Through his studies, Dadabhai Naoroji publicized the facts on the deterioration of Indian economy under the British rule. His studies were based on empirical data. He established the fact that a huge amount of money was flowing to Britain every year. He proved that the drain of wealth was the root cause of poverty and starvation in India. This was known as ‘Drain Theory’.
Indian wealth flew to Britain by the export of Indian raw materials, salary and pension to the British officers in India, profit gained through the sale of the British products in India and tax from India. Dadabhai Naoroji could make the people aware that the economic policy of the British impoverished India. The common people realized that the poverty and exploitation they faced had been the creation of the British. It reinforced their anti- British attitude which finally led to the growth of nationalistic feeling among the people.
