OPINION

End Of The Raj (4): "The Legacy" And The Reality Check
May 01, 2006
madhukar

The other day, someone pointed out to me how "India's share of global trade" had declined from almost 2.5-3% to less than a percent during 1947 to 1991.

The obvious conclusion was that during this 'socialist' era, India had become insulated and lost opportunities to "grow" globally.

One can, however, so easily get deceived by numbers. And so, it took some time to point out the contextual meaning of this decline in numbers... And that, the decline in numbers actually represented a maturing Indian industry and economy, viz:

  • India hardly had any large-scale industry in 1947, which could process the raw-material into finished usable goods. There were a few industries in the cotton, jute, sugar, matches, and steel sectors, etc. - but they were too few to really service the country's needs. About 65-70% of India's less-than-Rs.600cr export consisted of raw material (cotton, oilseeds, minerals and ores, tobacco, etc.); around the same proportion of its imports were finished goods (ranging from biscuits, sewing needles, cloth etc., to dress-material, medicines to machines-tools). In fact, even in 1950, India was importing 90% of its requirement of machine tools... naturally, India's "share of global trade" was high!

    • It also occurred to me that apparently many of us look at India-1947 from the lenses we wear in India-21stCentury.

    ...which prompted me to create this random dhobi (laundry) list of the Legacy of the Raj, or what India was like around that time (the data is from various sources from 1940 to 1950)... besides what was mentioned in the earlier post in this series:

  • India had 30crore (300mn) population, with an average longevity of 32 years (with between 17.5 to 19.0% infantile mortality)

  • There were just 360,000 income-tax payers in 1947

  • Only 15% of Indians were literate (literacy rate among women was 9%)

  • 83% of Indians lived in villages, and 70% depended on agriculture... 28% were landless labourers (this, as one would notice, has not changed much)

  • 70% of cultivated land was owned by a handful of zamindars and money-lenders.

  • Only 3% of India's workforce (less than 9mn) was employed in manufacturing sector.

  • Jute and cotton industry accounted for 30% of the total industrial employment (and about 55% of value-added to manufacturing)

  • Indian farmers owned 0.9mn iron plough, and 31.3mn wooden plough.

  • Across the total population, even in 1950-51, there were just about 168,000 telephones.

  • Only 27% of cultivated land was irrigated.

  • In 1951, there were just 37,000 towns and villages (out of around 5,000 cities and 500,000 villages) with electricity

  • There were 9 agricultural colleges with around 3,000 students.

  • There were just 10 medical colleges that turned out about 700 doctors every years. In 1951 census, India had about 18,000 doctors... We also had 1,900 hospitals and 6,500 dispensaries, accounting for around 1.2lac (.12mn beds) - for a population of 300mn.

  • There were a total of 7 engineering colleges, with around 2,200 students.

  • In 1950, India produced 7 locomotives, 1mn tons of steel, 99,000 bicycles, 33mn tons of coal, 2.7mn tons of cement, 33,000 sewing machines,

  • India had a total number of 27 universities/colleges in 1950.

  • The total number of enrollment of students from primary to pre-degree education, in 1950-51, was less than 25mn.

  • There were around 6,500 newspapers and periodicals (nationals and vernacular) and 26 radio centers.

  • Even as late as 1955, India had just about 790,000 engineering degree/diploma holders.

  • There were a total of 1125 companies listed on the stock exchange (there were only two of them - Bombay and Calcutta)

    Needless to say, India has come a long way since then--from a country dependent on food-aid (the US PL480 program), we have become a food-surplus country; from an illiterate country, India now has the 2nd or 3rd largest technically qualified manpower; from a land owned by landlords and princes, there is a greater democratization of wealth.

    Or so we tell ourselves.

    There are certain things that have still not changed, e.g.,:

  • In a food-surplus country, 5-7 farmers commit suicide every day

  • 60% of India's GDP is still created by its 93% "informal sector" - India's most "privatized" workforce (the farmers, slum-dwellers, hawkers, etc.), who slog to "subsidies" the life-styles of the more fortunate ones.

  • The top 10% of the society own 48% of India's assets, while the bottom 10% have access to just 1%.

    Perhaps the only way to reconcile these paradoxes is to believe that the history of a nation is not a fairy-tale (with clear-cut good-evil/right-wrong), but an epic across generations which unfolds in various shades of gray.


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    #1
    bevivek
    URL
    May 1, 2006
    10:49 PM

    Madhukar - Another interesting article. There's also often a gulf between the macro economic picture and the personal factoid. I am for industry's right to hire and fire it's staff. But I also have a relative nearing 50 and living in fear of being laid off with minimal compensation. Every month there are a few lay offs and it is only a question of time before the axe falls on him. His future is bleak.

    And of course the unorganized sector all around us who are neither recognized nor have the faintest safety net.

    #2
    GB
    URL
    May 2, 2006
    01:20 AM

    engrossing read

    #3
    GB
    URL
    May 2, 2006
    01:21 AM

    engrossing read.
    could you clarify if the pre-1947 statistics include the entire commonwealth countries in south asia which constituted the then british indian empire, directly or indirectly?

    #4
    Madhukar
    URL
    May 2, 2006
    11:34 AM

    GB: mos of the statistics are from the 1951 census - not much data was available till then... but you are correct to point out that some of these - the pre-1947 ones - would include the larger British rule India. If I recall correctly, one such is about the Rs600cr import and export - that was a 1940 statistics.

    Vivek: am personally not sure if industry "should" have a "right" to hire/fire people. Will depend on whether one sees the industry to be a part of larger social fabric/society, or the society to be a input factor for the industry;)

    #5
    GB
    URL
    May 5, 2006
    05:15 AM

    I am told that even though much of present-day eastern India seems to be an economic dump compared to the other parts, it was the most industrialized region before the shifting of political centre from bihar+bengal to delhi and the formation of east pakistan which effectively broke the economic and political synergies from the other parts of India to South East Asia.

    #6
    GB
    URL
    May 5, 2006
    05:17 AM

    sometimes i get the logic that the split in the political structure south of the himalayas ,post-1947 was directly responsible for Tibet losing its independence. do you agree with this logic?

    #7
    Madhukar
    URL
    May 5, 2006
    09:08 AM

    GB: you are right about eastern india. It used to be the among the industrially most developed part of India - Bombay and Calcutta were the center of business. It was only in 70s that the center of gravity started shifting - partly, because the region was seen as business-unfriendly, and partly because their was a value-migration across industries...

    amnot sure about the Tibet point, but do know that independence of Tibet was always a point of contention with China... even in the early 1900s... sovereignity ofTibet was never accepted by China..

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