3.

ECONOMY AND SOCIETY

British Economic Policies in India:

Commercial policy: From 1600 to 1757 the East India Company role in
India was that of a trading corporation which brought goods or precious
metals into India and exchanged them for Indian goods like textiles and
spices, which it sold abroad. Naturally, it tried constantly to open new
markets for Indian goods in Britan and other countries. Thereby, it
increased the export of Indian manufacturers and thus encouraged their
production. This is the reason why India rulers tolerated and even
encouraged the establishment of the company’s factories in India. The
British manufacturers put pressure on their government to restrict and
prohibit the sale of Indian goods in England. By 1720, laws had been
passed forbidding the wears or use of printed or dyed cotton cloth.

After the battle of plassey in 1757, the patterns of the company‟s

commercial relations with India underwent a qualitative changes. Now the
company could use its political control over Bengal to acquire
monopolistic control over trade and production and push its Indian trade.
The industrial revolution in Britain completely transformed Britain’s
economy and its economic relations with India. During the second half of
the eighteenth century and the first few decades of the nineteenth
century, Britain underwent profound social and economic transformation,
and British industry developed and expanded rapidly on the basis of
modern machines, the factory system, and capitalism.

Between 1793 and 1813, the Brtish Manufacturers launched a powerful

campaign against the company and its commercial privileges and finally
succeeded in 1813 in abolishing its monopoly of Indian trade. With this
events, a new phase in Britain‟s economic relations with India began.
Agricultural India was to be made an economic colony of industrial
England. The government of India now followed a policy of free trade or
unrestricted entry of British goods. Indian handicraft were exposed to the
fierce and unequal competition of the machine-made products of British
and faced extinction. Indian hand-made goods were unable to complete
against the much cheaper products of British mills which had been rapidly
improving their productive capacity by using inventions and a wider use of
steam power. Instead of exporting manufacturers India was now forced to
export raw materials like raw cotton and raw silk which British industries
needed urgently , or plantation products like indigo and tea or food grains
which were in short supply in Britain. Thus , the commercial policy of the
east India company after 1813 was guided by the needs of British
industry. Its main aim was to transform India into a consumer of British
manufacturers and a supplier of raw materials.

LAND REVENUE POLICY

Land revenue was one of the major sources of income for Britishers in
India. There were broadly three types of land revenue policies in existence
during the British rule in India. Before independence, there were three
major types of land tenure systems prevailing in the country: The
Zamindari System, The Mahalwari System, The Ryotwari System. The
basic difference in these systems was regarding the mode of payment of
land revenue.

The acquisition of the Diwani in 1765 brought the company face to face
with the real problem of revenue assessment and collection. Under the old
system, land revenue was the responsibility of zamindars and other
intermediaries like Amils and whose transactions were supported by an
extended credit structure.

In 1765, the east India company acquired the Diwani , or control over the
revenues, of Bengal , Bihar and Orissa. In 1773, it decided to manage the
land revenues directly. Warren Hastings auctioned the right to collect
revenue to the highest bidders. But this experiment did not succeed.

The Zamindari System

Introduced as per Permanent Settlement Act. The permanent settlement

was introduced in Bengal and Bihar in 1793 by lord Cornwallis. It had two
special features. First, the zamindars and revenue collectors were
converted into so many land lords. They were not only to act as agents of
the government in collecting land revenue from the Ryot but also to
become the owners of the entire land in their zamindaris. Their right of
ownership was made hereditary and transferable. Second , the zamindars
were to give 10/11th of the rental they derived from the peasantry to the
state, keeping only 1/11th for themselves.

The social foundation of new settlement was largely the old aristocracy of
Bengal. The peasantry was completely excluded from the new settlement
and in almost all cases bore the brunt of the settlement. their customary
rights were reduced to being tenants. The enhanced level of revenue
demand was borne by them with disastrous consequences. Subsequent
regulations proved even more damaging as these gave zamindars the
right to appropriate the property of tenants in cases of non fulfillment of
rent obligations. Admittedly the richer strata of the peasantry was able to
control influence and landed power at the village level, at least in some
districts of Bengal , but this was by no means a pervasive phenomenon.
The most immediate effects of the settlement was the assurance of
permanent land revenue. In the long run, this was not especially profitable
as the share of the government in the total agricultural revenue tended to
diminish.

