Colonial Rule and the Internal Economy in Twentieth-century Madras

Abstract

Throughout the colonial period, the government played a substantial role in structuring India's foreign trade and in moulding the economy of the great port cities and their immediate hinterlands. Once Company and government had started to prise themselves apart in the early nineteenth century, however, the colonial rulers adopted a very haughty attitude towards the working of the internal economy. The development of internal production and trade would of course be deeply affected by the imperial connection, but the colonial government refused to admit responsibility and was careful not to be drawn into active intervention. The transition from colonial rule to independence did not mark a sharp break between this era of laissez faire or minimal interference in the internal economy, and an era of 'development' or constructive intervention. Indeed, it is more likely that a reluctant slide into economic management during the latter part of the colonial period helped to speed the colonial rulers along their course of retreat; any attempt to tamper with the mechanisms of the internal economy opened up the colonial government to contradictory pressures and threatened to expose many of the weaker links in the mesh of colonial command.