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In the second half of the 19th century, both the direct administration of India by the British Crown and the technological change ushered in by the industrial revolution had the effect of closely intertwining the economies of India and Great Britain. In fact many of the major changes in transport and communications (that are typically associated with Crown rule of India) had already begun before the Rebellion. Since Dalhousie had embraced the technological revolution underway in Britain, India too saw rapid development of all those technologies. Railways, roads, canals, and bridges were rapidly built in India and telegraph links equally rapidly established so that raw materials, such as cotton, from India's hinterland could be transported more efficiently to ports, such as Bombay, for subsequent export to England. Likewise, finished goods from England, were transported back, just as efficiently, for sale in the burgeoning Indian markets. Massive railway projects were begun in earnest and government railway jobs and pensions attracted a large number of upper caste Hindus into the civil services for the first time. The Indian Civil Service was prestigious and paid well. It remained politically neutral. Imports of British cotton cloth captured more than half the Indian market in the late 19th and early 20th centuries. Industrial production as it developed in European factories was unknown until the 1850s when the first cotton mills were opened in Bombay, posing a challenge to the cottage-based home production system based on family labour.

Taxes in India decreased during the colonial period for most of India's population; with the land tax revenue claiming 15% of India's national income during Mughal times compared with 1% at the end of the colonial period. The percentage of national income for the village economy increased from 44% during Mughal times to 54% by the end of colonial period. India's per capita GDP decreased from 1990 Int'l$ 550 in 1700 to $520 by 1857, although it later increased to $618, by 1947.