appointment of the Governor-General, the governors, and the Commander-in-Chief.

The Charter Act of 1813

It renewed the charter issued to the British East India Company, and continued the Company’s rule in India.

  • It ended Company’s commercial monopoly in India, except tea and opium.Indian trade was thrown open to Englishmen.
  • It made compulsory training for all civil servants.
  • It allotted Rs.100,000/- to promote education in India.
  • Christian missionaries were allowed to come to British India and preach their religion.
  • Financial provision was also made to encourage a revival in Indian literature and for the promotion of science.

Government of India Act 1833

This Act of the Parliament of the United Kingdom was also meant for an extension of the royal charter granted to the company for further by 20 years.

It contained the following provisions:

  • It made the Governor-General of Bengal as the Governor-General of India.[Lord William Bentinck (1828 to 1835) was the first Governor-General of India. [Centralisation of Administration]
  • It Centralised the Legislature with the Governor General-in-council and thereby laws passed by the Central Council in Calcutta would have automatic application for Madras & Bombay provinces.
  • For the first time, a provision was made for the appointment of a law member to the Governor General-in-council who would attend the council meetings as a matter of right (only) when the legislative functions are performed.

The Charter Act, 1853

British Parliament was called upon to renew the Charter of the Company in 1853.The Parliament had in the preceding year appointed two committees to go into the affairs of the Company and on the basis of their reports the Charter Act of 1853 was framed and passed.

Provisions of act are as follows:

  • The number of the members of the courts of Directors was reduced from 24 to 18 out of which 6 were to be nominated by the crown. Power was given to the “Court of Directors” to constitute a new presidency and also to alter and regulate from time to time the limits of the various provinces.
  • The act ended the right of “Court of Directors” for the recruitment and recalling. The recruitment for the company jobs in the administration was transferred to “Board of Control”. For the first time Written Competitive Exams were held for the jobs in the administration.
  • The Governor General of India was relieved from the additional responsibility of being the Governor of Bengal and a Lt. Governor of Bengal was appointed for administering Bengal.
  • The Act of 1853 marked the beginning of a Parliamentary system in India. The Act extended the machinery of legislation. The law member was made permanent/full member of the GG executive council. This EC while sitting for legislative functions, has enlarged by the additions of 6 members- the chief Justice and a puisne judge of Supreme court of Calcutta and 4 civil servants representing four provinces-Bengal, Madras, Bombay and North Western Provinces.
  • It renewed the powers of the company and allowed it to retain possession of Indian territories on the condition that company should govern India in trust for the Crown. Unlikeearlier charter Acts, no timeframe was fixed this time

The Government of India Act 1858

This Act was passed to better administer the possessions of EIC in India under the backdrop of Indian rebellion in 1857. It was deliberated the complexities involved in the governing India under the existing system and therefore wanted to end the company rule in India.

Provisions of the act are as follows:

  • This Act has ended the East India Company rule in India and the British Crown took over the administration of India.
  • It abolished the “Court of Directors” and “Board of Control” and vested the powers in Queen’s Principal Secretary of State, a Minister in the British cabinet. Thus, the system of double government (one at London & another in India) introduced by the Pitt’s India Act of 1784 was abolished.
  • The secretary/ Minister in the cabinet was re-designated as “Secretary of State” for India, assisted by a council of 15 members was appointed to assist the Secretary of State for India. He was empowered to superintend, direct and control all the governmental affairs of India. [Charles Wood, the last president of Board of Control, was made the first Secretary of State.]
  • The Secretary of State for India was empowered to send some secret despatches to India directly without consulting the Council of 15 members. He was also authorised to constitute special committees of his Council.


The Indian Councils Act 1861

The Indian Councils Act 1861 empowered the viceroy to make rules for more convenient transaction of business. By using this provision Lord Canning has transformed the Viceroy of India’s executive council into a cabinet run on the “portfolio system”for easy legislation and administration.

  • A fifth member was added to the “Viceroy’s executive Council” [1+5]. This cabinet had six “ordinary members” who each took charge of a separate department in Calcutta’s government: home, revenue, military, law, finance, and (after 1874) public works.
  • The GG-in-council was enlarged by adding 6-12 members for legislative purpose. These members would be nominated by the Viceroy for a term of 2 years, but not less than half of them would non-officials.

The Indian Councils Act 1892

The Indian Councils Act 1892 was enacted by the Parliament of the United Kingdom  to increase the size of the various legislative councils in British India. This act was made in response to the demand from the Indian National Congress to expand legislative councils.

