Dadabhai Naoroji

Right Honourable Secretary of State,

I write to place before you, with all the gravity that this subject demands, the continued and systematic impoverishment of India under the present economic arrangements of British administration.

The political economy of British rule in India is a most deplorable and destructive process of bleeding the country to death. After careful calculation and analysis spanning several decades, I must report that Britain annually drains from India wealth equivalent to more than half the entire net revenue of the country.

This drain operates through multiple channels: the Home Charges paid by India for British administrative expenses, military expenditure for British troops, pensions for British officials, interest on debts contracted for British purposes, and the profits of British capital invested in India that flow back to Britain rather than being reinvested in Indian development.

Consider the mathematics of this exploitation: India’s total annual revenue amounts to approximately £70 million, yet the annual drain to Britain exceeds £30 million. This represents not merely taxation, but the systematic extraction of wealth that might otherwise have fostered Indian industry, education, and prosperity.

The consequences are visible everywhere: perpetual famines that kill millions, the destruction of traditional industries, the impoverishment of agriculture, and the complete absence of capital for indigenous development. Meanwhile, Britain grows prosperous on the very wealth that India desperately needs for its own advancement.

I have documented specific instances of this drain:

• Military expenditure of £17 million annually, largely for maintaining British troops at Indian expense
• Home Charges of £16 million for British administrative costs that should properly be borne by Britain
• Interest payments on loans contracted without Indian consent for British imperial purposes
• Commercial profits systematically repatriated to Britain rather than reinvested in India

This is not merely poor policy—it is a violation of every principle of just governance. No country can prosper when its wealth is systematically extracted for the benefit of its rulers. Britain would not tolerate such treatment of Scotland or Ireland; India deserves no less consideration.

I respectfully submit that fundamental reforms are urgently needed: First, the complete separation of Indian and British finances, with India bearing only the costs of its own administration. Second, the gradual Indianization of the civil and military services to reduce the drain of salaries and pensions. Third, the development of Indian industries protected from unfair British competition. Fourth, the investment of Indian revenues in Indian infrastructure and education rather than British imperial adventures.

The continuation of the present system will inevitably lead to the complete impoverishment of three hundred million people. History will judge harshly those who had the power to prevent this tragedy but chose instead to perpetuate it for narrow commercial advantage.

I trust that Your Lordship will give these representations the serious consideration they deserve, not merely as the advocacy of an interested party, but as the documented analysis of a trained economist who has devoted his life to understanding these vital questions.

I remain, Sir, your obedient servant,

Dadabhai Naoroji Member of Parliament for Central Finsbury