Indian Economy: Introduction PDF

1 Unit 3 Indian Economy: Introduction Subunit 1 89 The British Raj and Pre-Independent India Economics - Grade 12 ...

1 Unit 3 Indian Economy: Introduction Subunit 1 89 The British Raj and Pre-Independent India Economics - Grade 12  89 The British Raj and 01 Pre-Independent India Introduction In this sub-unit, students will outline the economic history of British colonial India during the British Raj. Students will explore the history of imperialist rule in India, the consequent disruption of the traditional economy; the commercialisation of agriculture; the rise of landlordism and its devastating effects; and starvation and famine in India through accounts of many renowned Indian economists. Students shall also engage with the economic history of British colonial India critically as theorised by Karl Marx. The text aspires to inform students of the importance of economic history to be able to study the state of the Indian economy and its development, in present, and in future. Inquiry questions 1. How was India transformed into an economic colony under British rule? 2. What was the two-fold motive behind the systematic deindustrialisation affected by the British in pre-independent India as evidenced by Marx? 3. How did the commercialisation of agriculture and pressure on land lead to famines and starvation? Were they natural or man-made due to British colonial policies? Economics - Grade 12 90 1.1 Why must we study Economic History? Economic historians study how past economies changed, and the factors that could influence present and future economic development. They focus on practical questions about real economies. For instance, how did the economic relationships between the Western countries and their former colonies evolve historically? How did trade and exchange take place prior to and after their colonisation? How can these relations be used to understand societal and economic changes that are taking place at present? The study of economic history explores all the questions listed above. Economic history, by nature, takes into account the interplay between economic, social, political and cultural behaviour. This has made it possible to question and reassess earlier findings, thus expanding the frontier of our knowledge of the past and its ability to indicate our future. In this sub-unit, we will make use of economic history to paint a picture of the imperialist rule of British India. 1.2 Development and Underdevelopment in Colonial India The British conquest had a profound impact on India. There was hardly any aspect of the Indian economy that was not changed during the entire period of British rule down to 1947 when India achieved its independence. From the end of the eighteenth century, South Asia began to experience two overlapping processes of change that transformed patterns of production and consumption in the region. These were the rise of colonial rule and the integration of the region in the emerging world markets for commodities, capital, and labour. The first process, the transition to colonialism, was underway for almost exactly a century, 1757-1856. During this period, the British East India Company annexed the Indian territories that came to constitute British India. At the turn of 1857, India had become a colony of the British Crown. About 60% of the land area in present India, Pakistan, and Bangladesh belonged to British India (look at the map below). Outside British India, there were more than 500 princely states in South Asia, nominally independent but militarily dependent on the British. Economics - Grade 12  91 Map: British India and the princely states, around 1900 Source: The Economic History of India, 1857-2010, Oxford University Press The second process, integration of the region with the world financial and commercial system, had been active since the eighteenth century, but its impact earlier had been greater in some coastal regions and weaker in the interior. The ratio of foreign trade to domestic product increased from 1-2 per cent in 1800 to a little less than 10% in the 1860s and to 20% by 1914. Although international flows of income, capital, and labour were larger in the colonial period than before, more than half of India’s foreign trade was restricted to Britain while the rest was allowed with a few other countries like China, Ceylon (former Sri Lanka) and Persia (former Iran). The Opening of the Suez Canal in Egypt further intensified British control over India’s foreign trade. Economics - Grade 12 92 The most important characteristic of India’s foreign trade throughout the colonial period was the generation of a large export surplus. But this surplus came at the expense of several essential commodities like food grains, clothes, kerosene etc. — which were scarcely available in the domestic market. Further, this export surplus did not result in any flow of gold or silver into India but was used to make payments for British administration and wars waged by the British. India was crucial to the British Empire as a market for its manufactures, chiefly textiles, machinery, and metals, and as a source of food, migrant labour, industrial raw materials, and natural resources. Colonialism also strengthened the flow of trade and capital by setting up institutions and infrastructure necessary for a market economy, as we study later in the sub-unit. These were big changes. But did they make the average Indian better off? How did the Indian peasant fare? What adverse effects did it have on the traditional village structure of the economy? We will explore all these questions below. 1.3 Economic Performance The conventional indicators of the progress and performance of the Indian economy over the last fifty years or so of colonial rule will be discussed here. The performance of the economy in terms of national product and income levels is much more difficult to assess because the colonial government never made any sincere effort to estimate India’s national and per capita income. Some individual attempts which were made to measure were inconsistent. Among the notable estimators – Dadabhai Naoroji, William Digby, Findlay Shirras, V.K.R.V Rao and R.C. Desai – it was Rao, whose estimates during the colonial period were considered very significant. Various details about the population of British India were first collected through a census in 1881. Though it had limitations, it revealed the unevenness in India’s population growth. Before 1921, India was in the first stage of demographic transition. The second stage of transition began after 1921. However, neither the total population of India nor the rate of population growth at this stage was very high. The various social development indicators were also not quite encouraging. The overall literacy level was less than 16%, and the female literacy rate was at 7%. The overall mortality rate was very high, particularly, infant mortality was about 218 per thousand. We do not have certainty about the history of agricultural output in colonial India, especially the course of yield rates and productivity. The bulk of the Indian population remained employed in agriculture throughout the late nineteenth and early twentieth centuries. At the close of the colonial period in 1947, the extent of development in India was still very limited: average per capita foodgrain availability was about 400 grams, and life expectancy at birth was only 32.5 years. This evidence suggests that there was a distinct but slow-moving process of economic change at work in India in the modern period. It was characterised by minimal improvements in rates of capital and labour productivity resulting in fluctuating and uncertain patterns of growth. The laws, institutions and social structure of contemporary South Asia were thus a creation of Britain’s requirement for cheap labour and cheap exports within the imperial system, and the dominant classes that have exercised control over agricultural and industrial capital for the last hundred years or so and are identified as the product of this colonial transformation. Economics - Grade 12  93 Check Your Progress 1 1. Comment on the social and economic performance of British colonial India. 2. Highlight the features of India’s pre-independence demographic structure. 