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The Cambridge Economic History of India
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Book description

The Cambridge Economic History of India, published in two volumes, aims at tracing the changes in the economy of India from the thirteenth to the middle of the present century and beyond. The second volume covers the period 1757–1970, from the establishment of British rule to its termination, with epilogues on the post-Independence period. Part I opens with a broad description of the economy in the middle of the eighteenth century, then describes general economic trends in four main regions up to the middle of the nineteenth century, and includes a discussion of changes in the agrarian structure up to the end of 1947. Part II takes up various themes for the economy as a whole, while Part III deals with post-Independence developments in India and Pakistan. The Cambridge Economic History of India will be widely accepted as the standard work of reference on the subject, and the volumes will be of relevance to fields other than economic history, being the first major collaborative work of its kind to explore the shift of an advanced Asian civilization from pre-colonial times to independence.

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Page 1 of 2

  • I - The mid-eighteenth-century background
    pp 1-35
  • View abstract
    At its height the Mughal empire had imposed on the greater part of the Indian sub-continent a fair measure of political unity. Historians of a later generation have equated the decline of the Mughal empire with sharp downward trends in the Indian economy, and assumed that by the mid-eighteenth century it had reached its lowest ebb. The categories used in the Mughal revenue literature in describing villages are a useful if somewhat indirect source of information on the subject for northern India. The identification of different levels of land rights in India has been hag-ridden by the confused use of terms both in the Persian and the English sources. By the mid-eighteenth century, development of market forces had made deep inroads into the subsistence character of Indian agriculture, though the producer continued to meet all his requirements of food out of his own produce.
  • 1 - Northern and Central India
    pp 36-86
  • View abstract
    The upper Gangetic region, which today falls largely within the boundaries of Uttar Pradesh, exercised a palmary influence on the evolution of the Indian landholding system in the colonial period. When the British annexed the upper Gangetic region and formed the Ceded and Conquered Provinces in 1801-03, they at first made considerable use of the magnate element for local revenue collection purposes. Apart from increasing the importance of cash in the agrarian economy, the other important change effected by the British revenue system in the first half of the nineteenth century was to make the incidence of the revenue demand more uniform, at least within individual districts. The last half-century of British rule in the United Provinces witnessed a sharp intensification of agrarian difficulties and an increasing reponsiveness of the land revenue administration to political pressures. By the beginning of the century the net cultivated area reached almost its maximum extent of some 35 to 36 million acres.
  • 2 - Eastern India
    pp 86-177
  • View abstract
    This chapter emphasizes that despite certain elements of continuity, the pre-British agrarian society and system was not quite the same as that which evolved during British rule. The continuity of the small peasant economy as the basic organization of agricultural production, and the continuities in terms of certain agrarian institutions, and of the numerical sizes of some economic groups, such as sharecroppers and agricultural labourers, concealed a significant process of change. Initially, throughout eastern India, the most decisive influence was the British policy of maximizing land revenue, which gradually lost its first potency, particularly in Bengal and Bihar, with the share of the state in the total agricultural produce eventually shrinking to insignificance. In other parts of eastern India, too, the old order could scarcely be wholly preserved, and the composition of the landed society considerably changed, mainly as a result of the growth of a land market, an altogether new development in the rural society.
  • 3 - Western India
    pp 177-206
  • View abstract
    Western India comprises roughly the long narrow coastal area from the Rann of Kutch to north Kanara; the wide flat Gujarat plains and the Deccan plateaus. The new system of survey and assessment framed by G. Wingate and Goldsmid in 1835, called the Bombay Survey System, was introduced with some modifications into all the government villages of the Presidency, including British Gujarat. After the conquest of greater Gujarat in 1803 and 1817, the Peshwa's domains, about one-third of Gujarat, became part of Bombay Presidency; another third of Gujarat proper and part of Saurashtra was assigned to the Gaikwad's Baroda state, and in the remaining third, about 150 small princely states were recognized. From the middle of the nineteenth century, western India began to emerge from the sustained depression of the first third of the century, when prices and output were low, and when large tracts of land and many villages and small towns were deserted.
