The Indian Middle Class firmly believed that Britain had imposed a colonial economy on India

The foundation of the Indian nationalist movement lay in the fact that increasingly British rule became the major cause of India’s economic backwardness.

It became the major barrier to India’s further economic, social, cultural, intellectual and political development. Every class, every section of Indian society, gradually discovered that its interest was suffering at the hands of the foreign rulers.

The rising intelligentsia- the educated Indians – used their newly acquired modern knowledge to understand the sad economic and political condition of their country. Those who had earlier, as in 1857, supported the British ruler in the hope that, though alien, it would modernise and industrialise the country were gradually disappointed.

Economically, they had hoped that British capitalism would help develop India’s productive forces as it had done at home. Instead, they found that British policies in India, guided by the British capitalists at home, were keeping the country economically backward or underdeveloped and checking the development of its productive forces.

The rising Indian capitalist class was slow in developing a national political consciousness. But it too gradually saw that it was suffering at the hands of imperialism. Its growth was severely checked by the trade, tariff, taxation, and transport policies of the government. As a new and weak class, it needed active government help to counterbalance many of its weaknesses. But not such help was given.

Instead, the Government and its bureaucracy favored foreign capitalists who came to India with their vast resources and appropriated the limited industrial field. Indian capitalists were particularly opposed to the strong competition from foreign capitalists.

The Indian capitalists also, therefore, realised that there existed a contradiction between imperialism and their own independent growth, and that only a national government would create conditions for the rapid development of (Indian trade and industries.