NIOS Class 12 History Chapter 17 Economic Effects of British Colonialism

NIOS Class 12 History Chapter 17 Economic Effects of British Colonialism, Solutions to each chapter is provided in the list so that you can easily browse throughout different chapters NIOS Class 12 History Chapter 17 Economic Effects of British Colonialism and select need one. NIOS Class 12 History Chapter 17 Economic Effects of British Colonialism Question Answers Download PDF. NIOS Study Material of Class 12 History Notes Paper 315.

NIOS Class 12 History Chapter 17 Economic Effects of British Colonialism

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Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 12 History Chapter 17 Economic Effects of British Colonialism, NIOS Senior Secondary Course History Solutions for All Chapter, You can practice these here.

Economic Effects of British Colonialism

Chapter: 17




Q. 1. What were the three phases of colonisation in British India?

Ans: The first phase (1757-1813) of mercantilism’ was that of direct plunder, the second phase (1813-1858) was that of free trade’ and the third phase (1858 onwards) was that of finance imperialism’.

Q. 2. What was one of the chief factors that led to the Battle of Plassey?

Ans: The misuse of the ‘dastak’ by Company employees for their private trade angered the Nawab of Bengal.

Q. 3. With whom did the Company permanently settle the revenue in Bengal?

Ans: Zamindars.

Q. 4. In which presidencies was the Ryotwari Settlement first introduced?

Ans: In Madras and Bombay presidencies the Ryotwari Settlement was first introduced.


Q.1. Which economist propounded the idea of free trade or laissez faire in the 18th century?

Ans: Adam Smith.

Q.2. How did the commercialization of agriculture cause famine?

Ans: The production of cash crops was encouraged at the cost of food crops which cause famine.

Q.3. Which region benefited most by the irrigation canals built by the British? 

Ans: Punjab.

Q.4. How did the Industrial Revolution in Britain lead to ‘deindustrialisation’ in British India?

Ans: Due to the Industrial Revolution in Britain cheap machine made goods from Britain flooded the markets in India. Indian handicrafts could not compete with them. This destructive process led to ‘deindustrialisation’ in British India.


Q. 1. Which world event provided Indian entrepreneurs the first opportunity to expand and grow?

Ans: The First World War.

Q. 2. Who propounded the ‘drain of wealth’ theory?

Ans: Dadabhai Naoroji.

Q. 3. Have later historians seen the 18th century as a period of economic backwardness?

Ans: No, later historians have characterised the 18th century as a period of general well-being and economic growth.


Q. 1. What were the revenue policies introduced by the British, and what changes did they bring about in the countryside in the colony?

Ans: Agriculture taxation was the main source of income for the Company, which had to pay dividends to its investors in Britain. Therefore, the British introduced a number of revenue policies. These revenue policies were as follows:

1. In 1772, the Governor of Bengal, Warren Hastings, introduced a system of revenue farming in the province of Bengal. In this system European District Collectors would ‘farm’ out the right to collect revenue to the highest bidder.

This system was a total failure and ruined the cultivators because of the arbitrarily high revenue demands.

2. Permanent Settlement: (i) In 1793, Cornwallis introduced this system.

(ii) Under this system, zamindars, who earlier only had the right to collect revenue, were established as the proprietors or owners of land.

(iii) The state’s demand for land revenue was permanently fixed, but if the zamindars were unable to pay the full tax on time, their lands would be taken away and auctioned by the state.

(iv) Through this system, the state tried to create an enterprising class of landowners, who would try to improve crop production in their fields to earn profits. Besides, it would be simpler for the state to deal with a limited number of zamindars than with every peasant, and a powerful section of society would become loyal to the British administration.

(v) But this system led to greater impoverishment of the tenant-cultivator because of the burden of high revenue assessment. It also caused great difficulty for zamindars, many of whom were unable to pay the revenue on time and lost their lands. A large number of traditional zamindar houses collapsed.

