With reference to the general trends in British Era Economy of India, which among the following is a correct statement?

Answer: [D] British Capital Investment was the most important reason behind the increased debt burden in India in the last 100 years of the British Rule

Fourth is the correct statement.The first statement which says that India's Foreign Trade both in Volume as well as Value decreased is incorrect, because the trade in volume as well as value had increased. The British has used the data to negate the theory of economic drain propounded by Indians such as Dada Bhai Naoroji. The second statement which says that Drain of Wealth from India was mainly due to decreased exports  is also incorrect because the exports had increased. And even the increased exports contributed to the Economic Drain because, these increased exports did not add anything in the material value of the country. The exports proceeds were used to pay the debts and meet the expenditures. The Third statement which says that population generally migrated from Rural areas to urban areas is also wrong. This is because in British Era, the handicraft industries in the Urban areas got decayed and the population Pressure on land increased and more and more people moved to rural area leading to more ruralization of India.

This question is a part of GKToday's Integrated IAS General Studies Module