NDA (I) 2017 General Ability Test · Question 132 of 149

Correct — B, the statement about a 15 per cent guarantee. One number in that sentence is wrong. The guarantee offered to British railway companies was FIVE per cent, not fifteen: when the Great Indian Peninsula Railway was incorporated on 1 August 1849 the guarantee system gave the private English companies free land and an assured five per cent rate of return. The rest of the sentence is sound — the money did come out of Indian revenues when traffic could not cover the promised return — which is exactly why the inflated figure is the trap.

• (a)The main purpose of the setting up of railways in India was to serve the interest of the empire — This was a feature, so it cannot be the answer. The network was built to move troops quickly, to carry raw cotton, jute, wheat and oilseeds to the ports and to push British manufactures inland.
• (c)The construction work disturbed ecology — Also a feature. Millions of wooden sleepers, fuel for the locomotives and timber for bridges came from Indian forests, and embankments cut across natural drainage — the ecological cost of the railway is a standard part of the colonial-economy syllabus.
• (d)The construction of the railways was planned in such a way that it connected the internal markets with the ports, but provided no interconnection between internal market cities — This is the standard textbook description of the colonial route pattern — trunk lines radiating from Bombay, Calcutta and Madras into the producing districts, with little lateral linking of inland towns to one another. It describes the network, so it is not the answer.

India's railways were built by private British companies under a guarantee: the East India Company, and later the Crown, gave them free land and promised a fixed return on their capital, meeting any shortfall out of Indian revenues. Because the companies could not lose, they had little reason to build cheaply, and the arrangement became one of the standard exhibits in the nationalist critique of colonial finance.

Almost every colonial-economy question of this type turns on a single figure or a single word. Here everything in option (b) is right except the percentage, so a student who recognises the guarantee system but not the rate will still be caught. Fix the number: five per cent, from 1849, payable out of Indian revenues. It is worth adding that the network built under that system was real and large — the critique was of who paid for it and whom it was laid out to serve, not of whether it existed.

• The Great Indian Peninsula Railway was incorporated on 1 August 1849 under the guarantee system.
• The guarantee gave British companies free land and a five per cent assured rate of return.
• Any shortfall in that return was met from Indian revenues, not by the investors.
• The trunk routes ran from the interior to the three port cities of Bombay, Calcutta and Madras.
• Dadabhai Naoroji and R. C. Dutt built the nineteenth-century economic critique of arrangements of this kind.

• Accepting a sentence because its argument is familiar, without checking the number inside it.
• Confusing the guaranteed return with the dividend actually earned by the companies.
• Assuming the whole statement must be wrong when only one element has been altered.

Colonial-economy items usually alter a single figure — a percentage, a year or a share — inside an otherwise standard sentence, and ask which statement is not a feature.

• practice — not a real PYQ

  Under the guarantee system, British companies building railways in India were assured a return of

  • (a)Two per cent
  • (b)Five per cent
  • (c)Ten per cent
  • (d)Fifteen per cent

  Answer(b) Five per cent — guaranteed, with free land, from the incorporation of the Great Indian Peninsula Railway in 1849.

• practice — not a real PYQ

  The trunk railway lines of colonial India were laid mainly to

  • (a)Link inland market towns to one another
  • (b)Carry raw materials from the interior to the port cities
  • (c)Serve pilgrimage centres
  • (d)Connect the hill stations with the plains

  Answer(b) Carry raw materials from the interior to the port cities — and to move troops and British goods the other way.