Thammasat University students interested in economics, business, history, South Asian studies, political science, international relations, diplomacy, India, and related subjects may find it useful to participate in a free 16 December Zoom webinar on An Economic History of India: Growth, Income and Inequalities from the Mughals to the 21st Century.

The event, on Monday, 16 December at 11:30am Bangkok time, is organized by the Hong Kong Institute for the Humanities and Social Sciences, The University of Hong Kong (HKU).

The TU Library collection includes books about different aspects of the economics of India.

Students are invited to register at this link:

https://hku.zoom.us/webinar/register/5817326069296/WN_HxUZ_1K2Q26BSFrUb2fPmA#/registration

The speaker will be Professor Bishnupriya Gupta, who teaches economics at the University of Warwick, the United Kingdom.

The event announcement states:

As part of the Quantitative History Book Launch Series, this public lecture unveils a significant new economic history of India spanning from the reign of Akbar in the sixteenth century to its post-independence integration into the global economy.

Through the application of economic concepts and theories, alongside extensive new data, Bishnupriya Gupta of the University of Warwick constructs a new framework for comprehending the economic impacts and legacies of British rule. She traces India’s transition from a pre-colonial economy to colonial rule and assesses its economic performance from a comparative perspective, particularly in the context of the Great Divergence between Europe and Asia.

Finally, she examines India’s post-independence economy and the evolution of social and economic inequality through to the turn of the twenty-first century.

In 2019, Professor Gupta published an article, Falling behind and catching up: India’s transition from a colonial economy, in the Economic History Review.

Here is the article’s abstract:

India fell behind during colonial rule. The absolute and relative decline of Indian GDP per capita with respect to Britain began before colonization and coincided with the rising textile trade with Europe in the 18th century. The decline of traditional industries was not the main driver Indian decline and stagnation. Inadequate investment in agriculture and consequent decline in yield per acre stalled economic growth.

Modern industries emerged and grew relatively fast. The falling behind was reversed after independence. Policies of industrialization and a green revolution in agriculture increased productivity growth in agriculture and industry, but Indian growth has been led by services.

A strong focus on higher education under colonial policy had created an advantage for the service sector, which today has a high concentration of human capital. However, the slow expansion in primary education was a disadvantage in comparison with the high growth East Asian economies.

Excerpts from the article:

At midnight of 15th August 1947, India became an independent country. It ended 200 years of colonial rule under the British Empire. It altered the borders of India. Two distinct regions from the Western and the Eastern sides were carved out as a separate political entity of the state of Pakistan.

Indian independence also led to a major change in the direction of economic policy. From a globalized economy integrated into the British Empire, the next 30 years saw a retreat from policies of free trade and capital flows. The newly independent state embraced the idea of development through industrialization.

In an economy, where capital was scarce and entrepreneurship was concentrated in a few communities, the state stepped in to fill the gap.

India was not unusual in this. Many parts of the underdeveloped world, both colonies in Asia and independent countries in Latin America moved towards protectionist policies to develop an industrial sector. This was not simply the infant industry argument, which had characterized industrialization in the United States and Europe 19th century.

The role of the state in the newly independent countries, in the second half of the 20th century, was developmental and directly interventionist. While the industrialized world in Europe and North America began to rebuild the institutions of free trade after 1945, the underdeveloped world moved in a different direction, where the idea of a “Developmental State” became an intrinsic part of policy making. 

This paper will take a long run view of Indian economic development. I will start with Mughal India under the emperor Akbar in 1600. This was the high point of economic prosperity measured by average living standards. I will look at the changes in the economy over the next 400 years, first in response to increasing trade with Europe through the global network of European trading companies, then through the formal political rule of the East India Company and the British Crown and finally the new phase of development after independence.

As the title suggests, I will argue that there is a story of falling behind over a long period in which Indian GDP per capita declined or stagnated, a trend only to be reversed after independence. The falling behind coincided with integration into the global economy, while the foundations for catching up were set as India moved away from globalization. The periodization touches on the broader theme of the effect of colonization.

However, this paper is not a contribution to the theoretical literature on colonial underdevelopment. It will put together quantitative evidence on indicators of living standards and economic growth and assess the causes of the long run decline and the factors that led a reversal of fortune in this important Asian economy. I will argue: 

1. Trade was not a driver of fortunes in colonial India. Rising trade with Europe coincided with declining living standards. It coincided with deindustrialization in the face of rising imports of industrial goods from Britain and specialization in agricultural products under colonization, but neither can explain the falling behind.
2. Underinvestment in agriculture led to stagnation in productivity. This was the main failure of the colonial government and can explain why this colonial economy fell behind.
3. Traditional industries, particularly textiles declined. Modern industries developed partly as a result of British investment in sectors like tea and jute, but also through the initiative of Indian trading networks, who set up the modern cotton textile industry. Many traditional industries reinvented their organization and borrowed some types of European technology. Industrial development in colonial India was comparable to other peripheral countries. Planning for industrialization in independent India wiped out to a large extent the colonial legacy as it set up industries producing intermediate and capital goods under public ownership.
4. In 1947 less than one- fifth of the Indian population had basic literacy. Although literacy had risen in the first half of the 20th century, India’s primary school enrollment was one of the lowest in the world. At the same time, the relative share of secondary education was high. Failure to prioritize primary education had long term consequences. India’s recent growth led by the service sector has relied on the large pool of workers with secondary and tertiary education, but the industrial sector still has a high share of workers with low human capital.
5. The post-independence years saw technological change in agriculture and planned industrialization and these interventions moved the economy from stagnation to modern economic growth. The slow growth in the post-independence decades is a relative failure in the context of the rapid growth in East Asia, but a reversal in the context of the long run trend during colonial rule. […]

(All images courtesy of Wikimedia Commons)