3. What are the two overlapping processes that changed production and consumption patterns in pre-independent South Asia? 1.4 Village Economy As studied before, in order to understand the underdevelopment under British colonial rule, we need a more comprehensive understanding of imperialism in India told through a lens of economic history. The first to bring this dynamic approach to Indian history was the founder of modern socialism, Karl Marx. A highly influential revolutionary thinker and philosopher, Karl Heinrich Marx was born on 5 May 1818 in Trier in Western Germany, the son of a successful Jewish lawyer. Marx studied law in Bonn and Berlin. His best-known works are the 1848 pamphlet ‘The Communist Manifesto’ (with his lifelong collaborator Friedrich Engels) and the three-volume Das Kapital (1867-1894). He wrote extensively on India in the New York Daily Tribune from 1853 to 1861. Marx’s critique of history, society and political economy holds that human societies develop through class conflict. In the capitalist mode of production, this manifests itself in the conflict between the ruling classes (known as the bourgeoisie) that control the means of production and the working classes (known as the proletariat) that enable these means by selling their labour power in return for wages. Marx’s ideas and theories and their subsequent development, collectively known as Marxism, have exerted enormous influence on modern intellectual, economic and political history. Karl Marx Marx opined that the understanding of the village system is key to the understanding of India. The classic description of the village system is contained in his book ‘Capital’: “Those small and extremely ancient Indian communities, some of which have continued down to this day, are based on possession in common of the land, on the blending of agriculture and handicrafts, and on an alterable division of labour, which serves, whenever a new community is started, as a plan and scheme ready cut and dried. The constitution of these ancient communities varies in different parts of India. In those of the simplest form, Economics - Grade 12 94 the land is tilled in common, and the produce divided among the members. At the same time, spinning and weaving are carried on in each family as subsidiary industries. Side by side with the masses thus occupied with one and the same work, we find the ‘chief inhabitant’, who is judge, police, and tax-gatherer in one; the book-keeper, who keeps the accounts of the tillage and registers everything relating thereto; another official, who prosecutes criminals, protects strangers travelling through and escorts them to the next village; the boundary man, who guards the boundaries against neighbouring communities; the water-overseer, who distributes the water from the common tanks for irrigation; the Bramhin, who conducts religious services; the schoolmaster, who on the sand teaches the children reading and writing; the calendar-Brahmin, or astrologer, who makes known the lucky or unlucky days for seed-time and harvest, and for every other kind of agricultural work; a smith and a carpenter, who make and repair all the agricultural implements; the potter, who makes all the pottery of the village; the barber, the washerman, who washes clothes, the silversmith, here and there the poet, who in some communities replaces the silversmith, in others the schoolmaster. These dozen of individuals are maintained at the expense of the whole community. If the population increases, a new community is founded, on the pattern of the old one, on unoccupied land.” The above described traditional Indian economy was broken from its foundation by the advent of foreign capitalism, represented by British rule. If you recall your history lesson and read carefully, you would understand that the British conquest of the Indian economy differed from the previous foreign conquests in one major way. The previous conquerors had overthrown Indian political powers but had made no basic changes in the country’s economic structure; they had gradually become a part of Indian life, political as well as economic. The peasant, the artisan, and the trader had continued to lead the same type of existence as before. The basic economic pattern, that of the self-sufficient village economy as pointed out by Marx had carried on. Change of rulers had merely meant change in the personnel of those who appropriated the peasant’s surplus. But the British conquerors were different - they disrupted the traditional structure of the economy. Moreover, they never became an integral part of Indian life. They always remained foreigners in the land, exploiting Indian resources and carrying away wealth as tribute. 1.4 History of Imperialist Rule in India Carrying out Marx’s analysis a little further, we can speak of three main periods that stand out in the history of imperialist rule in India. The first is the period of early capitalism, represented by the East India Company, extending to the end of the 18th century. The second is the period of Industrial Capital, which established a new basis of exploitation of India in the nineteenth century. The third is the modern period of Finance-Capital, developing from its first beginning in the closing years of the 19th century to its fuller development in the 20th century. The original aim of the East India Company in its trade with India was the typical ambition of any monopolist company - to make a profit by securing a monopoly trade in the goods and products of an overseas country. The objective was not to look for a market for British manufactures, but the need to secure a supply of the products of India (specially spices, cotton goods, and silk goods), which found a ready market in England and Europe. Economics - Grade 12  95 The problem, however, which faced the Company from the beginning was that, in order to secure these goods from India by way of trade, it had nothing of value to offer, except for precious metals. Therefore in order to increase real wealth, a system of roundabout trade was started, in particular to utilise the plunder from the rest of the colonial system, in Africa and America, to meet the costs in India, where they did not yet have the power to plunder directly. However, as domination began to be established in India, by the middle of the 18th century, methods of power were increasingly used to secure the maximum goods for the minimum payment. But when the administration of the revenues passed into the hands of the East India Company, with the granting of the civil administration of Bengal, Bihar, and Orissa in 1765, a new field of limitless direct plunder was opened up in addition to the profits of “trade”. The objective thus became to draw the wealth out of India without having to send wealth in return. Check Your Progress 2 1. Read the description of the village system as given by Marx in the chapter. Outline how it is different from the present organisation of life and work in your present locality. 2. How did the British rule differ from the earlier conquests? 3. Describe the three main periods of imperialist rule in India as per Marx. 1.5 Capital Accumulation in British India The Industrial Revolution (the Industrial Revolution was the transition from creating goods by hand to using machines) happening in England at the time needed accumulation of capital, which was missing from England. Until the middle 18th century banking capital was still rare. So how did the access to capital accumulation come through in the second half of the 18th century? Marx shows that the primary accumulation of capital of the modern world is driven by the spoils of the colonial system. In this way, the looting of India played an important role in the Industrial Revolution in England. However, once the Industrial Revolution had been established in England, the new task became to find adequate outlets for sending manufactured goods. This led to a revolution in the economic system. The new needs required the creation of a free market in India in place of the previous monopoly. It became necessary to transform India from an exporter of cotton goods to the whole world into an importer of cotton goods. Economics - Grade 12 96 1.6 Fall of Traditional Industries In 1813, the monopoly of the East India Company in trade with India was ended. Prior to 1813 trade with India had been relatively small. But between 1814 and 1835 British cotton manufactures exported to India rose from less than 1 million yards to over 51 million yards. In the same period, Indian cotton piece-goods imported into Britain fell from one and a quarter million pieces to 306,000 pieces, and by 1844 to 63,000 pieces. By 1850 India, which had for centuries exported cotton goods to the whole world, was importing one-fourth of all British cotton exports. But it was not only on the basis of the technical superiority of the machine industry but also due to direct state assistance of only one-way free trade between England and India. This was facilitated by free entry for British goods into India, but tariffs imposed against the entry of Indian manufactures into Britain, and prevention of direct trade between India and European or other foreign countries. This way the dominance of British manufactures was A