British rule in India was based on which economic system?

The correct answer is Option (3) → Capitalism

Option (1) Socialism — Incorrect. Under socialism the means of production are held by society or the state and production is planned for people’s needs rather than private profit. British rule did the reverse: every policy was geared to the profit of British capitalism.

Option (2) Feudalism — Incorrect. In a feudal order landed lords live on a share of the peasants’ produce, taken by custom and force. Pre-capitalist conquerors ruled in a similar way: they took tribute and did not interfere with the economic base. British colonialism changed that base itself.

Option (3) Capitalism — Correct. Capitalism is an economic system in which the means of production are privately owned and organised to accumulate profits within a market system. British colonialism, based on a capitalist system, directly interfered to ensure the greatest profit to British capitalism: it changed land laws, decided which crops ought to be grown and meddled with manufacturing.

Option (4) Mixed Economy — Incorrect. A mixed economy has a public sector and a private sector working side by side, the path independent India chose with the expansion of the public sector. Colonial rule built no such economy for Indians’ welfare; it served British profit.