The permanent zamindari settlement was later extended to Orissa, the

northern districts of madras, and the district of Varanasi.

THE RYOTWARI SETTLEMENT

The establishment of British rule In south and southwestern India brought

new problems of land settlement. The officials believed that in these
regions they were no zamindars with large estate with whom settlement
of land revenue could be made and that the introduction of zamindari
system could upset the existing state of affairs. Many madras officials led
by reed and Munro recommended that settlement should, therefore, be
made directly with the actual cultivators under the system they proposed,
which is known as the Ryotwari settlement, the cultivators was to be
recognized as the owner of his plot of land subjects to the payment of
land revenue. The Ryotwari settlement was in the end introduced in parts
of the madras and Bombay presidencies in the beginning of the
nineteenth century. The settlement under the Ryotwari system was not
made permanent. The supporters of the Ryotwari system claimed that it
was a continuation of the state of affairsthat had existed in the past.
Munro said: “it is the system which has always prevailed in India”. The
Ryotwari settlement was in the end introduced in parts of the madras and
Bombay presidencies in the beginning of the nineteenth century. The
settlement under the Ryotwari system was not made permanent. It was
revised periodically after 20-30 years when the revenue demand was
usually raised.

In the British territories in southern India, there was a move

away from the idea of Permanent Settlement. A system that came
to be known as the Ryotwari System, was devised by Captain
Alexander Read and Sir Thomas Munro at the end of the 18
century and introduced by the latter when he was governor of
Madras Presidency (1819– 26). Under the Ryotwari system, the
land revenue was paid by the farmers directly to the state. In this
system, the Individual cultivator called Ryot had full rights
regarding sale, transfer, and leasing of the land. The ryots could
not be evicted from their land as long as they paid the rent. It
was prevalent in most of southern India, first introduced in Tamil
Nadu. It was later extended to Maharashtra, Berar, East Punjab,
Coorg and Assam. The advantages of this system were the
elimination of middlemen, who often oppressed villagers.

The Ryotwari settlement did not bring into existence a system of peasant
ownership. The peasant soon discovered that the large number of
zamindars had been replaced by one giant zamindars- the state-and that
they were mere government tenants whose land was sold if failed to
punctually pay land revenue. The Ryot‟s rights of ownership of his land
were also negated by three other factors. (1) in most areas the land
revenue fixed was exorbitant; the Ryot was hardly left with bare
maintenance even in the best of seasons. For instance, in madras, the
government claim was fixed as high as 45 to 55 percent of gross
production in the settlement. The situation was nearly as bad in Bombay.
(2) the government retained the right to enhance land revenue at will.(3)
the Ryot had to pay revenue even when his produce was partially or
wholly destroyed by drought or floods.

This system gave much power to subordinate revenue officials,

whose activities were inadequately supervised. The system was
dominated by the mahajans and moneylenders who granted loans
to cultivators by mortgaging their land. The moneylenders
exploited the cultivators and evicted them from their land in case
of loan default.

THE MAHALWARI SYSTEM

A modified version of the zamindari settlement , introduced in the Ganga

valley, the north –west provinces, parts of central india, and the Punjab,
was known as the Mahalwari system. The revenue settlement was to be
made village by village or estate ( mahal) by estate with landlords or
heads of families who collectively claimed to be the landlords of the
village or the estate. In the Punjab a modified Mahalwari system known as
the village system was introduced. In Mahalwari areas also , the land
revenue was periodically revised.

By the early 19 century, the Company officials were convinced

that the system of revenue had to be changed again. The
revenues cannot be fixed permanently at such a time when the
Company needed more money to meet its expenses of
administration and trade. In 1822, Englishman Holt Mackenzie
devised a new system known as the Mahalwari System in the
North Western Provinces of the Bengal Presidency (most of this
area is now in Uttar Pradesh). Under the Mahalwari system, the
land revenue was collected from the farmers by the village
headmen on behalf of the whole village (and not the zamindar).
The entire village was converted into one bigger unit called
‘Mahal’ and was treated as one unit for the payment of land
revenue. The revenue under the Mahalwari system was to be
revised periodically and not fixed permanently. The system was
popularised by Lord William Bentick in Agra and Awadh and was
later extended to Madhya Pradesh and Punjab.

A major drawback of the system was that the survey was

practically based on faulty assumptions which left a space for
manipulations and corruption. At times, it made the Company
spend more for the collection than the revenue collected.
Consequently, the system was regarded as a failure.

