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Historianunkil

@SudsG5

Feb 6

How to bankrupt a country legally: British India during World War II

It is widely accepted that Britain extracted enormous wealth from India under colonial rule. What is less understood is how technically sophisticated and legally sanitised the extraction during World War II was, and how it devastated India’s economy while remaining defensible on paper.

This is a primer on how the British Raj financed an imperial war by transferring the burden onto India, primarily onto its poorest population.

Apologists for the British Raj often argue that wartime requisitioning from India was legitimate because Britain “paid” for what it took. This argument collapses on inspection.

The Raj did not pay in hard currency such as sterling. It paid largely through internal accounting credits and rupee balances, while simultaneously expanding India’s public debt. These so-called payments were claims on the Indian government itself, not real transfers of value.

Explosion in revenue and debt

Between 1939–40 and 1945–46:

Total government revenue (centre plus provinces) rose from approximately ₹180 crore to about ₹590 crore, a more than threefold increase.

Public debt composition changed dramatically. Sterling debt fell from roughly £440 million to about £34 million, while rupee debt rose from roughly ₹450 crore to about ₹2,280 crore.

This mattered because sterling liabilities constrained Britain. Rupee liabilities did not. India was effectively forced to finance the war internally.

Price controls for the empire, market prices for Indians

The colonial government fixed prices at which it purchased essential goods for the war effort such as food grains, raw cotton and industrial inputs. At the same time, civilian markets were largely exposed to rising prices.

The result was predictable.
The state bought cheaply.
Ordinary Indians paid more.
This policy transferred purchasing power from the population to the war machine while disguising it as procurement.

Deficit financing and money printing

To service its expanding rupee debt, the Raj relied heavily on deficit financing.

Currency in circulation rose from about ₹179 crore in August 1939 to roughly ₹1,200 crore by December 1945, close to a sevenfold increase.

This expansion was not matched by an increase in consumer goods, because wartime procurement diverted resources away from civilian use.

The result was severe inflation.

Taxation shock

Taxation increased at a pace unprecedented in Indian history.

Tax receipts rose from roughly ₹50 crore in 1939–40 to about ₹400 crore by 1943–44, an approximately eightfold increase within four to five years.

This occurred alongside shortages and rising prices. The population faced lower supply, rapidly depreciating money, and sharply higher taxes at the same time.

War spending dominance

War expenditure reached around 57 percent of total government spending in 1941–42.

From 1942 to 1946, war spending averaged about 42 percent of total expenditure.

India’s fiscal system was effectively converted into a war-financing apparatus.

Inflation outcomes

Wholesale Price Index inflation reached around 50 percent by early 1943.

By 1946, prices were roughly 150 percent higher than pre-war levels in 1939.

Savings were wiped out, wages lagged prices, and food became unaffordable for millions.

These trends are well documented in RBI wartime bulletins and later economic analyses.

The crucial comparison with Britain

The argument that wartime inflation was inevitable collapses when compared with Britain itself.

In the UK, paper currency increased by roughly 180 percent.

The British price index rose by about 74 percent over the same period.

British policymakers clearly understood the inflationary risks and adopted controls to protect their domestic population. India was not afforded the same protection.

Economists warned. The government dismissed them.

Indian economists repeatedly warned that unchecked deficit financing and procurement would cause catastrophic inflation. These warnings were dismissed by the colonial government as alarmist nationalism.

The then Governor of the Reserve Bank of India acknowledged the criticisms but downplayed their severity, even as inflation in India ran several times higher than in Britain.

The critics’ proposals were not radical. They closely resembled measures adopted by the United States and the UK to stabilise their own home economies.

The imperial response

The British government under Winston Churchill rejected these concerns as exaggerated and politically motivated.

This dismissal occurred in mid-1943, precisely when:

Inflation had already crossed 50 percent

Civilian purchasing power had collapsed

The Bengal famine was beginning

Official denial persisted even as millions faced starvation.

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Historianunkil

@SudsG5

Sep 2, 2025

https://twitter.com/modadGeoP/status/1962760445804032501

The ignorance!