Provisions of the Act are as follows:

  • The number of additional members in the “Imperial Legislative Council” at Calcutta and “provincial Legislative Councils” were enhanced. In the Imperial Legislative council, there would be 10-16 non-officials. In the provincial councils the members would be not less than 8, but not more than 20.
  • Two fifths of the total members of the councils were to be non-officials. Some of them could be indirectly elected and others are nominated bythe Viceroy. Thus a system or an element of election, albeit indirect was introduced for the first time.
  • The non-official members to the Imperil Legislative Council were (indirectly) elected by the provincial legislatures. The non-official members of the provincial councils were elected by the Local bodies such as district boards, municipalities, universities and chambers of commerce. Thus was introduced the principle of representation.

The Indian Councils Act 1909 /Morley-Minto Reforms

The Indian Councils Act 1909 commonly known as the Morley-Minto Reforms, was an Act of the Parliament of the United Kingdom that brought about a limited increase in the involvement of Indians in the governance of British India. John Morley, the Liberal Secretary of State for India, and the Conservative Governor-General of India, The Earl of Minto, believed that cracking down on uprising in Bengal was necessary but not sufficient for restoring stability to the British Raj after Lord Curzon’s partitioning of Bengal. They believed that a dramatic step was required to put heart into loyal elements of the Indian upper classes and the growing Westernised section of the population.

Provisions of the act are as follows:

  • The size of the Legislature both at Central and provinces was enlarged. The number of the members of the Legislative Council at the Centre was increased from 16 to 60. It was fixed as 50 in the provinces of Bengal, Madras and Bombay, and for the rest of the provinces it was 30.
  • The members of the Legislative Councils, both at the Centre and in the provinces, were to be of four categories i.e. ex-officio members (Governor General and the members of their Executive Councils), nominated official members (those nominated by the Governor General and were government officials), nominated non-official members (nominated by the Governor General but were not government officials) and elected members (elected by different categories of Indian people).
  • .The most controversial provision in the act was separate communal electorate was given to the Muslims [Only Muslims would vote for the Muslim candidates] and representation in excess of their population. The income qualification for Muslim voters [for voting] was kept at lower than that of Hindus.


The Government of India Act, 1919 or Montagu-Chelmsford Reforms

Lord Montagu, the secretary of Stateannounced in the House of Commons on 17th August 1917 that the goal of constitutional advance in India to be “ the gradual development of self governing institutions with a view to the progressive realisation of responsible government as an integral part of British Empire”. It was called “Montagu statement” or “August Statement” [not to be confused with August offer made by Lord Wawell in 1944]. The Montagu–Chelmsford Report in 1918 has laid down a fourfold formula to implement the policy in first stage.

  • This Act had a separate Preamble which declared that Objective of the British Government is the gradual introduction of responsible Government in India. Diarchy was introduced as Provincial Level.
  • Diarchy means a dual set of governments one is accountable another is not accountable. The provincial subjects were divided into two groups: One was reserved and another was transferred. The reserved subjects were kept with the Governor and transferred subjects were kept with the Indian Ministers. This division of subjects was basically what they meant by introducing the Diarchy.
  • The Government of India Act of 1919, made a provision for classification of the central and provincial subjects. The Act kept the Income Tax as source of revenue to the Central Government. However, for Bengal and Bombay for which, to meet their objections, a provision to assign them 25% of the Income tax was made.
  • No bill of the legislature could be deemed to have been passed unless assented to by the governor general. The later could however enact a Bill without the assent of the legislature.
  • This Act made the central legislature bicameral. The lower house was the Legislative Assembly, with 145 members serving three year terms (the model for today’s Lok Sabha); the upper house was the Council of States with 60 members serving five year terms (the model for today’s Rajya Sabha) The Act provided for the establishment of a Public Service Commission in India for the first time.


Government of India Act 1935

Act was passed by British Parliament in August 1935. With 321 sections and 10 schedules, this was the longest act passed by British Parliament so far and was later split into two parts viz. Government of India Act 1935 and Government of Burma Act 1935. The Government of India Act 1935 derived material from four key sources viz. Report of the Simon Commission, discussions at the Third Round Table Conference, the White Paper of 1933 and the reports of the Joint select committees. This act ended the system of dyarchy introduced by GOI Act 1919 and provided for establishment of a Federation of India to be made up of provinces of British India and some or all of the Princely states. However, the federation never came into being as the required number of princely states did not join it.

Salient Features of the Government of India Act 1935 were as follows:

  • Abolition of provincial dyarchy and introduction of dyarchy at centre
  • . Abolition of Indian Council and introduction of an advisory body in its place.
  • Provision for an All India Federation with British India territories and princely states.
  • Elaborate safeguards and protective instruments for minorities.
  • Supremacy of British Parliament. Increase in size of legislatures, extension of franchise, division of subjects into three lists and retention of communal electorate. Separation of Burma from India
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