handloom weaver in colonial India built up in the Indian market and the Indian manufacturing industries were destroyed. While machine-made cotton goods from England ruined the weavers, machine-made twists ruined the spinning industry as well. The same process could be traced in respect of silk goods, woollen goods, iron, pottery, glass and paper. In England, the ruin of the old handloom weavers due to the Industrial Revolution was accompanied by the growth of the new machine industry. But in India, the ruin of the millions of artisans and craftsmen was not accompanied by any alternative growth of new forms of industry. This affected not only the old manufacturing towns like Surat, Dacca, Murshidabad and their population but also the basis of the old village economy - the union of agriculture and domestic industry. The millions of ruined artisans and craftsmen, spinners, weavers, potters, tanners, smelters, smiths from the towns and villages had no alternative but to rush into agriculture. India was forcibly transformed from being a country of combined agriculture and manufactures, into an agricultural colony of British manufacturing capitalism. We can observe that it was from this period of British rule, and from the direct effects of British rule, that originates the deadly over-pressure on agriculture in India that is felt even today. This policy of the industrial capitalists, namely, to make India the agricultural colony of British capitalism, supplying raw materials and buying manufactured goods, was explicitly set out by the President of the Manchester Chamber of Commerce, Thomas Bazley in 1840: “In India there is an immense extent of territory, and the population of it would consume British manufactures to a most enormous extent. The whole question with respect to our Indian trade is whether they can pay us, by the products of their soil, for what we are prepared to send out as manufactures.” The export of raw materials increased, especially after 1833. Raw cotton exports increased from 9 million pounds in 1813 to 32 million in 1833, and 963 million in 1914. Even more significant was the Economics - Grade 12  97 rising export of food grains from starving India. It rose from 858,000 pounds in 1849 to 3.8 million pounds by 1858, and 19.3 million pounds in 1914. Alongside this process, there was a heavy increase in the number and intensity of famines in the second half of the 19th century. In 1880, the Indian Famine Commission Report stated: “At the root of much of the poverty of the people of India, and of the risks to which they are exposed in seasons of scarcity, lies the unfortunate circumstance that agriculture forms almost the sole occupation of the mass of the population and that no remedy for the present evils can be complete which does not include the introduction of a diversity of occupations, through which the surplus population may be drawn from agricultural pursuits and led to find the means of subsistence in manufactures or some such employment.” Parsee cotton merchants of Bombay, circa 1800. India’s living standards fell through the middle of the 19th century as it didn’t do enough to move toward production on a larger scale or with better machines. Source: Universal History Archive/UIG, via Getty Images The ruin of Indian industries, particularly rural artisan industries, proceeded even more rapidly once the railways were built. The railways enabled British manufacturers to reach, and uproot the traditional industries in the remotest villages of the country. The cotton weaving and spinning industries were the worst hit. Silk and woollen textiles fared no better and a similar fate overtook the iron, pottery, glass, paper, metals, spinning, oil-pressing, tanning and dyeing industries. Apart from the influx of foreign goods, some other factors arising out of the British conquest also contributed to the ruin of Indian industries. The oppression practised by the East Indian Company on the craftsmen of Bengal during the second half of the 18th century, forcing them to sell their goods below the market price and to hire their services below the prevailing wages, made a large number of artisans abandon their ancestral professions. Economics - Grade 12 98 The gradual disappearance of Indian rulers and their courts who were the main customers of handicrafts also led to the downfall of these industries. Moreover, Indian rulers and nobles were replaced as the ruling class by British officials and military officers who patronised their own home products. The British policy of exporting raw materials also injured Indian handicrafts by raising the prices of raw materials like cotton and leather. This increased the cost of handicrafts and reduced their capacity to compete with foreign goods. The out-of-work handicraftsmen and artisans failed to find alternative employment. The only choice open to them was to crowd into agriculture. On the one hand, millions of peasants, who had supplemented their income by part-time spinning and weaving, now had to rely heavily on cultivation; on the other, millions of rural artisans lost their traditional livelihood and became agricultural labourers or petty tenants holding tiny plots. They added to the general pressure on land. According to Census reports, between 1901 and 1941 alone the percentage of the population dependent on agriculture increased from 63.7% to 70%. This increasing pressure on agriculture was one of the major causes of the extreme poverty of India under British rule. A fine cotton morning coat produced in India for sale to a wealthy French aristocrat. Before de-industrialization, India produced much of the finest finished textiles in the world. On the whole, industrial progress in India was Source: Cleveland Museum of Art. Public domain exceedingly slow and painful. It was mostly confined to cotton and jute industries and tea plantations in the 19th century and to sugar and cement in the 1930s. Indian industrial development was also extremely lop-sided regionally. Indian industries were only concentrated in a few regions and cities of the country, which led to wide regional disparities in income. Further, the lack of protection for industries in its infancy and outright opposition to Indian industries by the British policy dented industrial capacity. Discover it Yourself Make a list of all handicraft and traditional industries in your hometown. Analyse if the proportion of traditional industries has gone up or down. Elaborate how they differ from the colonial traditional industries of jute, cotton, etc. During the twentieth century, the domination of India by British industrial capital in the nineteenth century gave place to the domination of India by British finance capital. This brought important economic and political consequences. We will explore this in the next section. Economics - Grade 12  99 Check Your Progress 3 1. How did industrial devastation in British colonial India come about? 2. How did the lack of a new machine industry in British colonial India affect the artisans? 3. What do the excerpts given by Thomas Bazley, the President of the Manchester Chamber of Commerce, and the 1880 India Famine Commission Report reveal about the state of industrial progression in British colonial India? 1.7 Transition to Finance-Capital The distinctive forms of nineteenth-century exploitation of India by industrial capital did not exclude the continuing of old forms of direct plunder, which were also carried out forward and at the same time transformed. The “tribute” continued and grew rapidly throughout the nineteenth century alongside the growth of trade. In the twentieth century, it grew even more rapidly alongside a relative decline in trade. The requirements of the nineteenth-century free-trade capitalism led to new developments in British policy in India. First, it was necessary to abolish once and for all the Company and replace it by the direct administration of the British government, representing the British capitalist class as a whole. This was finally completed in 1858. Second, it was necessary to open up India more completely for commercial gain. This required the building of a network of railroads; the development of roads; the introduction of the electric telegraph, and the establishment of a uniform postal system; the first beginning of an anglicised education to secure a supply of clerks and subordinate agents. It was complemented by the introduction of the European banking system and the improvement of irrigation — which had been allowed to fall into complete neglect under British rule. But this process of active development, and especially of railway construction, was to lay the foundations for the development of British capital investments in India. Thus, in terms of imperialist expansion, the “development of infrastructure” would be spoken of as the export of capital. But in the case of India, the amount of actual export of capital was very small. Only over the seven years of 1856-62 in the whole period up to 1914 was the normal excess of exports replaced by an excess of imports, totalling 22.5 million pounds for the seven years, which was not a very large contribution for an ultimate total of capital investments estimated at close on 500 million pounds by 1914. Thus the British capital invested in India was in reality first raised in India from the plunder of the Indian people, and then written down as debt owed by India to Britain, on which India had to pay interest and dividends. Therefore, the focus of British capital investments in India was the public debt. The origin of this debt lay, in the first place, in the costs of war and other charges (often for military operations of British imperialism outside India) debited to India, and later also in the costs of the railway and public works schemes initiated by the Government. Economics - Grade 12 100 The Exploited Tribal Tea Plantation Workers in Assam in 19th century India, Under the British Raj Source:http://www.oldindianphotos.in/2009/07/assamese-women-in-costume-picking-tea.html With the development of railway construction, and development of tea, coffee, and rubber plantations and a few minor enterprises, private capitalist investment from Britain in India began to advance rapidly in the second half of the nineteenth century. In the same period, private British banking began to advance in India after the removal of the restrictions of the Company’s monopoly. For 1909-10, Sir George Paish estimated the total of British capital investments in India and Ceylon (formerly Sri Lanka) at 365 million pounds, but the composition of this clearly reveals that the process of the British capitalist investment in India, or so-called “export of capital”, did not imply a development of modern industry in India. 97% of the British capital invested in India before the First World War of 1914 was devoted towards purposes that facilitated the commercial gains for the British through India. 1.8 Finance-Capital and the World Wars The British nineteenth-century industrial monopoly and domination of the world market began to weaken in the fourth quarter of the nineteenth century. Even in India the decline slowly but steadily developed from the end of the third quarter of the nineteenth century. Economics - Grade 12  101 In the five years 1874-79, the British share of Indian imports was 82%, in addition to 11% for the rest of the empire, leaving less than one-fourteenth of the Indian market for the outside world. By 1884-89, it had fallen to 79%, by 1899-1904 to 66%, by 1904-14 to 63%. At the same time, the profits of invested capital and the volume of home charges were steadily increasing. The total trade between Britain and India in 1913-14 amounted to 117 million pounds, which could be estimated to represent a maximum total of 28 million pounds for British trading, manufacturing and shipping profits from India in 1913. However, the total British capital from investments in India was estimated to have reached 450 million pounds by 1911, and by the eve of the First World War of 1914 to have stood at over 500 million pounds. If the average rate of interest on this is made as low as 5%, this would yield 25 million pounds - to this if the profits and earnings of all that section of the capital representing companies other than trading companies operating in India, as well as the income from financial commissions, exchange transactions, other banking operations and insurance were included – this would give a total of 40 million pounds for the net return. It is therefore evident that by 1914, the interest and profits on invested capital and direct tribute considerably exceeded the total of trading, manufacturing and shipping profits out of India. The finance-capitalist exploitation of India had become the dominant character in the twentieth century. The First World War and the following period accelerated this process, showing a sharp decline in Britain’s share of the Indian market. While the old basis of colonial exploitation was collapsing, the new basis of profits by finance-capitalist exploitation was steadily rising and increasing in volume. By 1929 the total of British capital investment in India was estimated at 573 million pounds and by 1933 at 1000 million pounds. Evidence shows that the exploitation of India in the modern period has been far more intensive than in the old. However, with the First World War, a complete reversal of policy was proclaimed by the Government. Industrialisation was officially set out as the aim in the economic field. The reasons for this proclaimed change of policy arose from the conditions of the war. Three main groups of reasons may be distinguished. First, military strategic reasons. Without the most elementary basis of modern industry in India, there was a lot of dependence for vital military needs on long-distance overseas supplies. The second was competitive economic reasons. Foreign competitors were beginning to break down the British monopoly in the Indian market. A system of tariffs was implemented to prevent this. Third, inner political reasons. To maintain control of India during the war and in the disturbed period succeeding the war, it was essential to secure the cooperation of the Indian bourgeoisie, and for this reason, it was necessary to make certain concessions and promises of concessions. During the twenty years between the First and the Second World Wars, a measure of industrial development undoubtedly took place in India, the most notable of which was the development of the textile industry. However, India could not gain much holding in developing heavy industries like iron, steel, and the production of machinery. The Second World War, and the consequent necessity of developing India as a main supply base in the East, too, brought no basic change in the imperialist attitude to the development of Indian industry. Although a certain measure of increased industrial Economics - Grade 12 102 activity took place in India during the war, whatever increase in production that took place in India during the war arose “from the reckless over-working of existing plant and machinery, and more man- hour shifts.” Thus, India showed the typical inverted economic development of a dependent colonial country. If we compare the proportion of the population in industry and agriculture during this period with the pre-1914 figures, the low level of industrial development becomes apparent. According to the census returns, the numbers dependent on industry actually decreased between 1911 and 1931, while the numbers dependent on agriculture increased. Thus, the real picture of India on the eve of the Second World War was a picture of what has been aptly called “de-industrialisation” in place of the “industrialisation” of India under imperialist rule. The strain on the Indian economy can be seen by putting together the figures of India’s defence expenditure, which rose to increasing heights, in some years to nearly one-third of the total pre- war national income. The foreign banking system working in conjunction with the Government’s financial and exchange policy became an important tool to restrict industrial and independent economic development in India. British colonial Indian Army soldiers, 1944-45. India incurred vast amounts of war expenditure during the First and Second World Wars. Millions of Indian soldiers and volunteers partici- pated in World War 2 on Britain’s side. Source: https://www.ww2online.org/image/british-colonial-indian-army-soldiers-india-1944-45 Economics - Grade 12  103 Although the Second World War brought great impoverishment and suffering to the people of India due to British policies, it enriched the top levels of Indian businessmen, merchants, contractors, and big industrialists. The Indian capitalist class emerged from the war with a huge accumulation of capital, but this was not based on any serious productive economic development or industrial advancement during the war. Hence the demand of the Indian capitalist interests for industrialisation and for new openings for investment reached extreme intensity at the close of the war. Hence, imperialism was adapted to the new era. British vested interests could only be preserved in India through a compromise with the Indian big bourgeoisie. India could be maintained as a safe market for British manufactured goods only with the help of the Indian monopolists. Besides dealing with big and middle businesses in India, British imperialists planned to develop Indian states as their main future base. A number of Indian states came