This concluding chapter looks ahead to the challenges facing the economies of Bangladesh, India and Pakistan. The three countries have several challenges in common, including the threat of climate change, the low status of women and the potential of artificial intelligence and robotics to undermine badly needed jobs for their young and growing populations. There are some differences: women’s participation in the labour force is rising in Bangladesh, falling in India and lowest in Pakistan. Bangladesh and India have been on good growth trajectories for the last few decades, but Pakistan’s growth has been slower and less stable. We see many opportunities for research. On the one hand there are neglected areas, such as the princely states of colonial India. On the other hand, the digital revolution has made historical and present-day sources, including data, far more accessible.

Bangladesh became an independent country in 1971. Its territory was formed of the former East Pakistan (1947–1971). Consisting mainly of the well-watered and alluvial eastern Bengal delta, Bangladesh’s economy was mainly agricultural in 1971. Although such large-scale industries as textiles and tea and such small-scale industries as handloom weaving existed on an extensive scale, an overwhelmingly large proportion of the employed workforce was engaged in agriculture. High population density, a low land–person ratio and rural poverty made diversification of the economic base an acute necessity and a challenge. A significant transformation did happen through the Green Revolution, an effective social policy that delivered a demographic transition, and a few large-scale industries forged ahead. The chapter shows how market forces, global influences and state policies combined to shape that process.

This chapter offers a global perspective on Indian education in the colonial era. Indian literacy was significantly below Western Europe in 1800 when adult English literacy (53%) was ten times higher than that of India (estimated to be 6%). While schooling and literacy increased between 1870 and 1940, improvement in India was small compared to the rest of the world. Low income, low fiscal capacity and being a colony all constrained colonial India’s ability to expand mass education, along with norms, for example, that undervalued female education.

This chapter discusses the employment of poor and labouring women between the mid-nineteenth century and the mid-twentieth. In this period, they suffered first a loss of their independent occupations in manual manufacturing and then exclusion from mechanized large-scale industry. This marks the beginning of a persistent and long-term pattern of low female workforce participation in India. The discussion is organized around multiple themes of marginalization, quantitative and qualitative: first, the question of numerical decrease in household industry, craft production and the small-workshop sector; second, the ideological exclusion from mills and mines, which were emerging as preserves of adult men earning family wages; third, resistance to women’s long-distance employment on contracts in plantations, which was perceived as a challenge to familial control over their labour; fourth, commercialization of women’s reproductive work in sectors such as midwifery, domestic work and sex work, providing increasing employment but under stigmatized conditions. These themes are linked to questions of regulation by family, caste, community and the state.

This chapter describes the financing and building of Indian railways, the largest infrastructure investment of the colonial state, and assesses their economic effects. Due to the poor quality of pre-rail transport, railways integrated markets, reduced price dispersion and increased incomes in colonial India. Net earnings as a share of capital were low in the first wave of railway construction and operations because of moral-hazard problems. As the Government of India took ownership of railways from private British companies, working expenses decreased and net profits improved with no negative effects on productivity. Yet the government did not always maximize their railway profits, opting to purchase more expensive British locomotives over cheaper alternatives. Despite these shortcomings, railways were a unique sector of the colonial economy. By the twentieth century, railways were delivering significant tax revenues to the Government along with higher incomes to the country.

This chapter documents the long-run pattern and changes in sectoral labour productivity in India. It explores factors that can explain the historically high labour productivity in services. Literate upper castes in service sector occupations gained from modernization from the late nineteenth century and moved into new high-skilled occupations mainly in services. Colonial education policy prioritized secondary and tertiary education and the higher education bias that continued after independence increased labour productivity in skilled occupations, most of which were in services.

Soon after the establishment of British colonial authority, south India underwent institutional changes in the administrative, military, educational and other spheres. In the countryside, the furthest-reaching of these changes was the introduction of the raiyatwari and zamindari land settlements, which granted a particular class of people in rural society exclusive landownership. The period covered in this chapter, 1850–1950, saw the consequences of these early institutional changes unfold and the emergence of new processes in the urban and service economies, including in transport, trade, finance and industry. The chapter discusses these general trends, paying particular attention to the countryside.

It has been a remarkable journey for India from the nation’s independence in 1947 to now. Economic performance has been mixed, with growth remaining sluggish during the first three decades, and picking up only after the mid-1990s. On the political front, with free media, secularism and a vibrant democracy, India was an outlier in the developing world; it resembled some of the most advanced economies in the world. This chapter is a study of this unusual growth path, over the last seventy years, with a focus on how the economy and politics impacted each other. It is argued that, while early political choices may have slowed growth during the early decades, they played a vital role in India rising to be among the world’s fastest-growing nations in the first decade of the twenty-first century.

This chapter provides an overview of the process of urbanization after 1947 and its impacts, highlighting its contested meanings, measurement and policy outcomes. Noting the contrasting ways in which urbanization is occurring, the chapter first reviews the debates over India’s slow urbanization and its possible causes. It then turns to the way the government has influenced the process through the dirigisme policies of the first forty years since independence, followed by economic liberalization in the last three decades. Some of these policies are best observed in the changing profile of the largest cities of the country, such as the three colonial port cities of Mumbai, Kolkata and Chennai and, to a lesser extent, in small towns and emerging urban places. Improvements in urban services and quality of life have occurred, but unevenly, with small towns and poorer households in larger cities lagging behind.

