The colonial state was obviously not devised for fashioning the economy of India in the manner demanded by British imperial interests; but it was the most important instrument in serving that purpose. The professed political ideology of late 19th and early 20th century British rulers has been described as 'laissez faire' plus policeman. But departures from non-interventionism were frequent, and fundamental.

Hence, for example, the heavy governmental support to British private capital in Indian railways, in the form of guaranteed interest irrespective of profit and loss. This was evidently beneficial to British business interests. On the other hand laissez faire was insisted upon in the sphere of tariff policy: refusal to put any significant tax burden on imported Manchester cloth for instance, was good for British interests and bad for all Indian mill owners.