How did the drain of wealth theory, as proposed by Dadabhai Naoroji, explain India’s poverty under British rule?

Correct option is D

The correct option is (D) Export of Indian resources and wealth to Britain without fair compensation.

Explanation:
Dadabhai Naoroji's Drain of Wealth Theory, proposed in the late 19th century, argued that India's wealth was being drained to Britain through unfair economic policies. According to Naoroji, the British Empire was exploiting India's resources, including its raw materials, labor, and wealth, and sending these to Britain without providing equivalent benefits to India. This led to economic impoverishment and stagnation in India, contributing to its widespread poverty during British colonial rule.

Information Booster:

• The theory highlighted how India’s wealth was being transferred to Britain in the form of profits, land revenue, raw materials, and taxes, while India’s people remained impoverished.

• Naoroji's calculation of the “drain of wealth” suggested that around 1/4th of India's national income was transferred to Britain every year.

• This theory was a significant early critique of British colonial policies and laid the foundation for later economic nationalist movements in India.

• Drain of Wealth played a critical role in highlighting the exploitative nature of British rule and was a key element in shaping India's economic independence movement.