To begin with, the north African campaign.

The 8th army OOB had born the 4th and 5th Indian divisions + the 3rd Indian motor brigade.

Indian soldiers formed around 25% of the total roll call strength of the combat elements of the 8th army.

https://twitter.com/modadGeoP/status/1962760445804032501

2/n remove these from the OOB and Rommel would have reached the Suez within a month after he landed.

Then you have the rear elements, the RIASC (Indian service corps) basically the drivers, mechanics, mule drivers,camel drivers formed the back bone of the 8th army supply chain

3/n again, remove this and the 8th army would not have had food, fuel, water or ammo.

Then the Indian labour units, 70% of the labour force in North Africa including in the ports of Suez and Alexandria, 10's of thousands served here.

Remove this and you don't even have

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Historianunkil

@SudsG5

Aug 26, 2025

https://twitter.com/riauncovers/status/1959986687335125465

It's not the gas chambers that were the real killers (I mean they did kill 7-9 mn total on the Holocaust) but in absolute terms it was the "Hunger plan". Formulated by this bureaucrat, it essentially called for not feeding Slavic peoples and letting famine and epidemics kill them

https://twitter.com/riauncovers/status/1959986687335125465

2/n the Germans managed to kill around 12-14 mn Slavs with this method but the Raj? It killed close to 50-60 mn in famines and another 30-40 mn in epidemics (which starving people are greater prey to) meaning the Raj achieved kill rates of 80-100 mn in just 3 decades

3/n a study of our pop in this period will establish the genocide visited upon India.

As you can see, the period 1891 to 1901 saw 89 mn excess mortality (India at 13% growth rate should have been at 327 mn but is at 238 mn. That's the equivalent of 10 holocausts

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Historianunkil

@SudsG5

Jul 24, 2025

https://twitter.com/sidhant/status/1948251104145539454

Everyone talks about the England French, French Prussian / German rivalry but this Siam vs Khmer feud has been going on for centuries now! A brief thread.

https://twitter.com/sidhant/status/1948251104145539454

1/n It all started with a war over the Khmer vassal state of Luov, which was annexed after 30 years of fighting in 1350. Around this time the Thai (Siem) shifted their capital from Sukothai to Ayutta which was much closer to Angkor.

2/n From 1350-1430 it was a near endless war, mostly triggered by an expansionist Siem. In 1420 though the Khmer under a very aggressive king defeated multiple Siem armies and even tried to push their way into Ayuta itself.

Read 12 tweets

Historianunkil

@SudsG5

Jun 17, 2025

When the US almost sanctioned India into oblivion thanks to Nehru's stupidity, utter, gobsmackingly low IQ stupidity. A thread about when he greenlit Thorium sales to China....

2/
The export was conducted by a PSU—likely Indian Rare Earths Ltd.—and had an explicit license from the Government of India.
Customs in Mumbai were instructed to clear the cargo without delay. There was no ambiguity. This was a state-approved sale of nuclear-grade material to

3/ Communist China—barely years before the 1962 war. The United States caught wind of the shipment.

The U.S. ambassador in Delhi urgently approached Nehru and asked him to recall the consignment.

Nehru’s reply?

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Historianunkil

@SudsG5

Apr 21, 2025

https://twitter.com/SudsG5/status/1913932063276994681

A thread on how El Salvador became the murder capital of the world thanks to Mr James Hill, courtesy the US govt as well.

https://twitter.com/SudsG5/status/1913932063276994681

1/n In the 1890s, James Hill—an Anglo coffee baron—bribed his way into El Salvador’s government.
With US backing, he helped privatize all land.
Why?
Because El Salvador’s soil was so fertile, people didn’t need wages to eat.
That was bad for profit.

2/n Land that once grew wild food for all was now sold to 12 Anglo coffee companies, Hill’s being the largest.
But there was a problem:
People still had access to food. So Hill made plantation rules:
If a worker ate a fruit off a tree, they were guilty of theft and shot.

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