Dada Bhai Naoroji and the Drain of Wealth Theory

Dada Bhai Naoroji, often called the 'Grand Old Man of India', was a prominent figure who critically analysed the economic impact of British rule in India. He is most famous for propounding the 'drain of wealth' theory.

The 'drain of wealth' theory argued that a significant portion of India's wealth and resources was being transferred to Britain without adequate economic or material return to India. This drainage was identified through various channels, including:

• Salaries and pensions of British officials serving in India.
• Profits made by British businesses in India and repatriated to Britain.
• Interests on loans taken by the Indian government from Britain.
• Expenditure on wars fought outside India but charged to the Indian revenue.
• Home Charges - expenses incurred in England on behalf of India.

Naoroji meticulously collected data and statistics to substantiate his theory, demonstrating how this continuous outflow impoverished India.

Presenting the Drain of Wealth before the Welby Commission

In 1895, the British government appointed a commission to inquire into Indian expenditure. This commission was known as the Royal Commission on Indian Expenditure, or more commonly, the Welby Commission, named after its chairman, Lord Welby.

Dada Bhai Naoroji seized this opportunity to present his findings and arguments regarding the 'drain of wealth' from India to Britain. He appeared before the Welby Commission and provided detailed evidence and analysis, explaining how the financial policies of the British government were leading to the economic exploitation and impoverishment of India.

His testimony before the Welby Commission was a significant moment in highlighting the economic critique of British colonialism and bringing the concept of 'drain of wealth' to official attention.

Analysing the Options

Let's look at the options provided:

• Welby Commission: Appointed in 1895 to inquire into Indian expenditure. Dada Bhai Naoroji presented his 'drain of wealth' case before this commission. This aligns with the historical facts.
• Mcdonald Commission: Typically refers to the commission related to famine relief, established in 1900 under Sir Antony MacDonnell following the famine of 1899-1900. Its focus was on famine policy and administration, not directly on the general 'drain of wealth' theory presented in 1895.
• Strachey Commission: Refers to the Famine Commission of 1880, headed by Sir Richard Strachey, after the great famine of 1876-78. Like the MacDonnell Commission, its primary focus was famine relief and prevention, not the overall economic drain as presented by Naoroji in 1895.
• Remittance Commission: This term is not standard for a major British commission related to Indian economic drain theory in 1895. While remittances are part of economic flows, there isn't a widely known commission by this name in this specific historical context related to Naoroji's presentation of the drain theory in 1895.

Based on historical records, Dada Bhai Naoroji presented his 'drain of wealth' theory before the Welby Commission in 1895.

Revision Table: Key Commissions and Concepts

Additional Information: Impact of the Drain Theory

Dada Bhai Naoroji's 'drain of wealth' theory had a profound impact on the Indian nationalist movement. It provided a strong economic justification for demanding self-rule by exposing the exploitative nature of British colonialism.

His book, "Poverty and Un-British Rule in India," published in 1901, detailed his drain theory and became a foundational text for economic nationalism in India. The theory educated Indians about the true cost of British rule and mobilised public opinion against it.

While the British government and economists often disputed his calculations and conclusions, the core idea of wealth transfer resonated deeply and became a central theme in nationalist discourse.