The economic history of India is the Indian evolutionary tale of a largely agricultural society and trade to a mixed economy of manufacturing and services while the majority still survive in agriculture. Prior to 1947 it included the economics of the Indian subcontinent, which deals with the modern states of India, Pakistan, Nepal, Sri Lanka and Bangladesh.
This history begins with the Indus Valley Civilization (3300-1300 BC), whose economy appears to have relied heavily on trade. Around 600 BC, Mahajanapadas scored a silver coin marked blow. Periods are characterized by intensive trading and urban development activities. By 300 BC, the Mauryan Empire had united most of the Indian subcontinent. The resulting military political and security union allows for a common economic system and increases trade and trade, with increased agricultural productivity.
The Mauryan Empire was followed by the classical and early medieval kingdoms, including Chola, Gupta, West Ganga, Harsha, Palas, Rashtrakutas and Hoysalas. During this period, between 1 CE and 1000 CE, the Indian subcontinent is estimated to account for one third, a quarter of the world's population, and products, even though per capita GDP is stagnant. India experienced GDP growth per capita in the medieval era after 1000, during the Delhi Sultanate, but not as productive as the 15th century Ming China. After much of the continent reunited under the Mughal Empire, the empire became the largest economy in 1700, generating about a quarter of global GDP, before being fragmented, and conquered during this century. According to the Balance of Economic Power, India has the largest and most developed economy for most intervals between the 1st and 18th centuries, most of the region for most of the past two millennia.
During the Mughal Empire, India was a world leader in manufacturing, generating 25% of the world's industrial output until the mid-18th century, before British rule. Because of its ancient history as a trade zone and then its colonial status, the colonial India remains integrated economically with the world, with high levels of trade, investment and migration. India was deindustrialized under British rule, which along with rapid economic growth and population in the Western World resulted in India's share of the world economy declining from 24.4% in 1700 to 4.2% in 1950, and the share of global industrial output declined from 25 % at 1750 to 2% in 1900.
The Republic of India, founded in 1947, adopted central planning for much of its independent history, with extensive public ownership, regulation, red tape and trade barriers. After the economic crisis of 1991, the central government launched economic liberalization, enabling it to emerge as one of the fastest growing fastest economies in the world.
Video Economic history of India
Indus Valley Civilization
Indus Valley civilization, the permanent settlement and most of the city's first known population, flourished between 3500 BC and 1800 BC. It features an advanced and growing economic system. Its inhabitants practice farming, pets, making sharp tools and weapons of copper, bronze and tin and trading with other cities. The evidence of neat streets, layouts, drainage systems and water supplies in the major valley cities, Dholavira, Harappa, Lothal, Mohenjo-daro and Rakhigarhi reveal their knowledge of urban planning.
Maps Economic history of India
Ancient and medieval characteristics
Although ancient India had significant urban populations, many Indians live in villages, whose economies are largely isolated and self-sustaining. Agriculture is a dominant occupation and meets the needs of village food while providing raw materials for hand-based industries such as textiles, food processing and handicrafts. In addition to farmers, people work as barber, carpenters, doctors (Ayurvedic practitioners), goldsmiths and weavers.
Religion
Religion plays an influential role in shaping economic activity.
The pilgrim towns such as Allahabad, Benares, Nasik and Puri, mostly centered around the river, developed into a trading and trading center. Religious functions, festivals and pilgrimage practices result in early versions of the hospitality industry.
Economics in Jainism is influenced by Mahavira and his philosophy. He is the last of 24 Tirthankars, who spread Jainism. With regard to economics he explains the importance of the concept of 'anecanta' (non-absolutism).
Family business
In a joint family system, family members gather their resources to nurture families and invest in business ventures. This system ensures younger members are trained and employed and that older and disabled people will be supported by their families. This system prevents farmland from splitting with each generation, helping the outcome of scale benefits. Such sanctions contain the spirit of rivalry in junior members and instill a sense of compliance.
Organizational entity
Together with family businesses and individual property, ancient India had other forms involved in collective activity, including gana, pani, puga, vrata, sangha, nigama and sreni. Nigama, pani and sreni most often refer to the economic organization of merchants, craftsmen and craftsmen, and possibly even para-military entities. In particular, Sreni shares many similarities with modern companies, which were used in India from around the 8th century BC to about the 10th century. The use of such entities in ancient India was widespread, including in almost every type of business, political activity and the city.
Sreni is a separate legal entity that has the ability to own property separately from its owner, builds its own rules to govern the behavior of its members and to contract, sue and sue in its own name. Ancient sources such as Laws of Manu VIII and Chanakya's Arthashastra provide rules for lawsuits between two or more sreni and several sources referring to government officials ( Bhandagarika i) who worked as an arbiter for dispute between sreni at least since the 6th century BC. Between 18 and 150 sreni at various times in ancient India include trade and craft activities. This level of specialization is an indication of an advanced economy in which sreni plays an important role. Some sreni have more than 1,000 members.