Both the zamindari and the ryotwari systems departed fundamentally

from the traditional land systems of the country. The british created a new
form of private property in land in such a way that the benefit of the
innovation did not go to the cultivators. All over the country, land was now
made saleable, mortgageable, and alienable. This was done primarily to
protect the government‟s revenue . if land had not been made
transferable or saleable the government would find it very difficult to
realize revenue from a cultivator who had no savings or possessions out of
which to pay it. Now he could borrow money on the security of this land
and or even sell part of it and pay his land revenue . if he refused to do so;
the government could and often did auction his land realize the amount.
Another reason for introducing private ownership of land was provided by
the belief that only right of ownership would make the landlord or the
Ryot exert himself in making improvements. The British by making land a
commodity which could be freely bought and sold introduced a
fundamentals change in the existing land systems of the country. The
stability and the continuity of the Indian villages were shaken. In fact, the
entire structure of rural society began to break up.

THE ECONOMIC IMPACT OF BRITISH RULE

The British conquest had a pronounced and profound economic impact on

India. There was hardly any aspect of the Indian economy that was not
changed for better or for worse during the entire period of British rule
down to 1947.

(i) Disruption of the traditional economy:

British conquerors totally disrupted the traditional structure of the Indian
economy. They always remained foreigners in the land, exploiting Indian
resources and carrying away India’s wealth as tribute.

the economic policies followed by the British led to the rapid

transformation of India’s economy into a colonial economy whose nature
and structure were determined by the needs of the British conquest of
India differed from all previous foreign conquests. The basic economic
pattern, that of the self- sufficient rural economy, had been perpetuated.

(ii) Ruin of artisans and craftsmen:

The British imposed a policy of one- way free trade on India after 1813
and the invasion of British manufactures, in particular cotton textiles,
immediately followed. Indian goods made with primitive techniques could
not complete with goods produced on a mass scale by powerful steam-
operated machines. The ruin of Indian industries, particularly rural artisan
industries, proceeded even more rapidly once the railways were built. The
railway enabled British manufactures 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 woolen textiles fared no
better and a similar fate over took the iron, pottery, glass, paper, metals,
guns, shipping, oil pressing, tanning and dyeing industries.

Apart from the influx of foreign goods, some other factors arising from
British conquest also contributed to the ruin of Indian industries. The
oppression practiced by the east India company and its servants on the
craftsmen of Bengal during the second half of the eighteenth century,
forcing them to sell their goods below the market price and to hire their
services below the prevailing wage, compelled a large number of them to
abandon their ancestral professions.

The decay of the Indian trade and industry was more or less complete by
the middle of the nineteenth century. The cause of the decay may be
summarized as (i) policy of the British parliament. (ii) competition of
cheaper machine –made goods, (iii) lack of intention of the English
government in India to protect or encourage Indian arts and crafts, (iv)
oppression of the Indian manufacturers, particularly the weavers by the
company’s servants.

(iii) Impoverishment of the peasantry:

The peasant was also progressively impoverished under British rule.

Although he was now free from internal wars, his material condition
deteriorated and he steadily sank into poverty. The condition of the
cultivators in the Ryotwari and Mahalwari areas was no better. Here the
government took the place of the zamindars and levied excessive land
revenue which was in the beginning fixed as high as one-third to onehalf
of the produce. Heavy assessment of land was one of the main cause of
the growth of poverty and the deterioration of agriculture in the
nineteenth century. The process of transfer of land from cultivators was
intensified during periods of scarcity and famines. The Indian peasant
hardly had any savings for critical times and whenever crops failed the fell
back upon the moneylender not only to pay land revenue but also to feed
himself and his family. By the end of the nineteenth century, the money
lender had become a major curse of the country side and an important
cause of the growing poverty of the rural people. The pressure of taxation
and growing poverty pushed the cultivators into debt, which in turn
increased their poverty. The growing commercialization of the agriculture
also helped the money lender-cum-merchant to exploit the cultivator. The
poor peasant was forced to sell his produce just after the harvest and at
whatever price he could get as he had to meet in time the demands of the
government , the land lord and the money lender. This placed him at the
mercy of the grain merchant, who was in a position to dictate terms and
who purchased his produce at much less than the market price. Thus a
large share of the benefit of the growing trade in agricultural products was
reaped by the merchant, who was very often also the village money
lender. The loss and overcrowding of land caused by deindustrialization
and lack of modern industry compelled the landless peasants and ruined
artisans and handicraftsmen to become other either tenants of the money
lenders and zamindars by paying rack-rent or agricultural labourers at
starvation wages. Thus the peasantry was crushed under the triple burden
of the government, the zamindar or landlord and the money lender. After
these three had taken their share not much was left for the cultivator and
his family to subsist on. It has been calculated that in 1950-51 land rent
and money lender‟s interest amounted to Rs. 1400 crore or roughly equal
to one-third of the total agricultural produce for the year. The result was
that the impoverishment of the peasantry continued along with an
increase in the incidence of famines. People died in millions whenever
droughts or floods caused failure of crops and scarcity.