into the field, entering into partnership with British financiers. Hyderabad announced its Godavari Valley Project and 40% to 70% of the capital was offered by the British. The Travancore state, too, sold all rights for the development of its rich thorium sands to a British firm. The rise of plantation industries such as indigo, tea, and coffee was highly exploitative. This oppression was vividly portrayed by the famous Bengali writer Dinbandhu Mitra in his play Neel Darpan in 1860. This whole method of imperialist war finance was based on reckless inflation. Not only was the opportunity to build the Indian economy lost, but as a result of the wartime strain, the economic situation in India during the years following the Second World War was marked by increasingly critical conditions, soaring inflation, rising prices and mass distress. Imperialism worked against the development of Indian industries and also led to extreme poverty among the agricultural population. This poverty limited the market for Indian industries, making it difficult for them to grow and thrive. Thus, the industrial question in India cannot be solved independently from the question of agriculture, which involves the foundations of imperialist exploitation. Check Your Progress 4 1. Why did the British administration transition to a finance-capital form of exploitation in colonial India? 2. What do you understand about the deindustrialisation of British colonial India? What far-reaching effects did it have on the colonial Indian economy? 3. Did British capital investments in British colonial India lead to industrial development? Why or why not? 4. List the reasons why the British government changed the policy regarding the industrialisation of colonial India during World War 1. 5. How did the Second World War facilitate and finance-capital facilitate de-industrialisation? Economics - Grade 12 104 1.9 Land System and Commercialisation of Agriculture (1793 - 1929) The problem of agriculture in India cannot be discussed without dealing with the problems of the land system. The elementary basic issues that were identified underlying the agrarian crisis include the following: The over-pressure of the population on agriculture, through the blocking of other economic channels; The effects of the land monopoly and the burdens on the peasantry; The low technique and obstacles to the development of technique; The stagnation and deterioration of agriculture under the conditions of colonial and semi- colonial economy; The increasing impoverishment of the peasantry, sub-division and fragmentation of holdings; Reduction of a growing proportion of the peasantry, from one-third to one-half in some regions, to the position of a landless proletariat; We will examine each of these points below: The Over-Pressure on Agriculture Often the contrast between the dependence of the majority of the population in India on agriculture and the highly industrialised countries of Western Europe is commonly presented as a kind of natural phenomenon. This is to showcase the backward character of Indian society. Such as this statement in the classic Montague Chelmsford Report of 1918: “In the whole of India, the soil supports 226 million, and 208 million of them get their living directly by, or depend directly upon, the cultivation of their own or others; fields.” The Simon Commission Report of 1930 quoted the above statement and concluded that change must in consequence come “very slowly”. However, the disproportionate and wasteful dependence on agriculture as the only occupation for three-fourths of the people, at the time was a modern phenomenon and the direct consequence of imperialist rule. This is revealed in the official Census returns of the past half-century. The proportion of the population dependent on agriculture rose from 61.1% in 1891 to 66.5% in 1901, 72.2% in 1911, and 73% in 1921. Parallel to this increasing pressure on agriculture, the proportion of the population dependent on industry fell from 5.5% in 1911 to 4.3% in 1931. In 1911 undivided India, with a population of 315 million, there were 17.5 million workers in industry, whereas in 1951 in the Indian Union, with a population of 356 million, the country had only 16.7 million workers in industry. The increase in the demand for food grains by the Britain population and the push to produce cash crops like cotton, jute, wheat, indigo and opium by Indian cultivators to get greater returns led to the commercialisation of agriculture. This reflects the continuing trouble of “deindustrialisation” – that is as we noted earlier, the destruction of the old handicraft industry without compensating for the advance of modern industry, with a continuous increase of the overcrowding of agriculture. The overcrowding of agriculture means that an increasingly heavier demand was constantly put on Economics - Grade 12  105 the backward agriculture in India, to supply a livelihood for an increasingly heavy proportion of a growing population. On the other hand, the effects of land monopoly and the burdens of exploitation placed on the peasantry made the agriculture sector incapable of fulfilling this demand. The increasing over-pressure on agriculture means that the proportion of the available cultivated land to each cultivator was also continually diminishing. In 1911, Sir Thomas Holderness wrote: Not only does the land of India provide food for this great population, but a very considerable portion of it is set apart for growing produce which is exported... Subtracting the land this utilised... we shall find that what is left over does not represent more than 2 ⁄ 3 acre per head of the total Indian population. India therefore feeds, and to some extent clothes, its population from what 2⁄3 acres per head can produce. Stagnation and Deterioration of Agriculture The Indian economist, R. K. Das had estimated in 1930 that 70% of the available area for cultivation was wasted and only 30% was used for productive purposes. There were patches of “cultivable wasteland other than fallow” that were not brought under cultivation because that would have required capital and people had little to spare. The task could have been accomplished by a collective organisation with governmental aid. But this responsibility was never recognised by imperialism. The original neglect of the irrigation and public works by the British Government was noted long ago by Marx: “The British in East India accepted from their predecessors the departments of finance and of war, but they have neglected entirely that of public works. Hence the deterioration of an agriculture...” The overcrowded cultivators of India had to contend with only two-thirds of the cultivable area with paralysing burdens and social conditions, including extreme poverty and primitive techniques. The level of production was also lower than in any country. The over-crowding of agriculture and low technique was also reflected in a colossal waste of labour: in India, there was one person employed in cultivation for every 2.6 acres of land, as against 17.3 acres in the United Kingdom and 5.4 acres in Germany. Overcrowding of agriculture also resulted in fragmentation of land into small holdings most of which could not maintain their cultivators. The lower yield in India was not due to natural disadvantages of lower productivity of the soil as was pointed out by the reports of the Indian Central Banking Enquiry Committee of 1931, “that the soil of India is naturally poor. This is not correct. It has become poor.” The same memorandum points out that allowance had to be made “for part of the land in India producing two crops per year... This advantage should equal any loss from drought... It is not therefore the soil that is responsible for the poverty of rural India.” Check Your Progress 5 Agriculture during Pre-British India The French traveller, Bernier, described seventeenth-century Bengal in the following way: “The knowledge I have acquired of Bengal in two visits inclines me to believe that it is richer than Egypt. It exports, in abundance, cottons and silks, rice, sugar and butter. It produces amply — for its own consumption – wheat, Economics - Grade 12 106 vegetables, grains, fowls, ducks and geese. It has immense herds of pigs and flocks of sheep and goats. Fish of every kind it has in profusion. From Rajmahal to the seas is an endless number of canals, cut in bygone ages from the Ganges by immense labour for navigation and irrigation.” a. This account of the agricultural prosperity in India in the seventeenth century. Contrast it with agricultural deterioration in the 18th and 19th centuries we had read above. Explain in detail all the ways agriculture had stagnated in India during British colonial Land ploughing for rice cultivation in