The British were shaken by the Revolt and to prevent its recurrence, the control of India was shifted from the East India Co. to the British Empire. From now onwards, the Governor-General was called the Viceroy signifying that the formal control of Indian affairs was now with the British Queen or the Crown.
The period 1860 - 80 was marked by a mass awakening. It was also marked by a sharper understanding of the economic consequences of the British rule by Indian thinkers. The most outstanding economic critique of the British rule was by Dada Bhai Noroji, the Grand Old Man of India. Noroji was a succesful Parsi businessman, but left it for the national cause, stayed in London and used every public platform to drive home his drain theory. Other economic thinkers who worked similarly include Romesh Chandar Dutt, a retired ICS Officer and Mahadev Gobind Ranade. The three leaders along with hundreds of journalists, made public the disastrous economic effects of the foreign rule clearly, thus creating a climate for national resurgence. The focal point was Noroji’s theory of Drain of Wealth, which he had given in his 1867 classic Poverty And Un-British Rule In India, regarded as an authentic economic treatise of the India economy then. This was the first book that gave estimates of national income for India and convincingly proved that after the British, the economic standards of India had fallen overall.
The theory talked of the drain of wealth of India by the British like using India as a supplier of raw goods and as a market for finished goods, exploitative revenue systems, ruin of Indian handicrafts, remittances to England etc. It was his understood by all easily and sharpened economic understanding of the British rule.
The period through 1860 - 1870 saw many new political associations, all of which were political precursors to the Indian National Congress. Examples are Indian Association founded by Surender Nath Banerjea (1876), the Bombay Presidency Association by Dinshaw Petit. Besides, a sign of new political life was the arrival of several nationalist newspapers which dominated the Indian scene till 1918 --- The Hindu, The Tribune, Bengalee, Mahratta and Kesari.
The political awakening that had begun after the 1857 Revolt culminated in 1885 in the Indian National Congress, the apex organization guided and led the movement for India’s independence. It was the first-ever organized all-India attempt to create a political platform to resist the British rule. Seventy-two men, mostly journalists, had gathered in Bombay in December, 1885 to form the Congress. A retired British civil servant, Allen Octavian Hume, was the brain behind it and the first President was Womesh Chandar Banerjee.
The myth of the Congress being a safety-valve for the British has been perpetuated for long. Some historians believe that the Congress was actually created by the British to let the more vocal elements in among India release their steam peacefully without harming the British interests.
A plethora of historical evidence disproves this theory, largely popularized by the Extremists to discredit the Moderates after the Congress split. The fact is that no Indian could have ever started the Congress. AO Hume was used as a political shield by the Congress to guard itself against immediate suppression by the British. To rephrase it, Hume was used as a political lightening conductor by the Congress.
India had just entered the process of becoming a nation. The first major goal of the Congress was to promote this process, to weld India into a nation, because until now India had been accused by the British of being a mere group of different geographical and linguistic entities. Its goals were the development of a national political platform, a sense of national unity and better political awakening.
From the beginning, the Congress was conceived of as a national movement. It absorbed different political trends, diverse social ideologies and varying economic approaches. The one common factor was adherence to democracy and secular nationalism.