Question

With reference to the period of colonial rule in India, "Home Charges" formed an important part of the drain of wealth from India. Which of the following funds constituted "Home Charges"?

1. Funds used to support the India Office in London.

2. Funds used to pay salaries and pensions of British personnel engaged in India.

3. Funds used for waging wars outside India by the British.

Select the correct answer using the codes given below:

1. 1 only
2. 1 and 2 only
3. 2 and 3 only
4. 1, 2 and 3

Answer 1

Correct Answer - Option 4 : 1, 2 and 3

The correct answer is 1, 2 and 3.

• The drain of wealth:
  • It refers to the economic critique of colonial rule in India that was advocated by the early nationalists.
  • They described the constant one-way flow of wealth from India to England for which India received no returns as 'Drain of Wealth'.
  • This occurs when gold and silver flow out of a country as a result of an adverse trade balance.
• Home charges: 
  • With reference to the period of colonial rule in India, 'Home Charges' formed an important part of the drain of wealth from India.
  • ‘Home Charges’ refers to the expenditure incurred in Britain by the Secretary of State on behalf of India. They include:
    • Funds used to support the India Office in London. Hence, statement 1 is correct.
    • Funds used to pay salaries and pensions of British personnel engaged in India. Hence, statement 2 is correct.
    • Funds used for waging wars outside India by the British. Hence, statement 3 is correct.
    • Dividends on East India Stock
    • To pay the interest in Home debt.
    • Furlough and retired pay to members of the Indian Military and Civil Services when at Home
    • Charges of all descriptions paid in this country connected with the British troops serving in India and a portion of the cost of transporting the British troops to and from India.