(iv) Stagnation and deterioration of agriculture:

As a result of overcrowding in agriculture, excessive land revenue

demand, growth of landlordism, increasing indebtedness and the growing
impoverishment of cultivators, Indian agriculture began to stagnate and
even deteriorate resulting in extremely low yields per acre.
The government could have helped in improving and modernizing
agriculture. But the government refused to recognize any such
responsibility. A characteristic of the financial system of British India was
that, while the main Burdon of taxation fell on shoulders of the peasant,
the government spent only a small part of it on him. According to Bipan
Chandra, at a time when agriculture all over the world was being
modernized and revolutionized, Indian agriculture was technologically
stagnating; hardly any modern machinery was used.

The overall impact upon the agrarian society of different parts of India
was greater impoverishment due to high assessment, lack of opportunity
to accumulation of wealth and stifling of initiative for any improvement of
agriculture. Agriculture remained backward , the cultivators became
poorer, landless laborers increased with the progress of time , absentee
land lordism drained out whatever wealth was produced in rural areas into
towns, leaving the agricultural society bogged in a miserable existence.

(v) Poverty and Famines

The entire period of British rule in India was marked by recurrent famines
and epidemics. The impact was exceptionally intense on the masses of
population already famished and enfeebled by undernourishment and
malnourishment. Famines were not unknown in pre- British India but their
nature had undergone considerable change. Famines had become a
recurrent phenomena during the colonial rule and their frequency seems
to have I creased. The increasing frequency and intensity of famines in
India under colonial rule attracted the attention of many eminent
contemporaries. Historically speaking , the nature and pattern of famines
was same everywhere and their essential features were more or less
similar. The famines were often local phenomena confined to small
geographical boundaries. The beginning of industrial revolution and
emergence of capitalism required primitive accumulation of capital which
was made possible by colonial plunder, drain of wealth , slave trade and
monopoly profit in international trade. The process of accumulation of
wealth in the modern west was dependent upon impoverishment,
destitution, devastation, and decimation of the people of colonial
societies. The immediate cause of famines was invariably drought or
unseasonal ruins. There is not much disagreement on this point. Even
nationalists like R.C Dutt have accepted this. The cultivator who lived
under British rule became a permanently famine stricken man. The British
land revenue system was rigid and inflexible in nature. It was fixed on
good and bad years alike. The colonial government was not prepared for
the famine and displayed a lack of urgency in the beginning period of the
famine. When the government understood finally what was required,
there was no holding back , but by that time it was too late. With the
onset of the famine instructions were given by the government that „no
interference was to be permitted with prices of food grains‟. The British
government abandoned pre- colonial policies to compact natural
calamities and food scarcity in India. It seems they tried to deal with „non-
interference‟ in the market and refused to take measures to increase
supply and also to control the food grain prices during the famines. They
were more interested in the implementation of non-interference in the
market.

A major characteristic of British rule in India and the net result of British
economic policies, was the prevalence of extreme poverty among its
people. While historians disagree on the question whether India was
getting poorer not under British rule, there is no disagreement on the fact
that throughout the period of British rule most Indians always lived on the
verge of starvation. As time passed, they found it more and more difficult
to find employment or make a living. British economic exploitation, the
decay of indigenous industries, the failure of modern industries to replace
them, high taxation, the drain of wealth to Britain and a backward
agrarian structure leading to the stagnation of agriculture and the
exploitation of the poor peasants by the zamindars, landlords, princes,
money lenders, merchants and the state gradually reduced the Indian
people to extreme poverty and prevented them from progressing India‟s
colonial economy stagnated at a low economic level.

