What could have been the total wealth that was drained out of India during the British rule?
First, I will try to summarize the nature of loot.
In the first phase of the rule of the British, war indemnity was the primary source of loot. Whenever the opponent loses war, the Britisher's would plunder their territory as war indemnity, and administer them including collection of taxes.
Subsidiary Alliance and Doctrine of Lapse
This was a very clever policy in which the princely states would provide money(precious stones, territory, etc..) to the Britishers in return for the protection of their territories. This helped Britishers grow a large army at the cost of the princely states. The treaty was also such that if they were not able to pay money, the state has to cede a part of the territory and many states did cede their territory(to protect the territory :P). In Doctrine of Lapse, if the current king doesn't have a hier to run the administration, that territory would be annexed by the British.
Heavy taxation of Indian Goods in Britain
Indian handmade cotton was very popular in British and other parts of the world, realizing this, the British raised import duty as high as 400% to some goods which resulted in making the Indian goods very costly and eventually forcing the traders and the artists to quit and look for other jobs.
British Industries needed raw materials which were abuntant in India. Britishers reduced the Indian's from manufacturers to just producer of raw materials due to the tax policies. When the final goods were made, they needed a market which India was. So, they sucked in the raw materials at a fraction of cost and supplied the mill-made goods back. The hand-made goods from India were not able to compete with the mill made goods from England and eventually everyone were wiped out. Indian Industries were also not promoted as they have to cross the bureaucratic hurdles to setup their industries.
At that stage the employement opportunities were also minimal and if one has to join in government service, one has to study in England which was too costly. At most times, even the highest payed Indian could not go higher than the lowest payed Englishmen such was the discrimination against Indians.
Land Revenue System
After the Battle of Buxar, East India Company got rights to collect taxes, and if the first two policies were a direct attack on the princes/kingdoms, this one was a direct attack on common people. They established three systems - Permanent Settlement, Ryotwari System and Mahalwari System whereever these systems were found suitable. Indian population was predominantly agricultural depending on lands for their income. In the permanent settlement system zamindars who were given the responsibility to collect taxes and give a fixed tax to the company. So if the zamindars collected more tax it could benefit them as they have to pay only a fixed amount to the British, and they started collecting more taxes. In Ryotwari system, the land was made saleable and if the farmers fails to pay taxes, their land were ceased. In Mahalwari system, where the cultivators have to provide a % of their yield which was very high.
All the taxes collected were not contributed to the development of India, they were used for
* Home charges - Expenditure incurred in England on behalf of India,
* To fund Military and civil service. Indian Civil Service was the highest paid service and the most sought after at that point.
* To pay Dividend to the shareholders of East India Company.
And even before 1857, most of the wealth was drained away - Princes had to live on pensions from the company, farmers had to give away their lands if they failed to pay taxes, traders were suppressed due to heavy taxes, industrialists had to live with discriminative laws and there were no alternate employement opportunites. So, what remained for people? Nothing.
One the Englishman had told - The system acts like a sponge - sucking water from Ganges and draining it in Thames.
Regarding the estimate of value - I am not sure, but all I can say is it left nothing for the Indians to spend.
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Read this article to learn about the Economic Drain during British Rule in India!Drain theory was the core of nationalist critique of colonialism and the acknowledge high-priest of this critique was Dadabhai Naoroji who, as early as 1867, put forward the idea that Britain was draining and bleeding India and that, too, for nothing.
R.C. Dutt made this theme the subject of his Economic History of India.
Drain, they declared, was the basic cause of India’s poverty. Naoroji observed in 1880,
“It is not the pitiless operations of economic laws, but it is thoughtless and pitiless action of the British policy; it is pitiless eating of India’s substance in India and further pitiless drain to England, in short it is pitiless perversion of Economic Laws by the sad bleeding to which India is subjected, that is destroying India.
John Sullivan, President of the Board of Revenue, Madras, added—Oursystem acts very much like a sponge, drawing up all the good things from the banks of the Ganges, and squeezing them down on the banks of the Thames.
(i) The ‘Drain of wealth’ from India to England started after 1757, when the Company acquired political power and the servants of the Company a ‘privileged status’ and, therefore, acquired wealth through dastak, dastur, nazarana and private trade. For company, becoming a political power meant its ownership of revenues as used in financing ‘investments’ and ‘expenditure’ of ‘colonial budget’.
(ii) The Company servants, after 1757, extorted immense wealth from Indian rulers, zamindars, merchants and common-people, amounting to not less than 6 million between 1758 and 1765; four times more than the total land revenue collection of Bengal in 1765.
(iii) After 1737 and especially after 1765 (year of receiving diwani rights of Bengal) financial structure of the Company had a qualitative change.
(a) Earlier, the Company had to import ‘treasure’ fell (bullion in form of gold and silver) to buy Indian goods for sale in Europe.
(b) After Plassey, however, the import of ‘treasure’ fell sharply in size and yet the export of the Company to England and Europe continued.
(c) This became possible due to appropriation of Indian revenue which was used as the investment of the Company and this investment financed the cost of commodities which the Company had to export from India.
In other words, the company was getting Indian goods for sale outside India for nothing. Investment was thus nothing but a ‘political’ tribute.
This is how there began the ‘Drain of Wealth ‘which was nothing but a unilateral transfer of fund; the Early nationalist leaders made this point central to their economic criticism of the British colonialism.