Railroad and Communication Network including Telegraph and Postal Services
Economic Impact of British Colonial Rule: Railroad and Communication Network
- Lord Dalhousie served as Governor-General of India from 1848 to 1856.
- Unlike many previous leaders of the British Empire in India, he saw himself as an Orientalist and a modernizer, believing his rule was one of bringing Britain’s intellectual revolution to India.
- A staunch utilitarian, he sought to improve Indian society along the prevailing Benthamite ideals of the period, determined to carry forward Mill’s vision of an aggressive advancement of Britain’s mission in India.
- In pursuing this goal, however, he ruled with authoritarianism, believing such means most likely to advance India’s material development and progress. His policies — particularly the Doctrine of Lapse — contributed to growing discontent among sections of Indian society, feeding directly into the Great Indian Uprising of 1857, which followed immediately upon his departure from India.
- Dalhousie introduced a series of reforms — the Railway, the Electric Telegraph, and Postal reform — that paved the way for India’s modernisation.
- He remarked: “I have laboured to harness to India’s bullock-cart civilisation three great engines of social improvement — Railways, Uniform Postage, and Electrical Telegraph.”
- A modern sector of politics gradually evolved in India through the rapid spread of education and the development of communication systems such as the railways and telegraph.
Railway Development
- Railways are considered another significant contribution of British rule to the development of modern economic infrastructure. Yet the very manner in which they were constructed makes clear that their primary purpose was to serve the interests of the empire, rather than the genuine needs of the Indian economy.
- Dalhousie introduced this new system of internal communication in India, earning recognition as the “Father of Indian Railways.”
- His famous Railway Minute of 1853 convinced the home authorities of the need for railways and laid down the main lines of their development.
- Under his plan, railway construction was undertaken by British private enterprise, under the supervision and control of the Government.
- Lord Dalhousie took a keen interest in railway projects for both military and economic reasons.
- He believed railways would increase the striking power of British forces, bring British capital and enterprise into India, and connect ports to the interior — giving Britain better access to raw materials for its manufacturing, and opening a new Indian market for British goods.
- In 1853, Dalhousie took the decision to construct railways in India, initially mainly to facilitate army movements.
- Gradually, a further need emerged — to integrate the Indian market and open it to British imports, connecting port cities to internal markets and sources of raw materials.
- The first railway line, connecting Bombay with Thane, was laid down in 1853.
- The following year, a line was constructed from Calcutta to the Raniganj coal-fields; gradually, all important cities and towns were linked by rail.
- The railway lines were not built out of the Indian Exchequer, but by private English companies, under a system known as the “Government Guarantee System.”
- Under this system, private investment was invited from Britain, with the British government guaranteeing a return of 5 per cent interest on such investment.
- The railway projects offer a clear instance of “private enterprise at public risk,” for the following reasons:
- the Government of India provided private enterprise with free grants of land and a guaranteed interest of about 5 per cent on capital outlay — if necessary, drawn from Indian revenues — a return well above the contemporary rate prevailing in Europe;
- free land was granted to companies on a 99-year lease, after which the railway line would become government property — but at any point before expiry, even mere months beforehand, a company could return its lines to the government and claim full compensation for all capital expended, effectively allowing companies to enjoy a guaranteed 5 per cent profit for 99 years and then recover their entire capital besides.
- The multiplier effect of this railway construction boom benefited the British economy, as machinery, railway lines, and even coal, at one stage, were imported from England.
- Technology transfer remained confined to low-technology areas such as plate-laying, bridge-building, or tunnelling.
- India also became a field for British capital investment in railways and agency houses.
- The Government of India had to ensure payment of interest on guaranteed railway stock and debt bonds, and meet its annual Home Charges — invariably increasing India’s public debt.
- On the other hand, India’s export trade with other countries helped Britain overcome its own balance-of-payments deficits, particularly with Europe and North America.
- The constant drainage of Indian wealth through the guarantee system led to considerable reckless expenditure by the companies, imposing an enormous financial burden on the government.
- Two changes were gradually introduced to curb this wastage:
- the construction of some railways was undertaken directly by the Government; and
- a new guarantee system was introduced, under which the railway was declared state property, and the rate of interest paid to companies on their invested capital was reduced to about 3.5 per cent.
- Two changes were gradually introduced to curb this wastage:
Further Development of the Railways in India
- The guarantee system was abolished in 1869, with the government assuming direct responsibility for railway construction.
- It was revived in 1879, with the fixed interest rate now reduced to 4 per cent or less — a system that continued until 1900.
- The government also adopted a policy of buying out private companies involved in railway construction; by the 1920s, all such private companies had been purchased.
- In 1905, the Railway Board was constituted. Subsequently, various committees and commissions were appointed from time to time to guide railway development, including:
- the Mackay Committee (1908);
- the Acworth Committee (1921), which introduced a separate Railway budget; and
- the P.A. Pope Committee (1932).
Railways Emerged as an Instrument to Promote Colonial Interests
- In the planning, construction, and management of railways, the economic and political development of India and its people was never kept in the forefront.
Import and Export
- Railways facilitated the collection and export of raw materials and agricultural goods from India’s interior, while equally enabling imported English manufactured goods to reach the country’s interior.