The poverty of the people found its culmination in a series of famines

which ravaged all parts of India in the second half of the nineteenth
century. The first of these famines occurred in western Uttarpradesh in
1860-61 and coast over 2 lakhs of lives. In 1865-66 a famine engulfed
Orrissa, Bengal , Bihar, and madras and took a toll of nearly 20 lakhs of
lives, Orrissa alone losing 10 lakh people. More than 14 lakhs of persons
died in the famine of 1868-70 n western Uttarpradesh, Bombay and
Punjab. Perhaps the worst famine in Indian history till then occurred in
1876-78 in Madras, Mysore, Hyderabad, Maharashtra, western
Uttarpradesh, and Punjab. The famine of 1899-1900 followed quickly and
caused widespread distress. In spite of official efforts to save lives through
provision of famine relief, over 25 lakhs of people died. Apart from these
major famines, many other local famines and scarcities occurred. William
Digby, a British writer , has calculated that, in all, over 28,325,000 people
died during famines from 1854 to 1901. Another famine in 1943 carried
away nearly three million people in Bengal. These famines and the high
losses of life caused by them indicate the extent to which poverty and
starvation had taken root in India.
According to Bipan Chandra, the basic fact is that the same social,
political, and economic processes that produced industrial development
and social and cultural progress in Britan also produced and then
maintained economic under development and social and cultural
backwardness in India. The reason for this is obvious. Britan subordinated
the Indian economy to its own economy and determined the basic social
trends in India according to her own needs. The result was stagnation of
India‟s agriculture and industries, exploitation of its peasants and workers
by the zamindars, land lords , princes, money lenders, merchants,
capitalists and the foreign government and its officials, and the spread of
poverty, disease and semi- starvation. Lord Lytton arrived as the British
viceroy in 1876 and in the same year a famine broke in India which
claimed the lives of nearly 10 million people. In the initial stages in raged
over most of the parts of south India like madras, Bombay, Hyderabad and
Mysore and then it struck parts of central India and Punjab. Famine was a
recurring feature of the life in India,. Which reached its numerically dead
list peak in the late 18th century, in the early stages of colonialism. These
famines were bad enough to have a remarkable impact on the long term
population growth of the country. It is reported that altogether twenty four
famines had occurred during the second half of the 19th century, taking
away the lives of more than thirty million people.

The famines in colonial India were the product of both uneven rainfall and
economic and administrative policies of the British government, like rack
renting, levies for war efforts, free trade policies, expansion of export of
agricultural products and neglect of agricultural investment. Export crops
displaced millions of acres of land that could have been used for growing
crops for domestic subsistence. It has been argued that famines in British
India were not caused by the lack of food in particular geographical area
instead, because on inadequate transportation of food, which in turn was
due to the absence of a political and social structure. The large scale loss
of human life, due to a series of famines between 1860 and 1877 became
the cause of the political controversy and discussion in India and England,
which finally led to the formation of the Indian famine commission in 1880
by the then viceroy , lord Lytton. Though by the viceroy was not in favor
of appointing the famine commission in the beginning , he had to
succumb to the growing demands. The famine commission was formed
under Richard Strachey to enquire into the causes of famines and to
recommend relief measures to be adopted by the government to mitigate
the sufferings of the people . the commission submitted its report in the
same year itself and on the basis of the report, a famine code was
prepared, which laid down certain regulations relating to famine measures
to be adopted in future. The famine commission of 1880 concluded that
famines occurred in the country mainly due to unusual drought because of
the failure of the customary rainfall, leading to the failure of food crops on
which the subsistence of the population depended. In fact the famine
commission report relieved the government from any responsibility for the
horrific mortality. It was asserted that cheaper famine labor could be
fruitfully used in modernized projects such as railways road construction,
masonry works etc. the report further held that the casualty was caused
by natural phenomenon and that human agencies have no control over it.
All the British viceroys in India; especially Lytton and Ripon believed to the
doctrine that it was the climate and failure of rain that caused failure of
crops which paved way for the outbreak of famine. Adomsmith‟s laissez-
faire approach , i.e. the principle of non- intervention, was firmly laid down
as a part of state policy and therefore was strictly implemented in all
subsequent famines. It was said that in the past during the natural
calamities, the previous rulers undertook harsh measures to persecute
traders and fixed maximum selling prices for food grains. Thoman
Malthus, who argued famines were a natural measure through which
populations are ultimately capable of maintaining a balance between
population and natural resources. According to him, large numbers of
deaths were the last result for a population that had exceeded its
resource base. Dadabhai Naoroji thoroughly exposed the British colonial
policy of exploitation, leading to the misery of Indian people. According to
R C. Dutt, the heavy enhancement of revenue, particularly in the
Royatwari areas, was the main reason for the extreme poverty and lack of
power among the cultivators to withstand the vicissitudes of the seasons
of India. Dutt criticized the colonial government for high land revenue
charges. Amartya sen presented an economic perspective on famines and
his key concept was individuals entitlement , which is defined as all the
commodity bundles that can be obtained from the resources at her /his
command. According to him, starvation and lack of food availability arises
from “entitlement failure”. This failure could be due to a loss of
endowments or a change , such as through production and trade in which
endowment are transferred into entitlements.