  • 4 - South India
    pp 207-241
  • View abstract
    South India is a region of great physical diversity. This is also a region of great social and historical diversity. This chapter starts with a description of the agrarian structure as the British found it. Next, it describes changes in agrarian relations and government policy affecting them, particularly as regards the land revenue, between 1792 and 1855. Three regions are described separately: Madras Presidency excluding British Malabar and south Kanara, the west coast, and Hyderabad and Mysore. Since there are much more data available on such matters as agricultural prices, wages, rents and conditions of tenancy from 1855 onwards, the section covering the period 1855 to 1947 is organized rather differently. After a discussion of changes in governmental policy, the chapter describes the changes in the fortunes of the main agricultural groups including landowners, tenants and labourers.
  • 1 - North India
    pp 242-270
  • View abstract
    This chapter outlines economic organization and activity in late-eighteenth-century north India. One way to penetrate the diverse historical experience of various parts of north India in the period is to get a sense of how the economy was organized in the middle of the eighteenth century in terms of different types of trade. By distinguishing between trade in luxury goods, wholesale commodity trade, and localized exchanges around towns and cities and within complexes of related villages, one can obtain a rough picture of economic organization applicable to north India in general. The chapter also emphasizes the pivotal role of the state of transportation in the Mughal period. It shows that the expansion of the commodity trade down the Ganges river, a consequence of peace and security and the connection to the world economy via Calcutta, is the key factor for the economic history of the region. The chapter also reviews the changes in north Indian agriculture in the nineteenth century.
  • 2 - Eastern India
    pp 270-332
  • View abstract
    The Ganges river system, together with the Brahmaputra further east, shaped the human geography and economic life of eastern India. In some parts of eastern Bengal the river was the only channel of communication and bulk transport of commercial goods. A notable development in the agricultural history of eastern India during our period was the growth of commercial agriculture. Though the cultivated area under cash crops remained, till the end of the period, too small appreciably to affect the peasant economy of the region as a whole, the effects of the growth were far from negligible, and its study would also indicate the factors in the decision of peasants to change over from the traditional subsistence crops to cash-crops. The growth of commercial agriculture, even where it did not lead to the emergence of a distinct export sector, necessitated a great deal of adjustment in the old organization of the small peasant economy.
  • 3 - Western India
    pp 332-352
    • By V. D. Divekar, Gokhale Institute of Politics and Economics, Poona
  • View abstract
    Prior to the middle of the nineteenth century, agriculture in Western India was the only means of livelihood for the overwhelming majority of the population. The steady though gradual expansion in cultivation in most parts of western India was checked towards the closing years of the Maratha rule, and during the first fifteen years or so after the East India Company took over the political power. Transport facilities were perhaps more meagre and expensive in western India than in any other part of the country. This affected severely not only the cotton economy but the process of agricultural development as a whole. The condition of the western Indian agriculturist, which had been made grievous by the calamitous fall in the prices of grain in the first half of the nineteenth century, also started to improve gradually with the increase in agricultural trade and the rise in agricultural prices after the 1850s.
  • 4 - South India
    pp 352-375
  • View abstract
    This chapter first presents quantitative statements about the south Indian economy from 1757 to 1800. Much of the economic history even of the first half of the nineteenth century is still obscure for the Madras Presidency and more so for the native states. The best one can do is to evaluate what is known about the important magnitudes such as foreign trade, population, and agricultural and industrial output, and speculate on some of the interconnections between them. There were three striking features of the Madras Presidency's foreign trade in the first half of the nineteenth century. Exports grew very fast; the pattern of exports changed sharply; and despite the large net trade surplus, bullion was exported in large amounts. One would expect an increase in agricultural output to stimulate industrial growth, not only directly in the agricultural processing industries but also by increasing the demand for agricultural producers' goods and for consumer goods.
  • IV - National Income
    pp 376-462
  • View abstract
    This chapter first gives an overview of past work on national income in India. It discusses methods of developing comparisons of per capita income, beginning with simple comparisons of the estimates of writers at different points of time. The discussion then turns to methods for building up annual series, or five- or ten-year series of estimates for different years, or methods to extrapolate estimates forward and backward, versus direct estimates to build up a per capita income series. Then, the chapter explains agricultural and non-agricultural income over the period 1857-1947. Agriculture has been the most important sector of the economy of the sub-continent and warrants considerable attention. Some checks of the national figures are made against alternative indicators of economic growth. Interest in agricultural statistics has a long standing in India, and early surveys often estimated acreage and production on a scattered basis.