(vi) This system also encouraged subinfeudation i.e. many layers of intermediaries between the zamindars and cultivator, adding to the woes of the peasantry.

3. Ryotwari System: (i) This system was introduced by Alexander Read in 1792, for the Madras Presidency. The aim of this system was to keep out intermediaries from revenue collection. Later, this system was also introduced in the Bombay Presidency.

(ii) Under this system, revenue was initially collected from each village separately, but later each cultivator or ‘ryot’ was assessed individually. Thus, peasants not zamindars were established as property owners.

(iii) Although this system increased the revenue collected by the state, the assessments were faulty and the peasants overburdened by the taxes. The landed intermediaries continued to flourish.

4. Mahalwari Settlement: (i) This system was introduced in the north and northwest of India after 1822.

(ii) In this system the state made settlements with either the village community or, in some cases, the traditional taluqdar. Each such fiscal unit was called a mahal.

(iii) Under this system, some recognition was given to collective proprietary rights.

 As a result of the revenue policies of the British, agriculture stagnated and peasants almost became tenants at will. They also increased the number of landed intermediaries, and strongly entrenched the figure of the moneylender in the countryside. Landlords and zamindars became an important class and collaborators of British colonial rule.

Q. 2. Why was the commercialization of agriculture in the colony a forced’ process?

Ans: (i) The commercialization of agriculture in the colony seems to have been a forced artificial process that led to very limited growth in the agricultural sector. It led to differentiation within the agricultural sector, but did not create the figure of the ‘capitalist landowner’ as in Britain.

(ii) The lack of any simultaneous large scale industrial development meant that accumulated agrarian capital had no viable channels of investment, for it to be converted into industrial capital.

(iii) Initiatives to expand the productive capacity and organisation of agriculture was also a risky proposition, as the sector catered to a distant foreign market with wildly fluctuating prices, while the colonial state provided no protection to agriculturists.

(iv) Commercialization thus, instead the level of sub-inferedation in the countryside and money was channelised into trade and usury.

Q. 3. Explain the phase of ‘finance imperialism’.

Ans: (i) The third phase of British colonialism which begun from the 1860s, was the period of ‘finance imperialism’, when some British capital was invested in the colony. This capital was organised through a closed network of British banks, export-import firms and managing agencies.

(ii) The new development that marked out the third phase was an intensification of the rivalry between developed and industrialised countries, for colonies in Asia, Africa and Latin America. In the 19th century, countries like France, Belgium, Germany and the United States, and even Japan witnessed rapid industrialization. In the face of competition in the world market, Britain’s lead in this regard dwindled. In search for newer markets and sources of raw material, these countries stepped up their drive for colonies and strengthened their control over existing ones. Industrial development also led to capital accumulation, which was concentrated in a small number of banks and corporations. This capital was invested in the colonies to sustain the rapid inflow of raw materials to fuel further expansion of industrial production.

(iii) High tariff restrictions in other developing capitalist countries led to a contraction of markets for British manufactured goods. The need for heavy imports of agricultural products into Britain, was making her position vulnerable in her trade with other countries. India proved crucial in solving the problem of Britain’s deficits. Britain’s control over India ensured that there would always be a captive market for Lancashire textiles. Further, India’s export surplus in raw material with countries other than Britain, counter-balanced her deficits elsewhere.

(iv) While indigenous handicrafts faced impoverishment, there were few attempts at developing modern industries in the colony. British capital was initially invested in railways, jute industry, tea plantations and mining. The Indian money market was dominated by European banking houses. British banking houses and British trading interests were well organised through Chambers of Commerce and Managing Agencies and could also influence the colonial state, to carefully deny Indian entrepreneurs access to capital.

(v) Before the First World War, British Managing Agencies controlled 75% of industrial capital, and most of the profits from this limited industrialization were also sent back to Britain.

Multiple Choice Questions

Tick (✓) the correct answer. 

