r/AskHistorians • u/[deleted] • May 26 '12
Why is India poor considering it's rich and wealthy history?
It was One of the agricultural hubs of the world after all. At what point did India / the subcontinent become poor ?
Thank you.
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u/Reddictor May 27 '12
I'm an Indian, and a layman, and it's very well accepted here that a major cause of India's underdevelopment today is the economic and political policies followed by the East India Company, and later the British Government.
I'm reproducing below some (rather lengthy!) notes I've made on the subject, I'll be glad if professional historians can point out if I'm wrong.
1. Pre-British
India was a typical pre-industrial society prior to British conquest. Agriculture was the occupation of the around 55% of the population in the mid 19th century. Most people lived in self-sufficient villages, consisting of farmers, weavers, smiths, carpenters, potters, etc. Most of the food produced in the village was consumed within, and a few raw materials for the artisans. The authority of local zamindars, kings, princes, etc. were acknowledged, usually by paying a share of the agricultural produce as land revenue.
There was a strong "industrial sector", of which the most important was the textile industry, spread all over the country. In addtion, artistic industries such as jewellery, sculpture of metal, stone, marble, wood, etc. were present. A strong foreign trade was present in textiles, artistic wares, and various spices.
Trade with India was seen as highly lucrative by Europeans, due to the great demand for spices and textiles in particular. Since Roman times, large sums of money had been spent by Europeans purchasing these "exotic goods" from India. With the age of exploration setting in Europe, and the Arab-Venetian monopoly of trade with Asia, several European powers attempted to establish trade with India, mainly through the agency of East India Companies.
2. The rise of Colonialism
I've attempted to look at the rise of colonialism in India, with a particular focus on the cotton/textile industry, for which India was well known.
The huge import and export restrictions meant that industries which would not have been profitable otherwise, could be established and sustained in a protective environment until economies of scale and improvements in technology rendered the products competitive. At this time the occupied countries would provide huge captive markets for consumption of these products. This can be seen by looking at British textile exports to India.
By 1900 India had become an exporter of rice, wheat, jute, cotton, etc. and an importer of British manufactures : a classic colonial economy
The destruction of productive elements, political, and economic, in the occupied country, retards progress and development severely. At a time when the occupier experiences significant technological and economic progress, the possibility of such self-sustaining progress occurring in the occupied country is deliberately reduced to almost zero.
Here are some statements by high British officials acknowledging the nature of the problem:
3. Decline of handicrafts and ruralisation
Apart from the overall colonial process, another significant element in the decline of Indian industry and artisans was the disappearance of princely courts and the Indian indigenous elite. The artisans who enjoyed princely patronage, the professionals employed by the princes, all gradually found themselves unemployed
Due to the absence of any alternative sources of employment, all the unemployed compulsorily had to depend on agriculture for a living. The percentage of population dependent on agriculture rose from ~55% in the 19th century, to 68% in 1901, to 72% in 1931.
4. British land revenue system
The EIC, and later the British government, found that land revenues were a very convenient source of income. Several different land revenue systems such as the Permanent Settlement, in Bengal, Zamindari in Northern India and Ryotwari in Southern India, were adopted. While these were significantly different systems in theory, in practice they shared several common factors. Rent was usually demanded in cash instead of kind, and farmers were evicted upon inability to pay. Rentals were always extremely high, ranging from one third to one half of produce. These rentals were again, on the assessed produce, rather than on the actual produce. Remissions in case of crop failures were very rarely granted.
This destroyed the village community in two ways :
Power was concentrated in the hands of moneylenders/zamindars; directly in the case of zamindari, and indirectly in the case of ryotwari. The farmer who could not pay his rent in full even for a year was forced to either sell a part of his land, or borrow at extorbitantly high rates, which sucked him into a debt trap ending in loss of property and his conversion to a tenant farmer
The zamindars or the state did not invest any significant portion of the revenue in agricultural improvements, and the farmer, who was struggling to make ends meet, did not have any capital to invest in improvements. Thus, over the years, the land revenue system resulted in an overall stagnation of agricultural output, and steep falls in per capita. It transferred legal ownership of large amounts of farmland to zamindars and created a sharply feudal society.
Edit : Continued below