  • V - Population (1757–1947)
    pp 463-532
    • By Leela Visaria, Sardar Patel Institute of Economic and Social Research, Ahmedabad, Pravin Visaria, Sardar Patel Institute of Economic and Social Research, Ahmedabad
  • View abstract
    This chapter discusses the growth of population in the Indian subcontinent during the period 1757-1947 and the determinants of the observed growth rates including mortality, fertility and migration. Even prior to the censuses conducted during 1867-72, enumerations of populations and houses were attempted in different parts of the country and in cities like Benares, Dacca, Bombay. A brief examination of these regional data provides a rough guide to the pre-census growth of population. The censuses conducted between 1867 and 1872 actually paved the way for the uninterrupted series of decennial censuses in the Indian subcontinent, which have been the major source of information on trends in population and its characteristics. The census data have been compiled for territorial units down to at least the district level, and in some cases to taluka or tehsil level. The chapter discusses the rate of growth, sex ratio, the age composition of the population and fertility and mortality estimates derived from the census data.
  • VI - The Occupational Structure
    pp 533-550
  • View abstract
    Economic growth is associated with a relative shift in the structure of the workforce away from agriculture, towards industry and services. The Indian occupational structure showed little sign of change over the whole period 1881-1951. This chapter examines changes in the employment pattern for undivided India between 1901 and 1951, concentrating on the results for males. For both cultivators and agricultural labourers there was a slight rise in relative shares. The chapter also examines changes within the manufacturing sector in both male and female employment. It would be futile to attempt to explain these changes or draw conclusions about them without examining closely the economy of each of these states. The chapter considers four areas for closer scrutiny: Kerala, West Bengal, Rajasthan and east Punjab. In Rajasthan and Punjab irrigation had important effects. In Rajasthan it moderated the effects of the breakdown of pre-modern manufacturing by making agriculture a viable proposition.
  • VII - The Growth of Large-Scale Industry to 1947
    pp 551-676
  • View abstract
    Industrial development in India has been part of the very broad movement which had its origins in Western Europe. This chapter describes the growth of India's modern industries, the forms within which they developed and the character of the labour force that emerged. During the first half of the nineteenth century the industrialization process was taking deep hold in Britain and in other parts of the North Atlantic region but in India the new technology and novel processes had only a trifling impact. Most of what was introduced came as a product of official concern, civilian and military. The history of large-scale private factory enterprise between 1850 and the First World War is associated almost entirely with developments in three industries such as jute, cotton, and iron and steel industries. The development of the three industries reveals a great deal about the complexity of economic response on the sub-continent.
  • 1 - Irrigation
    pp 677-737
  • View abstract
    By the 1920s and 1930s attempts were made to diversify the use of India's water resources, in the direction of hydro-electric power; but the interests of irrigation and the lack of demand for rural electrification militated against such developments for the most part in the agricultural provinces. To estimate the value of irrigation, the Famine Commission was required to go beyond the statements of its financial results and enquire into its general effect, no less, on the character of cultivation in the several irrigation provinces. For northern India, submissions from the governments of Punjab and the North Western Provinces were in agreement that the introduction of canal irrigation had led universally to an increase in cultivation. Unlike the great Punjab canals, the purpose of the Sarda canal system was not to reclaim a wilderness but to replace an existing small-scale pattern of irrigation by a large-scale system in the interest of economy and efficiency.
  • 2 - Railways
    pp 737-761
  • View abstract
    Railways had an impact throughout the Indian economy. The Government of India felt that some lines should be built to lower the risk of famine, and using its power to dictate the location of track, it approved so-called famine lines which were constructed for the purpose of transporting grain to poor famine areas in time of need. The monopoly by the East Indian Railway of much of the area between Punjab and Calcutta, a region rich in agricultural and mineral resources, permitted it to earn 34 per cent of all earnings in 1881 even though it owned only 16 per cent of the total length of track. Railways led to increased agricultural output, the growth of modern industry and mining, new jobs, although many jobs were lost, the redistribution of the urban population, higher incomes for some segments of the population, and numerous other economic changes.
  • IX - Money and Credit (1858–1947)
    pp 762-803
  • View abstract
    The period 1858-1947, which covers some of the most salient developments in the financial history of India, is still highly germane to many of the contemporary concerns of the sub-continent. The chapter reviews the main monetary and financial developments in India during our period under the following headings: monetary standard and policy, origins and development of commercial banking, evolution of central banking, non-institutional finance and cooperative credit. The origins of modern banking in India go back to the late eighteenth and early nineteenth centuries, with the establishment of the European Agency Houses of Bombay and Calcutta. These were primarily trading concerns that had branched out into banking as a sideline to facilitate the operations of their main business. In terms of the overall pattern of internal finance, the unorganized or non-institutional sector of the Indian banking and financial system may be described, conceptually, as a residual sector, usually in combination with trading and other activities.
