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Economy of India under the British Raj
The economy of India under the British Raj describes the economy of India during the years of the British ''Raj'' from the 1850s to 1947. During this period, the Indian economy essentially remained stagnant, growing at the same rate (1%) as the population.〔B. R. Tomlinson, ''The Economy of Modern India, 1860–1970'' (1996) p. 5〕
==The fall of the rupee==
: ''See also: Gold standard''
After its victory in the Franco-Prussian War (1870), Germany extracted a huge indemnity from France of £200,000,000, and then moved to join Britain on a gold standard for currency. France, the US and other industrializing countries followed Germany in adopting a gold standard throughout the 1870s. At the same time, countries, such as Japan, which did not have the necessary access to gold or those, such as India, which were subject to imperial policies that determined that they did not move to a gold standard, remained mostly on a silver standard. A huge divide between silver-based and gold-based economies resulted. The worst affected were economies with a silver standard that traded mainly with economies with a gold standard. With discovery of more and more silver reserves, those currencies based on gold continued to rise in value and those based on silver were declining due to demonetisation of silver. For India, which carried out most of its trade with gold-based countries, especially Britain, the impact of this shift was profound. As the price of silver continued to fall, so too did the exchange value of the rupee, when measured against sterling.
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