Industrialization Deindustrialization Debate

Development of Modern Industries:

An important development in the second half of the nineteenth century

was the establishment of large- scale machine- based industries in India.
The machine age in India began when cotton textiles, jute and coal-
mining industries were started in the 1850s. the first textile mill was
started in Bombay by Cowasjee Nanabboy in 1853, and the first jute mill
in Rishra(Bengal) in 1853. These industries expanded slowly but
continuously. In 1879 there were 56 cotton textile mills in India employing
nearly 43000 persons. Most of the modern Indian industries were owned
or controlled by British capital foreign capitalists were attracted to Indian
industry by the prospect of high profit. Labour was extremely cheap; raw
materials were readily and cheaply available; and for many goods, India
and it neighbors provided a ready markets. Foreign capital easily
overwhelmed Indian capital in many of the industries. Only in the cotton
textile industry did Indians have a large share from the beginning, and in
the 1930s, the sugar industry was developed by Indians. Another serious
weakness of Indian industrial efforts was the almost complete absence of
heavy or capital goods industries, without which there can be no rapid and
independent development of industries. Apart from machinebased
industries, the nineteenth century also witnessed the growth of plantation
industries such as indigo, tea and coffee . they were almost exclusively
European in ownership. Indigo was used as a dye in textile manufacture.
Indigo manufacture was introduced into India at the end of the eighteenth
century and flourished in Bengal and Bihar. Indigo planters gained
notoriety for their oppression over the peasants who were compelled by
them to cultivate indigo. This oppression was vividly portrayed by the
famous Bengali writer Dinbandhu Mitra in his play Neel Darpan in 1860.
The invention of a synthetic dye gave a big blow to the indigo industry
and it gradually declined. According to Bipan Chandra, on the whole,
industrial progress in India was exceedingly slow and painful. It was
mostly confined to cotton and jute industries and tea plantations in the
nineteenth century, and to sugar and cement in the 1930‟s. as late as
1946, cotton and jute textiles accounted for 40 percent of all workers
employed in factories. In terms of production as well as employment, the
modern industrial development of India was paltry compared with the
economic needs. He added that, moreover, even the modern industries
had develop without government help and often in opposition to British
policy. British manufacturers looked upon Indian textile and other
industries as their rivals and put pressure on the government of India not
to encourage but rather to actively discourage industrial development in
India. Thus British policy artificially restricted and slowed down the growth
of Indian industries in the 1920s and 1930s under the pressure of the
rising nationalist movement and the Indian capitalist class, the
government of India was forced to grant some tariff protection to Indian
industries. An important social consequence of even the limited industrial
development of the country was the birth and growth of two new social
classes in Indian society- the industrial capitalist class and the modern
working class. These two classes were entirely new in Indian history
because modern mines, industries and means of transport were new.
Even though these classes formed a very small part of the Indian
population, they represented new technology, a new system of economic
organization , new social relations, new ideas and new outlook.

