India and the World Economy: 1850-1950

328 Pages·2003·112.472 MB·English

by  G. Balachandran

India and the World Economy
1850-1950
edited by
G. Balachandran
•
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UNIVERSITY PRESS
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First published 2003
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Contents
GeneralE ditors'P reface vii
Tablesa nd Figures ix
1. -Introduction 1
G Balachandran
2. India's International Economy in the 46
Nineteenth Century: A Historical Survey
K N Oiaudhuri
3. The Drain of Wealth and Indian Nationalism 70
at the Turn of the Century
JohnM clane
4. Tributes and Transfers from Colonial India 93
Sunanda Sen
5. The Great Depression (1873-96) and the Third World: 155
with Special Reference to India
Amiya K Bagchi
6. Agriculture in Slump: The Peasant Economy of East 180
and North Bengal in the 1930s
Omkar (h;wamj
7. Indian Monetary Vicissitudes: An Interlude 223
Marcello de lffm
• ',
vi CONTENTS
8. Britain and the Indian Currency Crisis, 1930-2 245
B. R. Tomlinson
9. The Depression 266
G. Balachandran
Index 307
Notes oo Cootr.butors 320
General Editors' Preface
The DEBATES IN INDIAN HISTORY AND SOCIETY series is
an exploration in the discourse of history to focus upon the
diversity of interpretations. The series is intended to address
widely debated issues in South Asian history (including
contemporary history) through volumes edited by experts in
the concerned area of study. The editor of each such volume is
asked by the General Editors to select writings by various scholars
focusing upon a debatea theme and to write an introductory
essay. The approach encourages the interrogation of history, as
distinct from the common tendency to present history as a
collection of 'given' facts. It brings to the reader the research
base upon which scholars have founded their interpretative
framework. And it opens up to the students bridge-heads into
the terrain of research .
This volume, the second in the series, reflects the agenda
outlined above. Dr G. Balachandran, in editing this collection of
essays, evidently bore in mind the objective of focusing upon
the diversity of interpretations-and the implicit debate on the
ideological premises of interpretations-in the literature on
India's historical role in the global economy from the mid
nineteenth century . In order to sharpen the focus on the issues
debated, the editor has fore-grounded the 'revisionist' critique
that developed in recent times in response to the Nationalist
• econ\mists' paradigm. This discursive strategy has opened up
many questions which merit attention . Did Dadabhai Naoroji
(
viii GENERAELo noRS'P REFACE
and R. C. Dutt's emphasis on Indo-British economic relations, to
the exclusion of India's commercial links with Asia and Africa
and other parts of the world, engender a lopsided appreciation
of this country's global trade relationships? How does the pattern
of colonial India's external account liabilities, including the 'drain
theory' of the nationalists, look like in the light of the scrutiny of
recent day economic historians? What were the implications of
colonial India's external liability translated into domestic liabilities
for the country's population and did that promote an 'internal
drain', i.e. transfer of incomes from the peasant households to
the trading intermediaries, from the rural hinterland to the
colonial metropolises? Given the priority accorded by the colonial
government to the discharge of India's external account
obligations, have the revisionist critics of the nationalist thesis
underestimated the importance of India's subordinate political
position and exclusion from participation in policy making? These
and other questions posed in this volume invite new research
and at the same time the book offers a summing up of the
present state of historical knowledge in an area of study which
is beginning to receive a lot of attention in this 'era of
globalization .'
Tables and Figures
Tables
2.1 Index of exports, imports, and treasure; percentages 60-1
of imports, invisible and debt payments, and Home
Charges in the total export values; exports as
perc~ntages of total agricultural output, 1898-1914
3.1 Expenditures on overseas military expeditions, 1838- 81
42 to 1885-6
3.2 European salaries in India 84
4.1 Pattern of overseas expenditure under Home Charges: 107
1861-2 to 1913-14
4.2 Changes in the composition of public debt in India: 112
1867-97
4.3 Balance of trade (merchandise and treasure) and 137
council bills sold
4.4 Comparative estimates of selected items in India's 144-6
balance of payments: 1899-1900 to 1908-09
5.1 Bank rates, 1874-96 162
5.2 India's export surplus, council bill sales, and silver 168-9
imports, 1870--1t o 1892-3
• ")
X TA BLffi AND FIGURES
5.3 Net imports of silver into India and new coinage of 170
rupees, 1870-1 to 1892-3
6.1 Proportion of raiyats, under-raijats, and proprietors 183
in the major jute districts of Bengal
6.2 Prices and output of raw jute and winter rice and 184-5
surplus of a 4-acre raiyatifamily
6.3 Net cultivable area per rural family, 1911, 1921, 1931 187
6.4 The jute industry during the 1930s 192-3
6.5 Jute and winter and autumn rice prices, 1926-38 195
6.6 Gross real and money income from jute and winter 196
rice cultivation in the major jute districts, 1926-38
6.7 Deductions and allowances made from the villages 200
to the secondary markets
6.8 Surplus/Deficit from jute and winter rice cultivation 201
for a 3-acre permanently occupying settled raiyatafter
making generous assumptions, 1930-8
6.9 Indebt~dness in rural Bengal, 1929 and 1934 203
6.10 Transfers of raiyatiholdings in the 1930s 207
6.11 Transfers of raiyabboldings, 1926-38, under sections 208
of the Bengal Tenancy (Amendment) Act
6.12 Distribution of landholdings in 1939 209
7.1 Levels, composition, and location of the Indian Gold 232
Standard Reserve
7.2 Balance of payments of India 238
7.3 Transactions of the Government of India in the
London money market and broker's commision 240
expenses
7.4 Net credit balance of the Government of India on 241
31 March
TA BU5 AND FIGUR15 xi
9.1 Indian current account, 1926-? to 1937-8 273
'·~
9.2 India's capital account, 1926-7 to 1937-8 274
9.3 Gross coin and note circulation, quarterly, 1929-34 280
9.4 Official British holdings of gold and foreign 288
exchange, half-yearly, 1931-8
9 .5 Calcutta index of wholesale prices, 1929-37 290
9 .6 British gold and foreign exchange reserves as 293
proportion of net external liabilities and imports
Figures
4.1 Mode of remittance between England and .India 101
during British rule
6.1 Trends in world output and gunny supply, 1920-39 194
•
1
Introduction
G Balachandran
For a subject that was so central to the formati~e impulses of its
economic nationalism, India's historical engagement with the
international economy has attracted relatively little scholarly
attention in the last few decades. Several reasons may be held to
account for this neglect: the canonical status of the 'nationalist
economists' who wrote on the subject, in particular Dadabhai
Naoroji and R. C. Dutt; the tighterung of India's external economic
controls since the 1950s;a nd the complicit evolution of disciplinary
regimes in both mainstream economics and history . Thanks to
this neglect, what passes for 'common sense' about India's recent
past as a trading and commercial nation is based on highly
reductionist and ahistorical readings (absorbed mainly through
text-books produced by the National and State Councils of
Educational Research and Training) of Naoroji and Dutt.
This common sense, oddly though it may sit with some
current fashions, is not intrinsically 'wrong' (or 'right') . It is
nevertheless instructive to tease its principal constitutive
elements out into the open and widen the perspectives with which
to address them. India's early economic nationalists possessed
an extensive awareness of the wider world as it was forming
around them in the closing decades of the nineteenth century .'
But their sights were unwaveringly trained on the British Empire
and on India's imperial economic relationships . Whether this was
• mer'~ly a discursive s_trategy or reflected the influence of
contemporary liberal economic and political beliefs in Britain