Sreni has a substantial centralized management level. The tribal chief sreni represents the interests of sreni at the royal palace and in many business dealings. The village head can bind sreni in contracts, regulate working conditions, often receive higher compensation and is an administrative authority. The village head is often elected by election by members of the sreni, and may also be removed from power by the general assembly. The village head often runs a company with two to five executive officers, also elected by the assembly.
Coinage
The blow marked silver ingot circulated around the 5th century BC. They were the first metal coins printed around the 6th century BC by the Mahajanapadas of the Ganges plain and are the earliest traces of coins in India. While many kingdoms and Indian rulers issue coins, barter is still very prevalent. Villages pay some of their crops as income while their craftsmen receive a salary from the harvest for their services. Each village is largely independent.
Maurya Empire
During the Mauryan Empire (ca. 321-185 BC), major changes and developments influenced the Indian economy. This is the first time that most of India is united under one ruler. With a kingdom in place, trade routes become safer. The Empire spent a lot of resources to build and maintain roads. Improved infrastructure, combined with increased security, uniformity in measurement, and increased use of coins as currency, increased trade.
Delhi Sultanate
Before and during the Sultanate of Delhi (1206-1526 CE), Islam underlies cosmopolitan civilization. It offers an extensive international network, including social and economic networks. They stretched mostly Afro-Eurasian, leading to an increase in the circulation of goods, people, technology and ideas. Although initially disturbing, the Delhi Sultanate was responsible for integrating the Indian subcontinent into a thriving world system.
India's per capita GDP is lower than the Middle East from 1 CE (16% lower) to 1000 CE (about 40% lower), but at the end of the Delhi Sultanate era in 1500, India's GDP per capita approached that from the Middle East.
GDP estimate
According to the economic historian Angus Maddison in the contours of the world economy, 1-2030 CE: essays in macroeconomic history, India has the largest economy in the world from 1 CE to 1000 CE. However, productivity did not grow during that period. Between 1000 and 1500, in the high medieval era (during the Delhi Sultanate), India began to experience GDP growth, but slower than East Asia, which surpassed India to become the most productive region in the world. Ming China and India remain the largest economies up to 1600. India experienced the fastest economic growth under the Mughal Empire, during the 16-18th centuries, raising the Mughal India over Qing China in 1700.
Mughal Empire
The Indian Mughal Economy (1526-1858) prospered in the early 18th century. Parthasarathi estimates that 28,000 tonnes of bars (mainly from the New World) flowed into the Indian subcontinent between 1600 and 1800, equivalent to 20% of world production in that period.
The estimated annual revenues of the Great Emperor Akbar's treasury, in 1600, was £ 17.5 million (in contrast to taxes taken from England two hundred years later, in 1800, amounting to £ 16 million). The South Asian region, in 1600, is thought to be the second largest in the world, behind China.
At the end of the 17th century, the Mughal Empire was at its peak and has expanded to cover almost 90 percent of South Asia. This imposed uniform customs and tax administration system. In 1700, the treasurer of Emperor Aurangzeb reported annual revenues of more than Ã, Â £ 100 million, or $ 450 million, more than ten times that of his contemporary Louis XIV in France, while controlling only 7 times the population.
In 1700, Mughal India has become the largest economy in the world, in front of China Qing and Western Europe, containing about 23% of the world's population, and generating about a quarter of the world's output. Mughal India generates about 25% of global industrial output into the early 18th century. India's GDP growth increased under the Mughal Empire, exceeding growth in the previous 1,500 years. The Mughal is responsible for building a vast road system, creating a uniform currency, and the unification of the state. Mughal adopted and standardized the rupee currency introduced by Sur Sur Sur Sherman Sher Shah. Mughal scored tens of millions of coins, with a purity of at least 96%, without degrading to the 1720s. This empire meets the global demand for Indian agricultural and industrial products.
The cities and towns thrived under the Mughal Empire, which had relatively high levels of urbanization (15% of the population lived in urban centers), more urban than that of Europe at the time and British India in the 19th century. Some cities have a population of between a quarter million and a half million people, while some include Agra (in Agra Subah) which holds up to 800,000 people and Dhaka (in Bengal Subah) with more than 1 million. 64% of the workforce is in the primary sector (including agriculture), while 36% are in the secondary and tertiary sectors. Labor has a higher percentage in the non-primary sector than in Europe at the time; in 1700, 65-90% of European labor was in agriculture, and in 1750, 65-75% were in agriculture.
Agriculture
Indian agricultural production is on the rise. Food crops include wheat, rice, and barley, while non-food crops include cotton, tilapia and opium. In the mid-17th century, Indian farmers began extensively planting two crops from America, maize and tobacco. Bengali farmers learn mulberry cultivation techniques and sericulture, building Bengal Subah as a large silk producing area. Advanced agriculture compared to Europe, exemplified by the use of drill seeds in general. The Mughal government emphasized the agrarian reform, which began under the non-Mughal emperor, Sher Shah Suri. Akbar adopted this and added more reforms. The Mughal government is funding the construction of an irrigation system, which produces much higher yields and harvests.