DE-INDUSTRISALIZATION

De industrialization is a process in which the industrial activity in a

country or a region is reduced because of major economic or social
change. It is the process of destruction of Indian handicraft industries by
competition from the products of British manufacture during the
nineteenth century. India‟s traditional village economy was characterized
by the blending of the village economy had been systematically
slaughtered by the British government. In the process, the traditional
handicraft industries slipped away, from its pre- eminence and its decline
started at the turn of the 18th century and proceeded rapidly almost to
the beginning of the 19th century. Indian writers address the exploitative
features of British rule as the cause of 19th century decay. But the
western scholars didn‟t accept the exploitation thesis and they put
forward their theories ,Morris D Morris such western scholars , he was
severely criticized by Indian scholars. In England, however, the suffering
caused by the decline of handicrafts was counter balanced fairly soon by
the much greater employment and income- generating effect of factory
industries in Indian colonial case, the artisans were made to shoulder the
burden of progress being achieved in country six thousand miles away,
since the growth of Indian factories was non-existent before the 1850s
and 1860s and painfully slow even afterwards. It was left to a recent U.S
scholar , Morris D Morris, however , to argue that de industrialization itself
was a myth. Precise statistical proof of the decline of handicraft is
admittedly difficult find, both for the pre- census period and even
afterwards, as the 1881-1931 census series, often quoted by nationalist,
was shown by Danel Thorner to be based on a confusion of categories and
therefore not a clear indicator of a decline in the proportion of population
dependent on industries. Nationalist relied heavily on statistics of external
trade indicating a collapse in traditional Indian textile exports, and a rapid
increase in Lancashire imports, but these do not constitute a definite proof
of decline in aggregate uniform and cataclysmic process assumed in
popular nationalist literature. One must distinguish between types of
artisan products, regions and varying time- periods. Urban luxury
manufactures like the high quality silks and cottons of Dacca or
Murshidabad must have been hit first, by the almost simultaneous
collapse of indigenous court demand and the external market on which
these had largely depended. Village crafts in the interior, and particularly,
in regions other than eastern India where British penetration was earliest
and deepest, probably survived much longer, coming to be seriously
affected only with the spread of railways. Yet the arguments of Morris
seeking to refute the whole theory of deindustrialization are in fact more
conjectural and dubious then those usually offered by the much- abused
nationalists. Indigenous textile production , Morris argues, could have
remained constant or even increased despite the big rise in imports from
Lancashire, because of an allegedly massive upswing in Indian demand
sufficient to cover both but no data at all is given to prove this upswing.
The argument that indigenous weavers benefited from the lower price of
imported yarn ignores both the ruin of Indian spinners as well as the
problems caused by the fall in the price of woven goods , due to cost-
reducing technological innovations in England but not in India. Lancashire
manufacturers benefited from coast reductions in both spinning and
weaving. Indian weavers gained from the use of cheaper imported yarn,
but there was no decline in weaving costs, and yet they had to complete
with the lower prices of imported cloth-and so, as Toru Matsui pointed out
in his very effective rejoinder to Morris, their conditions could hardly have
improved. According to Sumit Sarkar, deindustrialization was assumed to
have been a fact, and a lot of scattered data was given about it, in a large
number of unimpeachable official sources like census and famine reports
and regional industrial surveys. Surveys of Bengal manufactures by Collin
in 1890 and Cummings in 1908. He added that the sufferings of artisans
have to be kept in mind as a significant factor in the understanding of
many movements of our period, both in the way in which
deindustrialization stimulated patriotic sentiments among intellectuals
alike in the moderate; extremist and Gandhian eras, as well as more
directly , in occasional urban and rural explosions of various types.
However, some modern economic historians have questioned this
nationalist thesis. They argue , first of all, that the rate of
deindustrialization , if it did occur at all, is difficult to quantify, because of
the paucity of reliable data and also multiple occupations of the Indian
artisans, many of whom were often involved in agriculture as well some
other recent researches, however, reveal that the nationalist position
might not have been so incorrect after all , as the available statistical data
from Gangetic Bihar clearly show that the proportion of industrial
population to total population of that region declined from 18.6 percent in
1809-13 to 8.5 percent in 1901. Greater fall was in the percentage of
weavers and spinners, whose proportion to the total industrial population
declined drastically from 62.3 to 5.1 percent during the some period. That
does not bring the „deindustrialization‟ debate to a convenient
conclusion, for it has been shown further that while employment declined,
real income per worker in industry increased between 1900 and 1947 and
this did not indicate overall regress in the industrial situation. This rising
industrial income was not certainly due to the intervention of modern
industries in India, but , as, Tirthankar Roy has argued, because of
increasing per worker productivity in the crafts. This was achieved
through technological specialization and industrial re- organization, such
