Short notes on Industrialization and Town and country


(a) Industrialization:

The twentieth century in its first half witnessed a certain degree of industrialization, but there was no industrial revolution, nor any economic break-through despite an appreciable growth of large-scale industry before 1947.

Historians have differed on why there was no ‘take-off. The Marxist economist Amiya Kumar Baagchi, in Private Investment in India 1900 – 1939 (Cambridge, 1972), and the non- Marxist historian, Rajat K. Ray, in Industrialization in India: Growth and Conflict in the Private Corporate Sector 1914 -1947 (New Delhi, 1979) both argued that colonial policies were responsible for this.


Morris D. Morris, an American economic historian of note, argues, on the contrary, in his contribution to the second volume of the Cambridge Economic History of India (1983), that the technological backwardness of the Indian economic structure blocked the sustained growth of investment in large-scale industry.

Subsequently B.R. Tomlinson, a historian who hardly took a side in the dispute, nevertheless observed, in his The Economy of Modern India 1860 -1970 (New Cambridge History of India, Vol III, Cambridge, 1993), that ‘a ruthless insistence by government on strategic priorities limited the expansion’ of Indian industry during the Second World War, when there were new opportunities.

By then, there was a large Indian capitalist class locked in a struggle with European capital in India. Its growth, and internal tensions, is studied in Claude Markovitz, Indian Business and Nationalist Politics 1931-1939. By common consent, the explanation of backwardness is no longer sought in social values and customs. The political factor in economic backwardness or growth is still a matter of dispute.

(b) Town and country :


The beginnings of modern Indian business enterprise in the early 19th century have been traced by Blair B. Kling in Partnership in Empire: Dwarkanath Tagore and the Age of Enterprise in Eastern India (Berkeley, 1976), and by Asiya Siddiqui in ‘The Business World of Jamsetjee Jeejeebhoy'( Indian Economic and Social History Review, vol 21, 1982).

Private European enterprise in the colonial port cities of the nineteenth century has been sketched in Amales Tripahi, Trade and Finance in the Bengal Presidency 1793-1833 (Calcutta, 1979) and, for the subsequent period, when managing agency houses became dominant, in Radhe Shyam Rungta, The Rise of Business Corporations in India 1851- 1900 (Cambridge, 1970).

Big Indian enterprise on the model of Dwarkantah Tagore and Jamsetjee Jeejeebhoy suffered a setback in the colonial port cities as European capital became gradually monopolistic, but as C.A. Bayly has shown in an influential work entitled Rulers, Townsmen and Bazaars: North Indian Society in the Age of British Expansion 1770 – 1870 (Cambridge, 1983), Indian traders fared better in the inland markets by adjusting to colonial rule Essays by several historians regarding the colonial impact upon the Indian economy are collected together in K.N. Chaudhuri and C.J. Dewey.), Economy ;and Society and C.J. Dewey and A.G. Hopkins .

The Imperial Impact: Studies in the Economic History of India and Africa. Some of these essays presented new conclusions, especially on markets, industrial policy, and agrarian society. Many regional economic histories have appeared over time, two well-known works being N.K. Sinha, The Economic History of Bengal,. (Calcutta, 1965, 1970) and C.J. Baker, An Indian Rural Economy: the Tamil Nad Countryside 1880-1950 (New Delhi, 1984). There is also one micro-history of economic and social change in a single Punjab Village over time by Tom Kessinger, entitled Vilayatpur 1848 – 1968: Social and Economic Change in a North Indian Village).


The biggest British investments in the Indian economy, designed for imperial rather than national benefit, were in railways and canals. These investments did not bring about the sort of industrial growth witnessed in Germany, Russia and Japan in the nineteenth century, and hardly improved per acre agricultural productivity over the land as a whole.

There were harmful ecological side effects, and famines continued to visit the rural population time and again. These themes are explored in Danial Thorner, Investment in Empire (Philadelphia, 1950); Daniel Thorner. ‘Great Britain and the Economic Development of India’s Railways’, Journal of Economic History, Elizabeth Whitcombe, Agrarian Conditions in Northern India: the United Provinces under British Rule, 1660 – 1900 (Berkeley, 1972); and Amartya Sen, Poverty and Famines: an Essay on Entitlement and Deprivation (International Labour Organisation, 1981), a brilliant essay by the Nobel Laureate economist showing that famines could occur because of adverse movements in prices and wages even when the food stocks were available.

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