ECONOMIC CAUSES

Bahadur Shah Zafar- Last Mughal Emperor of India

a) During the first two hundred years (sixteenth and seventeeth centuries) the East India Company confined its activities to trade and commerce and had no political intention. The company purchased textiles, indigo, saltpetre, spices and foodgrains from Indian market in exchange for gold and other precious metals. It thus played a useful role by exporting Indian goods and by increasing the production the Indian goods became so popular that the British government had to pass a law in 1720 forbidding the use of Indian textiles. However during the 18th century, the pattern of trade went through a drastic change.

With the advent of the Industrial Revolution, England developed its own textile industry and with that the dependence on Indian textiles came to an end. The result was that instead of buying finished textile goods from India, the British company purchased raw cotton and exported the same to England. India soon became a raw material producing country, supplying cotton and jute to the factories in Britain. Cotton was processed into finished cloth and exported back to India. British traders made massive profit through this two way trade.

Demand for Indian textiles having reduced, the local handloom industry incurred heavy losses and suffered badly. The poor Indian weavers could not compete with the machine made goods imported from England. Moreover, the Company used its political resources to buy the best quality cotton from the Indian markets leaving no scope for the Indian weavers to produce good quality products. Gradually, the Indian handicraft and Cottage industries died out.There was major unemployment problem and that resulted in resentment among workers against the British rule. The little patronage that they received from the native princes also was gone because of the annexations of those dominions. The miserable conditon of the working class led to this rebellion against the Britsh Rule. The trade and commerce of the country was monopolized by the by the East Indian Company. No efforts were made to improvise on the living conditions of the people. Cruel exploitation of the economic resources made people miserable leading to periodic famines.

The Attack of Mutineers, July 30, 1857

b) The British confiscated the lands and properties of many landlords and Talukdars, especially those of Oudh. These very disgruntled landlords became leaders of the Revolt.

c) Thousands of soldiers under the employment of the native states became jobless when the states were annexed to the British dominion. As many as 60,000 families lost their livlihood, when Oudh's army was disbanded. Naturally the disbanded soldiers were seething with anger and were seeking an opportunity to strike at the new regime which had deprived them of the their livlihood.

d) Gradual disappearence of many states also deprived those Indians who held civil and judicial posts in the states, of their jobs. Even religious preachers were divested of their livlihood with the extinction of native kingdoms. The people who were affected rose against the British.