  • X - Foreign Trade and Balance of Payments (1757–1947)
    pp 804-877
  • View abstract
    This chapter first outlines the institutional changes relating to trade, which followed from the change of government in 1757, and then examines those particular features of Indian overseas trade which distinguish it from later development. The trends and fluctuations in India's overall foreign trade can be classified into two main components: changes, both relative and absolute, in the demand for commodities, and those relating to the geographical distribution of trade. The chapter argues that the changes in the commodity composition of Indian exports were the induced effects of factors operating through demand. Perhaps no other subject connected with India's international economy has generated so much controversy as the commercial and tariff policy pursued first by the East India Company and then the Indian administration under the Crown. The chapter discusses the mechanism which kept India's balance of payments and foreign exchange rates in equilibrium, given the unilateral transfers.
  • XI - Price Movements and Fluctuations in Economic Activity (1860–1947)
    pp 878-904
  • View abstract
    The period 1860 to 1947 was one in which market activity in India appears to have changed substantially. Price data are among the tracks of these changes in market activity. This chapter begins with a short examination of price movements over the entire period, and then moves to a longer examination of the forces determining agricultural prices in India and of the changes in these forces which occurred during this period. Next, it covers the prices of non-agricultural commodities and export and import prices. Relative movements of agricultural and non-agricultural prices and the potential impact of such movements on income distribution are also explained in the chapter. In industrial economies it is generally expected that short periods of rising prices are accompanied by expanding economic activity. Investment will be increasing, output will be expanding, and prices for factors will be bid up. The chapter considers how forces determining price movements may influence the level of economic activity.
  • XII - The Fiscal System
    pp 905-944
  • View abstract
    This chapter first describes the evolution of the fiscal structure, and in particular the gradual move to fiscal federalism and to greater Indian fiscal autonomy. The revenue structure the British inherited was typical of most traditional agrarian economies. The government raised much of its revenue from non-tax sources, such as the forests and the profits of the government opium monopoly. The most important tax was the land revenue. In 1858-59, the land revenue alone accounted for half the government's total tax and non-tax revenues; opium, salt and the customs were the other main sources. Public revenue did not change very much as a proportion of national income, reflecting the difficulties of raising taxes and the government's conservatism over public borrowing. The chapter also discusses some issues of macro-economic policy, such as war finance, and the attempt to balance budgets during the great depression, an extreme example of the orthodoxy that characterized the government's fiscal policy throughout the period.
  • XIII - The Indian Economy since Independence (1947–70)
    pp 945-994
  • View abstract
    The actual performance of the Indian economy since Independence presents a rather mixed picture. There is little doubt that the country experienced a much faster pace of growth, both in the aggregate and in the major sectors, during this period than in the previous decades. The greater dynamism of agriculture in the post-Independence era is clearly the result of larger, more intensive and better coordinated programmes undertaken as part of the five-year plans. The emergence of a dynamic indigenous entrepreneurial class and a progressive spread of industries away from their traditional locations are also noteworthy features of the post-Independence industrial transformation. During the British rule, private foreign enterprise played an important role in the industrial sector. The steady expansion in the scope and range of economic activities undertaken by government is another significant feature of the post-Independence period.
  • XIV - The Pakistan Economy since Independence (1947–70)
    pp 995-1026
  • View abstract
    On 14 August 1947 the Indian sub-continent was partitioned, and Pakistan was carved out of the north-western and north-eastern parts of British India. An account of the Pakistan economy since Independence has to begin with its initial endowment and the effects of Partition. To describe and analyse the broad trends in the economy since Independence one has to use Pakistan's national income accounts and other such available data, although the statistics may not be accurate. Between 1949-50 and 1969-70 the economy made considerable progress in industrial, commercial, and also agricultural development. In contrast to the relative stagnation during the period from Independence to 1959-60 when nothing except nascent large-scale manufacturing grew faster than population, the period from 1959-60 through 1969-70 is one of quite remarkable growth of the Pakistan economy. In the immediate post-Independence period the major portion of imports consisted of manufactured consumer goods.

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