Kerala, 1902 rule. Source: https://picryl.com/media The Land Monopoly and the Burden on the Peasantry In the traditional land system of India before British rule the land belonged to the peasantry, and the Government received a portion of the produce, which under the Hindu kings varied from one-sixth to one-twelfth of the produce and under the Mughal empire was raised to one-third. When the British established their dominion, they took over the traditional land basis of revenue; but transformed its character, and thereby transformed the land system of India. At the time when they took over, the ruling regime was in disorder; the payments from the peasantry were extreme; but the village community system and its traditional relationship to the land were still functioning. Transformation of the Land System As we saw the previous traditional “king’s share” was a proportion of the year’s produce, fluctuating with the year’s production, and surrendered as tribute or tax by the peasant joint owners or self- governing village community to the ruler. This was replaced by fixed money payments, assessed on land, regularly due in cash irrespective of the year’s production. The majority of the settlements were fixed on individual land-holders. The British established the English landlord system. The British state took over the ultimate possession of the land, making the peasantry the equivalent of tenants, who could be ejected for failure of payment. The previous self-governing village community was robbed of its economic functions and administrative role; much of the common lands were assigned to individual holders. From being owners of the soil, the peasants became tenants, and with the further development of the process, an increasing proportion became landless labourers, or the new class of agricultural proletariat, constituting over one-third of the agricultural population. Creation of Landlordism The introduction of the English landed system in a modified form was the first type of land settlement attempted by the western conquerors. This was the character of the famous Permanent Economics - Grade 12  107 Land Settlement of Lord Cornwallis in 1793 for Bengal, Bihar, Orissa, and later extended to parts of North Madras. The existing Zamindars, who were in reality tax farmers, or officials appointed by the previous rulers to collect land revenue on commission, were constituted as landlords permanently, subject to a permanent fixed payment to the Government. At the time these terms of settlement were disadvantageous for the Zamindars and cultivators, and very profitable for the Government. The figure was set at 3 million pounds to be raised by the Zamindars in Bengal for the Government. Many of the old traditional Zamindar families broke down due to the heavy burden and estates were either sold or put to auction. These estates were bought by a class of businessmen. Later, with the fall in the value of money and the increase in the amount collected from the peasantry, the Government’s share in the profits, which was permanently fixed at 3 million pounds, became relatively smaller; while the Zamindars’ share became larger. For this reason, the Permanent Settlement in Bengal began to be universally condemned by not only the peasantry but also by the imperialists. The subsequent Zamindari settlements were made “temporary” — that is, subject to periodical revision to permit successive raising of the Government’s demand. In the period after the Permanent Settlement, an alternative method called the Ryotwari system was attempted in a number of other districts, beginning in Madras, and associated with the name of Sir Thomas Munro, who, as the Governor of Madras, put it into force in 1820. The idea was to avoid both the disadvantages of the Permanent and Temporary Settlements by making a direct settlement of the Government with the cultivators. Thereby the Government secured for itself the entire profits without needing to share them with intermediaries. Thus the forms of land tenure in British India became traditionally classified under these three main groupings, all deriving from the British Government. First, the Permanent Zamindari Settlements, which covered 19% of the total area of British India. Second, the Temporary Zamindari Settlements which covered 30% of the area. Third, the Ryotwari Settlements which covered 51% of the area. The three systems of land revenue were supplemented by the Mahalwari system. In the Mahalwari system, if the Zamindar held the whole estate, the settlement was with the Zamindar; otherwise, payment was extracted from individual cultivators. It is important to not conclude that landlordism existed only in 49% of the area of British India. In practice, through the process of sub-letting, and through the dispossession of the original cultivators by Grain cart drawn by hired labourers, Madras (1876-1878), Tamil money-lenders and others securing possession Nadu, South India. Changes in land ownership and control affect- of their land, landlordism spread extensively at ed how crop failures impacted human lives. Before the British colonial period, Indian agriculture was dominated by subsistence an increasing rate in the Ryotwari areas. Due to farming organised in small village communities. At the end of the a lack of other effective outlets for investments, 18th century, village communities began to disband. The perma- nent land settlement of Lord Cornwallis in 1793 impacted Bengal, the moneyed classes excessively preyed on the Bihar, and Orissa, and later extended to North Madras. peasants. Source: https://www.environmentandsociety.org Economics - Grade 12 108 In both the Permanently and the Temporarily settled Zamindari areas, the lot of the peasants were left to the mercy of the Zamindars who raised rents to high limits, forced them to pay illegal dues and to perform forced labour or begar. Even though the land revenue demand went on increasing year after year – it increased from Rs. 15.3 crores in 1857-58 to Rs. 35.8 crores in 1936-37 — the proportion of the total produce taken as land revenue tended to decline as the prices rose and production increased. By now the population pressure on agriculture had increased to such an extent that the lesser revenue demand of later years weighed on the peasants as heavily as the higher revenue demand of the earlier years of the Company’s administration. The demand for high revenue was made worse by the fact that the peasants got little economic return for it. The government spent very little on improving agriculture. Almost its entire income was spent on meeting the needs of the British-Indian administration, making the payments of direct and indirect tribute to England. Even the maintenance of law and order tended to benefit the merchant and the money-lender rather than the peasant. This was increased by the rigid collection structure of land revenue. Land revenue had to be paid promptly on the fixed dates even if the harvest had been below normal or had failed completely. But in bad years, the peasant found it difficult to meet the revenue demand even if he had been able to do so in good years. The Burden of Debt The burden of debt grew increasingly with British rule and had become a major problem. The causes of indebtedness of the Indian peasantry were economically incurred for payment of rent, capital improvement, repayment of old debts and other purposes – closely linked with exploitation. The ‘moneylender’ and ‘debt’ were not new phenomena in Indian society. However, the role of the moneylender had taken on new proportions under capitalist exploitation, especially in the period of imperialism. The peasant cultivator, if he had not fallen into the ranks of the landless proletariat, was brought under a triple burden. The government imposed heavy taxes and revenue demands on the peasants, taking away their resources and leaving them impoverished. The Zamindars often acted as exploitative landlords, taking excessive rent from the peasants and subjecting them to unreasonable evictions. Moneylenders charged high interest rates, trapping them in cycles of debt and furthering their economic vulnerability. The growing commercialisation of agriculture also helped the moneylenders and merchants to exploit the cultivator. The loss of land and the over-crowding of land forced the landless peasants, and ruined artisans and handicraftsmen, to become either tenants of the money-lenders and zamindars by paying high rent or become agricultural labourers at starvation wages. Gold ornaments, the traditional form of savings, were drained from the peasantry to stave off bankruptcy. Between 1931 and 1937 no less than 241 million pounds of gold was drained from India. The number of abandonments by tenants who could not pay rent went on