Which of the following statements with regard to construction of railways in colonial India by the British companies is/are NOT true ?
- 1. The companies were guaranteed a return of 5 per cent on their investment by Government of India
- 2. The railways were to be managed mainly by the Government
- 3. There was no system of preferential freight charges
- 4. The companies were to get the land free from the Government
1 and 3
2 and 3 only
4 only
2, 3 and 4
Answer is Right!
Answer is Wrong!
This question was previously asked in
UPSC CAPF – 2015
1. The companies were guaranteed a return of 5 per cent on their investment by Government of India: This is TRUE. Under the ‘guarantee system’, private British companies were encouraged to invest in railways with a guaranteed minimum return, initially 5%, on their invested capital by the Indian government. This system proved costly for the Indian treasury.
2. The railways were to be managed mainly by the Government: This is NOT TRUE. Initially, the railways constructed under the guarantee system were managed by the private British companies themselves. Government management of railways became more prominent later, after the expiry or purchase of these companies’ contracts.
3. There was no system of preferential freight charges: This is NOT TRUE. There *was* a system of preferential freight charges which favored the export of raw materials and import of finished goods over the movement of domestic goods within India. This policy harmed Indian industries and promoted the colonial economic pattern.
4. The companies were to get the land free from the Government: This is TRUE. The land required for railway construction was provided free of cost by the Government of India to the companies.
The statements that are NOT true are 2 and 3.