Final answer:
The economic extraction by British rule in India through high taxes, forced cash crop cultivation, and infrastructure development primarily benefiting British interests led to a financial capital drain from India. Post-independence efforts sought to address this by nationalizing key industries to regain economic self-reliance and control.
Step-by-step explanation:
The economic reasons behind the non-expenditure of the government's earnings within India during its early history, particularly under British rule, revolve around the systemic extraction of wealth and the presence of a financial capital drain. India experienced trade surpluses with Great Britain, indicating that more goods and services were exported than imported, leading to a net flow of financial resources from India to Britain. This situation was known as the "drain" and was a key issue for Indian nationalists who sought independence. The British imposed high excise taxes on Indian goods, forced the growth of cash crops, and utilized Indian tax revenues to pay for colonial expenses, such as infrastructure that primarily benefitted British interests over Indian development. Additionally, during the period after independence, efforts to achieve economic self-reliance included nationalization of key industries under leaders like Nehru, aiming to regain control over economic resources.