South Asia’s economies, as well as the scholarship on their economic histories, have been transformed in recent decades. This landmark new reference history will guide economists and historians through these transformations in Bangladesh, India and Pakistan. Part 1 revisits the colonial period with fresh perspectives and updated scholarship, incorporating recent research on topics such as gender, caste, environment and entrepreneurship. The contributors highlight the complex and diverse experiences of different groups to offer a more nuanced understanding of the past. Part 2 focuses on economic and social change in South Asia over the last seventy-five years, offering a comprehensive view of the region’s historical trajectory. Together, the contributions to this volume help to reassess the impact of colonialism through a more informed lens, as well as providing analysis of the challenges and progress made since independence.

Pakistan’s seventy-five-year economic history can be divided into three distinct periods. The first decade after 1947 was a period of low growth, but one in which a functioning state was set up from scratch and rapid industrialization occurred. The 1960–1990 period saw high economic growth but high costs, including the secession of Pakistan’s eastern wing (now Bangladesh), the Soviet occupation of Afghanistan and the ensuing civil war, which spilled over into Pakistan. Between 1990 and 2022, growth halved, primarily due to the continuing conflict in Afghanistan – this time with the US- led invasion after 9/11 – coupled with poor economic management in dealing with recurring balance-of-payments crisis and frequent recourse to the IMF. The key factors responsible for these changes are identified through ten turning points, which capture major events both internal and external and the ensuing structural changes, including in the composition of the ruling elite. Failure to undertake economic reforms was a key factor in Pakistan’s overall disappointing performance after a promising start.

By the end of the nineteenth century, British-ruled India faced an ecological crisis due to the extension of cultivation, deforestation and desiccation. Famines since the 1870s had led to a decline in population in some regions. While colonial authorities attributed the famines to climatic factors, others held taxation, institutional reforms and economic policies responsible for these disasters. Colonial science emerged as a significant tool in managing and monitoring environments at the same time. The chapter examines the interlinked economic and ecological history of India in these times and the responses by the British imperial authorities and scientists to the perceived crisis.

This chapter provides an analytic account of the evolution of India’s industrial sector in the context of the overall performance of the economy in the post-independence era. Since trade policy has had a determining impact on overall growth as well as on the structure of the industry, special attention is paid to it. The chapter first reviews the performance of the industry as a whole during the seventy years from 1951/1952 to 2019/2020, dividing it into four distinct phases. It argues that the pursuit of self-sufficiency, specialization in heavy industry and a heavy hand of socialism were at the heart of growth below 4% during the first four decades after independence. Subsequently, liberalizing reforms did accelerate growth, but the slow pace of the removal of multilayered regulation of the early decades remained in the way of East Asian-style rapid transformation of the economy from a rural and agricultural structure to an urban and industrial one.

Several themes shape the historiography of economics in western India in colonial times, including the history of ryotwari land tenure, international factors like the growing engagement of agriculture with the world markets via cotton exports, dependence on monsoon agriculture and the outbreak of famines and epidemics, and the industrialization of Bombay and Ahmedabad. Although these processes may seem disparate, there were also deep connections between them. The chapter offers an economic history integrating these processes, and shows how western India in the colonial period saw significant innovation and entrepreneurship in industry, in the broader context of an economy that remained largely agricultural, with low productivity and high risk.

Soon after independence, the relationship between private enterprise and the state changed. The industrialization policy made certain sectors of high priority – machines, metallurgy or heavy chemicals – and made it easier for them to access scarce capital and foreign exchange. On the other hand, traditional businesses in textiles, plantations and commodity trades were deprived of access to capital and modernization opportunities, or even banned, along with moneylending. As some of the highly protected priority industries failed to become profitable, and bankruptcy accumulated in the low-priority sectors like textiles, the strategy became unsustainable. After a sharp break around the 1980s or 1990s, private enterprise faced a more liberal environment where it was easier to access capital and technology abroad and invest in offbeat fields. New patterns of inequality in the corporate sector developed again, now due to the challenges of operating in a globally connected and integrated world. The chapter presents this two-stage transition in a chronological narrative.

The chapter describes colonial India’s unique urbanization story. In 1750 India had big urban centres such as Hyderabad and Delhi and urbanization was close to the global average. While urbanization in India increased over the next two centuries, the increase was small compared to the rest of the world and Indian urbanization had fallen significantly below the global average by 1950. Yet the modest temporal change masks the important shift in urban centres from inland in the 1700s to the eastern and western coasts by the 1900s. As British rule expanded, the port cities of Bombay and Calcutta emerged as the new centres of administration, trade and commerce. More generally, cities close to railways grew faster than cities close to rivers. Unlike rural India, colonial towns and cities were characterized by more educated residents, more industrial and service sector jobs, male-biased sex ratios and growing political influence.

The Indian economy has grown rapidly since it began to liberalize in the 1990s, but industrial growth has fallen short of expectations. Curiously, Indian industry did not perform particularly well even during the colonial period, when the state’s approach was close to laissez-faire. How can we explain this? This chapter first shows that colonial India’s industrial stagnation is well represented by the slow progress of labour productivity of leading industrial sectors, which coincided with slow capital formation and slow total factor productivity growth. The chapter then shows that the slow growth of capital and total factor productivity were related to inflexibility in policy choices under the laissez-faire economic policy framework, and the shortcomings of institutional and organizational settings.