Downloaded by [The University of Warwick] at 07:17 02 September 2016 Downloaded by [The University of Warwick] at 07:17 02 September 2016 A NEW ECONOMIC HISTORY OF COLONIAL INDIA A New Economic History of Colonial India provides a new perspective on Indian economic history Using economic theory and quantitative methods, it shows how the discipline is being redefined and how new scholarship on India is beginning to embrace and make use of concepts from the larger field of global economic history and economics The book discusses the impact of property rights, the standard of living, the labour market and the aftermath of the Partition It also addresses how education and work changed, and provides a rethinking of traditional topics including deindustrialization, industrialization, railways, balance of payments and the East India Company Writing in an accessible way, the contributors – all leading experts in their fields – firmly place Indian history in the context of world history An up-to-date critical survey and novel resource on Indian Economic History, this book will be useful for undergraduate and postgraduate courses on Economic History, Indian and South Asian Studies, Economics and Comparative and Global History Latika Chaudhary is Associate Professor of Economics in the Graduate School of Business and Public Policy at the Naval Postgraduate School, USA Bishnupriya Gupta is Associate Professor of Economics at the University of Warwick, UK Tirthankar Roy is Professor of Economic History at the London School of Economics, UK Anand V Swamy is Professor of Economics at Williams College in Massachusetts,  USA Downloaded by [The University of Warwick] at 07:17 02 September 2016 This page intentionally left blank Downloaded by [The University of Warwick] at 07:17 02 September 2016 A NEW ECONOMIC HISTORY OF COLONIAL INDIA Edited by Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy and Anand V. Swamy First published 2016 by Routledge Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business Downloaded by [The University of Warwick] at 07:17 02 September 2016 © 2016 selection and editorial material, Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy and Anand V Swamy; individual chapters, the contributors The right of Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy and Anand V Swamy to be identified as author of the editorial material, and of the individual authors as authors of their contributions, has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A new economic history of colonial India / Edited by Latika Chaudhary,   Bishnupriya Gupta, Tirthankar Roy and Anand V Swamy   pages cm  1. India—Economic conditions.  2. India—Social conditions.  3. Business—India—History.  4. Economic history.  I. Chaudhary, Latika, editor.  II.  Gupta, Bishnupriya, editor.  III.  Roy, Tirthankar   HC433.N49 2016  330.954'035—dc23  2015008638 ISBN: 978-1-138-77971-6 (hbk) ISBN: 978-1-138-77972-3 (pbk) ISBN: 978-1-315-77108-3 (ebk) Typeset in Bembo by Apex CoVantage, LLC Downloaded by [The University of Warwick] at 07:17 02 September 2016 CONTENTS List of figures vii List of tables ix List of boxes xi xii Notes on contributors Acknowledgmentsxiv  1 Introduction Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy and Anand V Swamy   Indian economic performance and living standards: 1600–2000 Stephen Broadberry and Bishnupriya Gupta 15   3 The colonial transition and the decline of the East India Company, c 1746–1784 Santhi Hejeebu 33   4 The myth and reality of deindustrialisation in early modern India Indrajit Ray 52   The rise of modern industry in colonial India Bishnupriya Gupta 67   Colonial India and the world economy, c 1850–1940 Gopalan Balachandran 84 Downloaded by [The University of Warwick] at 07:17 02 September 2016 vi Contents   Agriculture in colonial India Latika Chaudhary, Bishnupriya Gupta, Tirthankar Roy, and Anand V Swamy 100   The long-run consequences of colonial institutions Lakshmi Iyer 117   Railways in colonial India: an economic achievement? Dan Bogart and Latika Chaudhary 140 10 Caste, colonialism and schooling: education in British India Latika Chaudhary 161 11 The growth of a labour market in the twentieth century Tirthankar Roy 179 12 Industrial labour in late colonial India Susan Wolcott 195 13 Law and contract enforcement in colonial India Anand V Swamy 218 14 The partition and its aftermath: empirical investigations Prashant Bharadwaj and Kevin Quirolo 233 Index257 Downloaded by [The University of Warwick] at 07:17 02 September 2016 FIGURES 2.1   Indian GDP per capita, 1900–2000 (Rs at 1948–1949 prices) 3.1   Average years of