reaching high figures. By 1934-35 the agricultural returns revealed an absolute drop in the area of cultivated land by over 5 million acres. The drop in the area under food grains was 5,589,000 acres. The burden of agricultural debt tripled: from 400 million pounds in 1921 to 1350 million pounds in 1937. Economics - Grade 12  109 The money lender was also greatly helped by the new legal system and the new revenue policy. By introducing transferability of land the British revenue system enables the money-lender or the rich peasant to take possession of land. Even the benefits of peace and security established by the British through their legal system and police were primarily reaped by the money-lender in whose hands the law placed enormous power. Gradually the cultivators in the Ryotwari areas sank deeper into debt and more and more land was passed into the hands of moneylenders, merchants, rich peasants and other moneyed classes. The process of transfer of land from cultivators was intensified during periods of scarcity and famines. Discover it Yourself Identify the major crops grown by farmers in your hometown in present times. Find out the different avenues in which farmers obtain loans for production and cultivation. Contrast them with the methods of revenue collection and loans administered in British India. How has the situation improved? Check Your Progress 6 1. What were the main causes of India’s agricultural stagnation during the British colonial period? 2. Identify the basic issues of the agrarian crisis in British India. 3. What do you understand about the commercialisation of agriculture? How did it adversely impact the agrarian situation in British India? 4. Outline the creation of landlordism in British India. Differentiate between Permanent and Temporary land settlement, Ryotwari and Mahalwari systems of settlement. 5. Describe how the peasant cultivator had to bear a triple burden in the land settlement system of British India. 1.10 Famine and Starvation in Colonial India A major characteristic of British rule in India, and the net result of British economic policies was the prevalence of extreme poverty among people. Throughout British rule, Indians always lived on the verge of starvation. It was difficult to secure employment or a living. As we saw, British economic exploitation, the decay of indigenous industries, the failure of modern industries to replace the once- gone handicraft industries, high taxation, the drain of wealth to Britain, and a backward agrarian structure gradually reduced the Indian population to extreme poverty. The poverty of the people found its culmination in a series of famines (much of it being the direct consequence of British colonial policies) which affected all parts of India in the second half of the 19th century. The first of these famines occurred in Western Uttar Pradesh in 1860-61 and cost over Economics - Grade 12 110 2,00,000 lives. In 1865-66, a famine engulfed Orissa, Bengal, Bihar, and Madras and took a toll of nearly 2,000,000 lives, with Orissa alone losing 10,00,000 people. More than 14,000,000 persons died in the famine of 1858-70 in Western Uttar Pradesh, Bombay, and Punjab. Many states in Rajputana, another affected area, lost 1/4th to 1/3rd of their population. 1876-1879 famine in Madras Digby estimated 10.3 million people starved to death most of which were in South India (some refer to the tragedy as the Madras famine). Maharatna estimated 8.2 million died from hunger and diseases that followed. British colonial rule argued that famine relief would be an inappropriate response and encourage laziness. Some officials argued the Thomas R Malthus theory that famines are nature’s way for population control and argued the British government should not intervene. The British government continued its policy of “forced export” of food from India in 1876-1879, while the famine swept among its people. Source: https://commons.wikimedia.org Perhaps the worst famine in Indian history till then occurred in 1876-78 in Madras, Mysore, Hyderabad, Maharashtra, Western Uttar Pradesh and Punjab. Maharashtra lost 8,00,000 people, Madras nearly 35,00,000, Mysore nearly 20% of its population, and U.P. over 12,00,000. Drought led to a country-wide famine in 1895-97 and then again in 1899-1900. The famine of 1896-97 affected over 9.5 crore people of whom nearly 45,00,000 died. The famine of 1899-1900 followed quickly and caused widespread distress. In spite of official efforts to save lives from these major famines, many other local famines and scarcities occurred. William Digby, a British writer, has calculated that in all, over 28,825,000 people died during famines from 1854 to 1901. 1.10.1 The Great Bengal Famine of 1943 The Bengal famine of 1943 was one of the worst disasters in twentieth-century South Asia. According to a survey conducted by Professor K.P. Chattopadhyaya, 3 ½ million people had died. Epidemics followed in the wake of famine, and by September 1944, 1,200,000 people in Bengal had died of various diseases including cholera, smallpox, and malaria. Economics - Grade 12  111 The context of the famine is dated to March 1942, when the Japanese army had completed the occupation of Burma (now Myanmar). During this time, there was a serious shortage in rice production as India used to have 15% of its rice imports from Burma. The loss of Burmese imports resulted in the takeover of rice reserves in areas vulnerable to the Japanese invasion within India, which resulted in large-scale hoarding. Bengal was also lacking wheat, dried legumes, mustard, sugar, and salt. Due to hoarding and rationing of foodgrains, the price of rice in Calcutta which was Rs. 6 per maund in January 1942 rose to Rs. 11 in November 1942, Rs. 24 in February-April, 1943, Rs. 30 in May, Rs. 35 in July, Rs. 38 in August, Rs 40 in October 1943. The price rose to as high as Rs. 50 to Rs. 100 per maund in the Mofussil districts. Alarmed by Japan’s military successes, the British colonial authorities started preparing for a Japanese invasion of eastern and coastal Bengal. This included two important measures: the removal of rice in excess from coastal districts, and the removal of boats that could carry ten or more passengers to deny supplies and transport to the Japanese. Moreover, due to the fear of the Japanese invasion, the government of Bengal impounded 66,653 boats, thereby halting all rice movement from surplus zones to the deficit districts of East Bengal. In these districts of Khulna, Midnapore, and Bakarganj, the economy of the fishing class was also completely destroyed. People who were engaged in pottery in different districts went out of trade and their families became homeless, as this industry required large inland shipments of clay. The main causes of the famine in 1943 accepted by many researchers after many debates are: An absolute shortage of rice, due to the loss of imports from Burma, and rice exports from Bengal to Sri Lanka (since it was one of the strategic bases against Japan) and to those regions of the British empire that could not get rice from Southeast Asia after the fall of Burma; The conditions and consequences of World War II, creating a drastic increase in the price of rice; The incompetence of the government of Bengal to control the supply and distribution of food grains in the market, thus generating large-scale hoarding; Delayed response after the onset of famine by the British administration; The government’s slow response in putting into operation a nationwide system of moving supplies from food surplus to deficit areas. Amartya Sen, a renowned Indian economist noted that one important characteristic of the famine was it created an uneven expansion of incomes and purchasing power. People who were involved in the army, the military and civil defence works, or industries associated with war activities were covered by distribution arrangements and subsidised good prices. As a result, they could access abundant supplies of food while others faced the consequences of rising food prices. Calcutta witnessed the famine in the form of destitute masses from the rural areas who travelled there from the surrounding rural districts. People thought if they could move to Calcutta, they had a better chance of survival than anywhere else in Bengal because the city had so many people engaged in war-related activities. Below is a picture of a family who moved to Calcutta to obtain food. The famine swept across at least 60% of Bengal’s net cultivable area, affecting more than 58% of the rural households and reducing over 486,000 rural families to a state of beggary. In the famine period, the worst affected groups seem to have been fishermen, transport workers, paddy huskers, agricultural labourers, those in ‘other productive occupations’, craftsmen, and non- Economics - Grade 12 112 agricultural labourers, in that order. Reports made by the Famine Commission in 1880, 1898, and 1901 provide useful evidence to examine these events and suggest that food grains were present even during years of famine. The Famine Commission of 1880 provided the first attempt to measure the food supply in the country and the food requirements of the people. According to these measures, British India around 1880 produced a surplus of 5 million tons of food grains that were available for storage, export, or luxury consumption. Further, each region of India grew surplus food grains. The Famine Commission of 1898 again made fresh estimates of food supply near 1880 and considered the growth of population and acreage under food grains during the period 1880-98. The report concluded that “the surplus produce of India, taken as a whole, still furnishes ample means of meeting the demands of any of the country likely to suffer from famine at any one time, supposing such famines to be not greater in extent and duration than any hitherto experienced.”