as substitution of family labour with wage labour within the small –scale
industry, which was mostly the case in the handloom textile sector. As
Roy further suggests, there is also evidence of „a significant rise in labour
productivity‟ in other small- scale industries as well, resulting from a
process which he describes as „ commercialization‟. One of the reasons
behind this lack of overall economic development was that the colonial
state in the colonial state in the nineteenth century was far from just a
“night watchman”, as supposed by Morris D Morris. Morris D. Morris was a
professor of university of Washington inaugurated the industrialization
debate by publishing his article entitled “Towards a Re Interpretation of
19th Century Indian Economic History” in the march 1968 volume of
Indian economic and social history review. Morris opined that the
„traditional India‟ , a subsistence economy which was self contained and
static. He also argued that Indian society has been based historically on a
non-animal powered agriculture. Agriculture in India seems always to
have been characterized by very low yields. Rotation, falling, green
manuring and double cropping were known. Extremes of
temperature ,very short growing seasons, and the restricted supply of soil
moisture made it impossible to achieve high yields. Morris D Morris
argued that the British rule introduced the political framework of the
nineteenth century liberal nation state. Public order was established on a
scale over before never achieved in India. Taxation and commercial
regulations were largely eliminated. A high degree of stability,
standardization and efficiency was achieved in administration . It
stimulated economic activity. Morris „s tentative conclusion is that , at
worst , the vast expansion of British expansion of British cloth exports to
India slammed off the expanding demand. The handloom weavers were at
least no fewer in number and no worse off economically at the end of the
period than at the beginning. The net effect for the economy was a
positive one in terms of per capita income. According to Morris, the late
nineteenth century also was the rigid growth of modern factories for the
production of cotton and jute- fabrics, the development of a great railway
network, and the expansion of the coal mining industry to support these.
There was also remarkable expansion of commercial activity, both
domestic and foreign. The growth of cities as centers of demand, on a
scale not achieved previously , stimulated domestic commerce. In
addition , he argued, there was a growing international market for
traditional primary products as well as the creation of trade in new
products such as tea. He also argued that we have a fairly solid basis for
arguing that per capita real product rose significantly during this period.
he conclude his paper on de industrialization in India with some notes of
warning about this analysis. First, this discussion is based on assumption
of stagnation during the inter war period. it is entirely possible that the
crude estimates of output trends which are currently available has led as
astray. We tend to ignore the geography of the problem, the size and
resources of the region within which the process has to occur. Therefore ,
Morris argued that, if we keep these features in mind, we may see the
nineteenth century as a period too brief to achieve all the structural
changes needed to provide the pre conditions of an industrial revolution.
Bipan Chandra began by interrogating the word „reinterpretation‟ in the
title of Morris‟s initial paper and argued that “ Morris is not presenting a
new interpretation of nineteenth century economic history but only re
articulating with a bit more of modern economic terminology… the
nineteenth century imperialist approach which underlies most of British
official and unofficial writing of the time. Bipan Chandra , Toru Matsui and
Tapan Roy Chaudhari have argued in response to Morris , that evidence
point towards deindustrialization . going by reports of famines, eye
witnesses and traveler‟s accounts, official enquires and government
reports of the British east India company etc. were all pointers towards
the worse possible impact of British manufactured goods in India. These
thinkers said that there was not enough evidence for showing the growth
in per capita income, in fact all evidence was on the contrary,
demonstrating that per capita income was falling down because
indigenous spinning, that fed the hand looms had suffered. Bipan Chandra
made two important points: first that the stagnation itself was structural
and it was a structure in which British imperialism was directly
implicated . he noted: “more over… this increase in agricultural
production was a reflection of the British desire to make India an agrarian
hinterland of Britan so that India could… supply its raw materials and food
needs as well as act as a market for industrial products and capital. After
all it is no purl of imperialist economic interests to produce all round
stagnation. Though that might be the indirect consequence of their
policies. The second was that it is under British colonialism that the land –
human ratio significantly worsened and that the deindustrialization that
the Indian economy witnessed during the 19th century had important role
to play in that worsening. Toro Matsui was considered one of the historian
who was part of the deindustrialization debate . His argument was can
analyze. Toro Matsui who was critically approached to Morris. Against the
view of Morris can lends that during the 19th century there was
substantial increase in total real output and a significant rose in per capita
real product and that it is wrong to maintain . that the British took over a
society that „was ripe‟ per an industrial revolution and then frustrated to
development. According to Tapan Rey Chaudhari that the India had a
political unity and economic stability.