Q. 1. The first phase of the colonial exploitation was the period between:

(a) 1727-1757

(b) 1757-1813

(c) 1813-1854 

(d) 1813-1857

Ans: (b) 1757-1813

Q. 2. Finance imperialism took place after:

(a) 1757

(b) 1778

(c) 1853

(d) 1858

Ans: (d) 1858

Q. 3. In which year, the monopoly of the British East India Company over trade with India came to an end?

(a) 1808

(b) 1809

(c) 1813

(d) 1815

Ans: (c) 1813

Q. 4. The British East India Company had managed to acquire __ from the Mughal emperor.

(a) dastak.

(b) purchasing right.

(c) manufacturing right.

(d) market right.

Ans: (a) dastak.

Q. 5. Who introduced a system of revenue farming?

(a) Warren Hastings.

(b) Clive.

(c) Cornwallis. 

(d) Dalhousie.

Ans: (a) Warren Hastings.

Q. 6. Permanent settlement was introduced by:

(a) Warren Hastings.

(b) Donglas. 

(c) Dalhousie.

(d) Cornwallis.

Ans: (d) Cornwallis.

Q. 7. Ryotwari system was introduced by:

(a) Cornwallis.

(b) Alexander Read. 

(c) Dalhousie. 

(d) Lord Clive.

Ans: (b) Alexander Read. 

Q. 8. Which system was followed in the north and northwest of India after 1822?

(a) Mahalwari Settlement.

(b) Ryotwari Settlement.

(c) Permanent Settlement.

(d) None of the above.

Ans: (a) Mahalwari Settlement.

Q. 9. Indentured labourers were used in:

(a) Tea plantations.

(b) Coffee plantations.

(c) Indigo plantations.

(d) Rice cultivation.

Ans: (a) Tea plantations.

Q. 10. Which of the following was a cash crop?

(a) Rice.

(b) Wheat.

(c) Tea.

(d) Pulses.

Ans: (c) Tea.

Q.11. Who took the decision to construct railways in India?

(a) Lord Dalhousie.

(b) Cornwallis. 

(c) Lord Clive.

(d) Warren Hastings.

Ans: (a) Lord Dalhousie.

Q. 12. Which of the following witnessed rapid industrialization the 19th century?

(a) France.

(6) Belgium and Japan.

(c) Germany and the U.S.A.

(d) All of the above.

Ans: (d) All of the above.

Q. 13. What led to a contraction of markets for British manufactured goods?

(a) High tariff restrictions in other developing capitalist countries.

(b) Ban on import by other countries. 

(c) Ban on export by other countries.

(d) None of the above.

Ans: (a) High tariff restrictions in other developing capitalist countries.

Q. 14. Before the First World War who controlled 75% of industrial capital?

(a) The French managing agencies.

(b) The Dutch managing agencies.

(c) The German managing agencies.

(d) The British managing agencies.

Ans: (d) The British managing agencies.

Q. 15. Who of the following invested in the jute industry during the first World War?

(a) G.D. Birla.

(b) Khemchandani.

(c) Jamshedji Tata.

(d) Dhirubhai Ambani.

Ans: (a) G.D. Birla.

Q. 16. The period of depression years was:

(a) 1923-1926 

(b) 1929-1933

(c) 1937-1947 

(d) 1947-1953

Ans: (b) 1929-1933

Q. 17. The period of Second World war was:

(a) 1939-45

(b) 1941-45

(c) 1942-45

(d) 1943-45

Ans: (a) 1939-45

Q. 18. ‘Drain of wealth theory’ was put forward by:

(a) Nehru. 

(b) Motilal Nehru.

(c) Dadabhai Naoroji.

(d) Tilak.

Ans: (c) Dadabhai Naoroji.

Q. 19. Which of the following was a ‘surplus area’?

(a) Awadh.

(b) Banaras.

(c) Bengal.

(d) All of the above.

Ans: (d) All of the above.

Q. 20. The revenue official in the countryside in pre-British India was known as:

(a) Faujdar.

(b) Diwan.

(c) Taluqdar.

(d) Subedar.

Ans: (c) Taluqdar.

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