ECON03GE3A

The Colonial Legacy

Reference

The Colonial Structure

The four basic features of the colonial structure in India:

  • Complete but complex integration and enmeshing of the colony with the world capitalist system in a subordinate position.

  • Unequal exchange and internal disarticulation of the economy

  • Availability and utilisation of surpluses for development was low.
    • Why was the availability of surplus low?
      • Drain
      • Appropriation by the colonial state
      • Landlords and moneylenders
  • Policies of the colonial state in the subordination of India.

Capital Formation and Savings 1901-46

Colonial Impact on Agriculture

  • Severe impact during the first half of the twentieth century.
    • Per capita agricultural production declined by 0.72% per year during 1911-14.
    • Per capita food grain output declined by 1.14% per year.
  • Colonialism made the agrarian structure extremely regressive.
    • Zamindars failed to invest in land.
    • More reliance on rack-renting.
    • Peasants lost land to the moneylenders.
    • Sub infeudation, tenancy, and sharecropping dominated the zamindari and the ryotwari areas.

  • No change in the technology or techniques and inputs.
    Technology Statistics
    No. of ploughs used in India (late 1930s) 32 million
    Agricultural department selling improved ploughs 7 to 8 thousand per year
    Use of improved seeds (1922-23) 1.9%
    Use of chemical fertilizers 2000 tonnes per year (1898-1923) 17,400 tonnes per year (1919-24)
    Number of agricultural colleges in 1946 9 with 3110 students
    Investment in terracing, flood control, drainage and de-salinization of soil Nil
    % of total cultivated area irrigated 26.7% in 1940

Colonial impact on Industry

  • Decline in urban handicrafts
  • Slow growth of modern industries
    • Confined to jute and textile
    • Iron and steel after 1907
    • Sugar, cement, and paper after 1930s
      • Depression induced weaknesses
  • Cotton and jute accounted for 30% of workforce until 1946.
  • Growth rate: 3.8% per annum
  • Share of industry: 7.5% in 1918, 3.8% in 1913

Colonial impact on Industry

  • Employment:
    • In 1939, Population = 389 million, employed = 2 million
    • In 1951 - 2.3% employed in industry

  • Capital goods industry
    • Absence of capital goods industry.
    • Relied mostly on imported machinery or tools.
    • 89.9% of capital goods imported in 1950.

Colonial impact on industry

  • Banking Sector/industry
    • Underdeveloped
      Year Statistics
      1914 1 bank office for 1.7 million people
      1940 1 bank office for 90,000 people
      2009 1 bank office for 14 people
  • Trade
    • Imports → indigenous industries, modern industries.
    • Displaced indigenous industries.

Colonial impact on industry

  • Railways
    • Commercial revolution → colonialisation → exports and distribution.
  • Foreign investment
    • Uniliver, Imperial Chemical Industries, Dunlop, and General Motors entry after 1918.
    • Contributed to ‘guided underdevelopment’.
    • Production and export of raw materials and food stuffs.
    • Catered to foreign markets.

Other economic indicators of backwardness

Other economic indicators of backwardness

Year Statistics
Cereals and Pulses availability (1950) 394.9 grams/day/person
Availability of cloth (1950) 10 meters/year/person
Death rate (1950) 27.4 / 1000 persons
Infant Mortality Rate (1950) 175 - 190 / 1000 live births
Life expectancy (1950) 32 years
No of medical colleges (1943) 10 with 700 graduates
No of medical doctors (1951) 18000
Cases of small pox, plague, and cholera deaths in millions
% of illiterate population (1947) 88%

Summary::India’s economic profile in 1940s

  • Stagnating per capita national income.
  • Abysmal standard of living.
  • Stunted industrial development
  • Stagnant, low-productivity, semi-fudal agriculture.