- Definition: “Drain” refers to the unilateral transfer to Britain of social surplus and potential investible capital.
- This was done by the colonial state and its officials from India.
- Effects on Economic Structure:
- A very large part of India’s savings was appropriated by the colonial state.
- Used for military expenditure and colonial administration.
- Only a very small part was spent on development of agriculture, industry, or social infrastructure.
- This denied India crucial capital for investment and expansion.
- Contributed to the complete backwardness and underdevelopment of the Indian economy.