UPSC Prelims 2011 question on Home Charges

Analysis

As per the official UPSC answer key, “Home Charges” included statements 1 and 2 only.

1. Funds used to support the India Office in London — Correct
The India Office was the British department responsible for Indian administration. Its expenses, including salaries of the Secretary of State for India and his staff, were paid from Indian revenues. Hence, this formed part of Home Charges.

2. Funds used to pay salaries and pensions of British personnel engaged in India — Correct
Pensions, furlough pay and other allowances of British civil and military officials who had served in India were paid from the Indian treasury, even when they were living in Britain. These were included in Home Charges.

3. Funds used for waging wars outside India by the British — Incorrect
Indian revenues were often used for British imperial wars, such as Afghan and Burmese wars. However, in the technical colonial accounting sense, these were treated as military or imperial expenditures, not as Home Charges.

Extra UPSC Info
Home Charges were payments made from Indian revenues to Britain, usually in sterling.
They included India Office expenses, pensions, interest on debt, purchase of stores in Britain, transport of troops and earlier dividends to East India Company shareholders.
They formed a major part of the Drain of Wealth from India.
Dadabhai Naoroji strongly criticised Home Charges in his Drain Theory.
His famous work was Poverty and Un-British Rule in India.
Other economic critics of colonialism included R.C. Dutt, M.G. Ranade and G.V. Joshi.
Final Takeaway

Home Charges were recurring payments made from Indian revenues to Britain for administrative, pension and related expenses. As per the official UPSC answer key, statements 1 and 2 only are correct.