. The measures of surplus production given by the Famine Commission of 1880 show that food grain exports did not actually wipe out the surplus in normal years. A family arrived in Calcutta in search of food in November 1943. Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9735018/figure/Fig2/ Moreover, food grain exports continued throughout the years of severe famine. Many observers have thus concluded that if there was an absolute shortage of food in those years, then this was largely a created shortage and cannot be attributed to natural disasters. We note that there were many other indications of India’s economic backwardness and impoverishment. Colin Clark, a famous authority on national income, has calculated that during the period 1925-34, India and China had the lowest per capita incomes in the world. But India’s economic backwardness and poverty to a large extent were not natural, but rather man-made. The natural resources of India were abundant and capable of yielding if properly utilised, a high degree of prosperity to the people. But, as a result of foreign rule and exploitation, a backward agrarian and industrial economic structure, and the total outcome of its lack of social development, India presented the paradox of poor people living in a rich country. Economics - Grade 12  113 Check Your Progress 7 1. There is a perception still going around that in many ways the British administration in India was quite beneficial. This perception needs an informed debate. How would you look at this perception – especially after studying our current sub-unit? Write out your arguments in 300 words. 2. What was one important characteristic of the Great Bengal Famine in 1943 as per the renowned Indian economist, Amartya Sen? 3. Between 1850 and 1899, India suffered 24 major famines, a number higher than in any other recorded 50-year period, resulting in millions of deaths. Elaborate how the following changes in the Indian economy might have contributed to the frequent famines in British colonial India. a. Commercialisation of agriculture b. Rise of landlordism c. Collapse of traditional industries 1.11 Conclusion As evidenced by the subunit, the British conquest had a profound economic impact on India. Here we will broadly summarise the important points covered throughout the sub-unit: An understanding of the economy before independence is necessary to understand and appreciate the level of development achieved during the post-independence period. South Asia from the end of the 18th century witnessed two overlapping processes of change that transformed its patterns of production and consumption. The first was the rise of colonial rule and the second was the integration of the region in the emerging markets for commodities, capital, and labour in order to generate a large export surplus for the British colonial system. British colonial rule differed from previous ruling classes in its economic structure. It did not assimilate into Indian political or economic life but built around it and drained colonial India of its resources. The village structure of pre-colonial India was broken down by the British as stated by Marx. He identified three main periods that stand out in the history of imperialist rule in India: first is the period of early capitalism, represented by the East India Company and extending to the end of the 18th century; the second period is of Industrial Capital, which established a new basis of exploitation of India in the nineteenth century; and the third is the modern period of Finance- Capital, developing from its first beginning in the closing years of the 19th century to its fuller development in the 20th century. The Industrial Revolution of England was facilitated by the spoils of the colonial system. The Industrial Revolution necessitated the establishment of India as an outlet for sending manufactured goods from Britain. The dominance of British manufacturers destroyed the Economics - Grade 12 114 traditional industries such as handicrafts, silk, woollen, iron, pottery, glass, and paper in India. The lack of a modern machine industry in India further worsened the situation of Indian exports. The British colonial rule transitioned to finance capital to facilitate British capital investments in India, most of which took the form of public debt. The debt was accrued due to costs of war and other charges. The “export of capital” did not imply the development of modern industry in India but the facilitation of commercial gains to the British. During the Second World War, India witnessed some industrialisation for three main reasons: military and strategic reasons, competitive economic reasons, and inner political reasons. Imperialism worked against the development of Indian industries and also led to extreme poverty among the agricultural population. The Second World War enriched the top levels of Indian businessmen, merchants, contractors, and big industrialists. However, Indian industrial progress was slow and painful. It was confined to mostly cotton, jute industries, and exploitative plantations. The ruin of the handicraft industry forced workers to crowd agriculture for employment which led to over-pressure and deterioration of agricultural land. The peasantry was crushed under the triple burden of government taxes, Zamindars’s exploitative practices, and money lenders’ high interest rates. The commercialisation of agriculture was necessitated by the British by pushing Indian cultivators to produce cash crops like cotton, wheat, indigo, and jute. The exploitative landlordism further pushed Indian cultivators into poverty. The Permanent and Temporary Zamindari settlement, Ryotwari, and Mahalwari settlements pushed the cultivators into growing debt. The net result of British colonial policies and settlements such as these was the prevalence of extreme poverty which resulted in a series of famines. The worst of the famines was the Great Bengal Famine of 1943 which claimed over 3 million lives. A Glossary Imperialism: a situation in which one country has a lot of power or influence over others, especially in political and economic matters Colonialism: Colonialism is the pursuing, establishing and maintaining of control and exploitation of people and of resources by a foreign group of people. Bourgeoisie: The ruling class of the two basic classes of capitalist society, consisting of capitalists, manufacturers, bankers, and other employers Proletariat: The class of wage earners, esp. those who earn their living by manual labour or who are dependent for support on daily or casual employment Land Fragmentation: Land fragmentation is a state of division of holdings into discrete parcels that are dispersed over a wide area. Maund: The maund, mun or mann is the anglicised name for a traditional unit of mass used in British India. Economics - Grade 12  115 Mofussil districts: Originally, the regions of India outside the three East India Company capitals of Bombay, Calcutta and Madras; the provincial or rural districts of India. References: 1. Famines in Late Nineteenth-Century India: Politics, Culture, and Environmental Justice. (2021, June 10). Environment & Society Portal. 2. Dutt, R. P. (1940, January 1). India To-day. 3. Roy, T. (2020, September 10). The Economic History of India, 1857–2010. Oxford University Press. 4. Sen, A. (1983, January 20). Poverty and Famines. OUP Oxford. 5. NCERT - INDIAN ECONOMY. Kalinjar Publications. 6. Chandra, B. (2020, January 1). History of Modern India. 7. Famines in India Timeline. (n.d.). Environment & Society Portal. https://www.environmentandsociety.org/exhibitions/famines-india/ timeline/famines-india-timeline Economics - Grade 12