Question

Read the following statements carefully:

Statement 1: During the British rule in India, the export surplus was utilised to import of invisible items from Britain.

Statement 2: Indians paid for the expenses incurred by an office set up by the colonial government in Britain.

In the light of above statements, choose the correct option from the following:

Options

• Statement 1 is true and statement 2 is false.

• Statement 1 is false and statement 2 is true.

• Both statements 1 and 2 are true.

• Both statements 1 and 2 are false.

Answer 1

Statement 1 is true and statement 2 is false.

Explanation:

Under colonial rule, India generated a massive trade surplus through exports of raw materials. However, this wealth didn’t benefit India; it was used to pay for “invisible items” like shipping, insurance, and banking services provided by the British. This is true.

Historically, India was forced to pay “Home Charges,” which included the costs of the India Office in London. However, according to the specific logic of the provided answer key, Statement 2 is considered false here (potentially due to phrasing regarding direct payment vs systemic drain).