- Railway lines were laid primarily with a view to linking India’s raw material producing areas in the interior with ports for export — the needs of Indian industries, in terms of their own markets and sources of raw material, were largely neglected.
Discriminatory Tariff
- Railway freight rates were fixed so as to favour imports (of finished goods) and exports (of raw materials), while discriminating against the internal movement of goods — making it more difficult and costlier to distribute Indian goods than to distribute imported ones.
- The system provided no real interconnection between internal market cities, a bias further betrayed by these preferential freight charges.
Ecological Imperialism
- Railways contributed to a form of ecological imperialism, facilitating the exploitation of forest resources, since timber extracted from these forests was used to lay railway sleepers.
- In certain areas, construction work disturbed local ecology and subverted natural sewage systems — in Bengal, for instance, it contributed to a malaria epidemic in the 19th century.
Financial Imperialism
- Railway investment encouraged capital goods industries in Britain, by offering an outlet for the investment of English capital in railway companies operating in India.
- In most countries of Western Europe and the USA, railway construction had spurred the growth of auxiliary industries — engineering, iron and steel, mining, and the like — creating what is termed the “backward linkage effect.” India, however, was denied this auxiliary industrial development, since railway companies followed a policy of importing all that they needed rather than sourcing it locally.
Home Charges
- Nationalists frequently complained of the constant drainage of wealth through the payment of guaranteed interest, which encouraged considerable wasteful railway construction.
- Their main objection concerned the choice of priority areas for such public investment — many nationalists believed irrigation would have been a far more suitable area for investment, promising greater social benefit.
- Railway development thus increased India’s Home Charges, as heavy interest (5 per cent) was paid to British investment companies by the government, causing substantial losses to the public exchequer in the process.
Administrative and Military Motive
- The government also invested directly in railway construction, mainly in frontier regions, to meet the needs of army movement, or for “famine lines” in scarcity-prone areas. Railways thus helped the British government:
- strengthen administrative control over distant parts of India;
- move the army swiftly to quell internal disturbances or repel foreign attacks; and
- guard India’s frontiers against other powers.
- Railways significantly strengthened military striking power, allowing the British to easily suppress peasant and tribal revolts through rapid mobilisation and troop movement.
- Lord Hardinge stated that Indian railways were planned for “the prevention of insurrection, speedy termination of war, and safety of empire.”
- Though the railways produced several unintended positive impacts — uniting India, contributing to the rise of nationalism, and yielding certain economic benefits — they nonetheless functioned primarily as an instrument of colonisation in India.
- Nevertheless, by the time the British left in 1946/47, India possessed 65,217 kilometres of railway track, covering 78 per cent of the country’s total area.
- The railways also encouraged the construction of feeder roads and a few strategic roads interconnecting different regions of India.
- This did, to some extent, integrate the Indian market, providing a cheaper mode of transport for both people and goods — an advantage Indian businesses would later exploit after Independence.
- Beyond facilitating trade and commerce and minimising distances, the railways went a long way towards uniting India.
- As early as 1865, Sir Edwin Arnold wrote: “Railways may do for India what dynasties have never done — what the genius of Akbar the Magnificent could not effect by Governor, nor the cruelty of Tipu Sahib by violence — they may make India a nation.”
The Electric Telegraph
- Lord Dalhousie may equally be regarded as the “Father of the Electric Telegraph” in India, having introduced the Electric Telegraph system in 1852.
- O’Shaughnessy was appointed Superintendent of the Electric Telegraph Department in 1852; obstacles to its establishment seemed insurmountable, but were overcome through his untiring zeal and energy.
- The first telegraph line, from Calcutta to Agra, opened in 1854, covering a distance of 800 miles; by 1857, it had been extended to Lahore and Peshawar.
- Nearly 4,000 miles of electric telegraph line were eventually constructed, connecting Calcutta with Peshawar, Bombay, and Madras, along with other parts of the country.
- In Burma, a line was laid from Rangoon to Mandalay — enabling people to send messages between distant places with remarkable ease.
- The Telegraph Department proved of great assistance to the British during the Great Rebellion of 1857–58. As one rebel remarked at the time of his execution: “It is that accursed string (the telegraph) that strangled us.”
Postal Reforms
- The foundations of the modern postal system in India were laid under Lord Dalhousie.
- Following the findings of an expert commission, a new Post Office Act was passed in 1854.
- Under this system:
- a Director-General was appointed to supervise the work of post offices across all the Presidencies;
- a uniform rate of half-anna per letter was introduced, irrespective of the distance travelled; and
- postage stamps were issued for the first time.
- A postal department was established for the entire country.
- As a result of these reforms, post offices — which had until then been a drain on the treasury — became a source of government revenue, while the people benefited considerably from this modern postal system.
- The social, administrative, financial, and educational development that followed from the extension and improvement of this system speaks volumes for Dalhousie’s commitment to promoting India’s material progress.
- The railways and other communication systems — postal and telegraph alike — undeniably had a significant social and cultural impact on Indian society and nation-building, contributing to the rise of nationalism and helping unite India. It is worth remembering, however, that these outcomes were, on the whole, the unintended results of British imperialism.
