(a) “British colonial rule in India executed a systematic economic exploitation that involved the extraction of India’s resources and wealth to…

During the colonial period, India’s resources and wealth were exploited and diverted to Britain by transforming the country into exporter of raw materials and importer of finished industrial products from Britain. Though India was able to generate export surplus but it did not result in any flow of gold or silver into India. Rather, this was used to make payments for the expenses incurred by an office set up by the colonial government in Britain, expenses on war, fought by the British government, and the import of invisible items, all of which led to the drain of Indian wealth to Britain.

The rationale behind the disinvestment policy of India under the $\displaystyle 1991$ reforms was primarily to improve financial discipline and facilitate modernisation. It was also envisaged that private capital and managerial capabilities could be effectively utilised to improve the performance of PSUs and provide strong impetus to the inflow of Foreign Direct Investment.