service by departure year, 1730–1773 5.1   Changes in employment in large-scale manufacturing industry (thousands), 1900–1901 to 1946–47 5.2   Changes in output in large-scale manufacturing industry (million rupees in 1938–1938 prices), 1900–1901 to 1946–1947  8.1A India railway map 2009 8.1B  India railway map 1909 8.2   Property rights protection and income per capita (cross-country relationship) 8.3   Geographic distribution of colonial land tenure systems in India 8.4   Rice yields (tons per hectare) in Madura and Tanjore 8.5A  Wheat yields across Uttar Pradesh districts in the 1870s 8.5B Wheat yields across Uttar Pradesh districts in 1987 8.6   Non-landlord areas invest more in irrigation and fertilizer after 1965 8.7   Geographical distribution of Native States in India 9.1   Map of railways in 1870 9.2   Map of railways in 1909 9.3   Map of railways in 1931 9.4   Total route miles, 1854–1947 9.5   Capital per mile (1873 rupees) 9.6   Labour per 1,000 miles 9.7   Passenger and freight traffic 9.8   Real passenger and freight rates  9.9  Working expenses and gross earnings 9.10  Net earnings, GOI bond yields and guarantees 26 44 78 79 120 121 123 125 126 126 127 128 131 142 143 144 145 148 149 150 151 152 154 Downloaded by [The University of Warwick] at 07:17 02 September 2016 viii Figures 12.1 Male Konkan field labour wages (Rs per month of 26 days) and male wages in the Assam tea gardens (Rs per month), 1900–1938 206 12.2 Monthly male wages (Rs.) of Bombay cotton textiles, jute textiles, and Jharia coal miners, 1900–1938, and TISCO 1912–1938 206 12.3 Jute and cotton mill wages relative to agricultural wages, 1900–1938207 12.4 Coal mining Panel A: coal mine employment vs value of coal per labourer at 1938 prices, 1900–1938 Panel B: coal margin vs wage 208 premium, 1900–1938 12.5 TISCO Panel A: TISCO employment vs net value added per labourer at 1938 prices Panel B: TISCO margin vs wage 209 premium, 1920–1938 12.6 Jute textiles Panel A: Jute employment vs net value added per labourer at 1938 prices, 1900–1938 Panel B: Jute Mill margin 210 vs wage premium, 1900–1938 12.7 Cotton textiles Panel A: Cotton employment vs net value added per labourer at 1938 prices, 1900–1938 Panel B: 211 cotton mill margin vs wage premium, 1900–1938 14.1 Inflows of population into India, Pakistan, and Bangladesh 238 14.2 Outflow of population from India, Pakistan, and Bangladesh 241 14.3 Difference in literacy between migrants and residents 243 14.4 Share of migrants minus share of residents engaged in agriculture  246 14.5 The price of raw jute in Calcutta 249 Downloaded by [The University of Warwick] at 07:17 02 September 2016 TABLES 2.1  Indian silver and grain wages, 1595–1874 18 2.2  An Anglo-Indian comparison of the daily wages of unskilled labourers, 1550–1849 19 2.3  Real wages of Indian unskilled labourers, 1600–1871 (1871 = 100) 22 2.4  Real wages of Indian workers, 1871–1981 (1871 = 100) 23 2.5  Indian real GDP by sector, 1600–1871 (1871 = 100) 24 2.6  Comparative India/GB GDP per capita, 1600–1871 25 2.7  Indian real national income growth (% per year) 26 2.8  Average annual growth rates of Indian output per employee, 1872–2000 (% per year) 27 2.9  Comparative India/UK labour productivity by sector, 1871–2000 (UK = 100) 28 2.10 Indian labour force by sector, 1875–2000 (%) 29 4.1  Change in annual employment in industry in Bengal, 1795–1859 63 5.1  Dominant source of capital and entrepreneurship by industry (1914) 69 7.1  Agriculture acreage summary 104 7.2  Area under irrigation 105 7.3  Average annual growth rates of GDP by sector of origin, 1865–2007106 7.4  Irrigation expenditures under GOI budget 110 8.1  Historical land tenure, access to public goods and human development outcomes 129 8.2  Indirect colonial rule, public goods and development outcomes  133 8.3  The Doctrine of Lapse, public goods and human development outcomes135 8.4  What if ‘lapse’ did not lead to direct colonial rule? 135 8.5  Indirect colonial rule, public goods and development outcomes in earlier periods 136 ... is available from the British Library Library of Congress Cataloging-in-Publication Data A new economic history of colonial India / Edited by Latika Chaudhary,   Bishnupriya Gupta, Tirthankar... in colonial India: an economic achievement? Dan Bogart and Latika Chaudhary 140 10 Caste, colonialism and schooling: education in British India Latika Chaudhary 161 11 The growth of a labour... that a region scarce in capital but abundant in land should see manufacturing retreat and agriculture expand as costs of conducting trade falls In colonial India there was a retreat of manufacturing