One of the reforms introduced by Akbar is a new land income system called zabt . It replaces the tribute system with a monetary tax system based on a uniform currency. The revenue-earning system supports high value crops such as cotton, tilapia, sugar cane, tree crops, and opium, providing state incentives to grow commercial crops, adding to market demand. Under the zabt system, Mughal conducted an extensive cadastral survey to assess the area cultivated. The Mughal state encourages the cultivation of larger lands by offering tax-free periods for those who bring new land under cultivation.
According to the evidence cited by economic historians Immanuel Wallerstein, Irfan Habib, Percival Spear, and Ashok Desai, per capita agricultural yields and consumption standards in the 17th century Mughal India are higher than those in seventeenth-century Europe and early India of the twentieth century, 20 India.
Manufacturing
Until the 18th century, Mughal India was the most important manufacturing center for international trade. Major industries include textiles, shipbuilding and steel. Processed products include cotton textiles, yarns, yarns, silks, hemp products, metalware, and foods like sugar, oil and butter. This manufacturing growth has been referred to as a form of proto-industrialization, similar to Western Europe in the 18th century before the Industrial Revolution.
Early modern European import products from Mughal India, especially cotton textiles, spices, chili, indigo, silk, and belching (for use in ammunition). European fashion, for example, is becoming increasingly dependent on Indian textiles and silks. From the late 17th century to the beginning of the 18th century, the Mughal India accounted for 95% of UK imports from Asia, and the Province of Bengal Subah alone accounted for 40% of Dutch imports from Asia. In contrast, demand for European goods in India's Mughal is light. Exports are limited to some wool, unrefined metal and some luxury goods. The trade imbalance caused Europeans to export large quantities of gold and silver to the Indian Mughal to pay for South Asian imports. Indian goods, especially those from Bengal, are also exported in large quantities to other Asian markets, such as Indonesia and Japan.
The largest manufacturing industry is manufacturing cotton textiles, which include the production of piece goods, calico and muslins, available unbleached in various colors. The cotton textile industry is responsible for most of the imperial international trade. The most important cotton production center is the province of Bengal Subah, particularly around Dhaka. Bengali itself has more than 50% of textiles and about 80% of silk imported by the Netherlands. Bengali silk and cotton textiles are exported in large quantities to Europe, Indonesia and Japan.
Mughal India has a large shipbuilding industry, especially in the province of Bengal Subah. Annual shipyard shipments of Bengal alone amounted to 2,232,500 tons, greater than the Dutch output (450,000-550,000 tons), Britain (340,000 tons), and North America (23,061 tons).
Bengal Change
Bengal Subah is the richest province in Mughal, producing 50% of Royal GDP and 12% of world GDP. It is globally dominant in industries such as textile manufacturing and shipbuilding. The capital of Bengal, Dhaka is the imperial financial capital, with a population of over one million. It is an exporter of textiles of silk and cotton, steel, belching and agricultural and industrial products.
In the country, much of India depends on Bengali products such as rice, silk and cotton textiles.
Mughal India had a higher per capita income by the end of the 16th century than British India in the early 20th century, and the secondary sector accounted for a higher percentage in the Mughal economy (18.2%) than the economies of the early 20th-century British India (11.2%).
Post Mughal Status
In the early half of the 18th century, the Mughal Empire fell into decline, with Delhi fired in the Nader Shah invasion of the Mughal Empire, the treasury emptied, tens of thousands of people killed, and thousands more carried, with their cattle, as slaves, weakening the empire and leading on the rise of post-Mughal states. The Mughal was replaced by Maratha as the dominant military force in much of India, while other smaller regional kingdoms predominantly Mughal tributaries, such as Nawabs to the north and Nizams to the south, declared autonomy. However, the efficient Mughal tax administration system remains largely intact, with Tapan Raychaudhuri estimating that actual earnings assessments increase to 50 percent or more, in contrast to China's 5 to 6 percent, to cover the cost of war. Similarly in the same period, Maddison provides the following for the distribution of late Mughal economic revenues:
Among the post-Mughal states that emerged in the 18th century, the dominant economic forces were the Bengal Subah (under the Nawabs of Bengal) and the Kingdom of South India Mysore (under Hyder Ali and Tipu Sultan). The first was devastated by the invasion of Maratha Bengal, which underwent six invasions, over a decade, claimed to have killed hundreds of thousands, and weakened the region's economy to the point Nawab of Bengal agreed to a peace treaty with Maratha. The agreement made Bengal Subah a tributary for Maratha, agreed to pay Rs. 1.2 million in tribute each year, as Chauth of Bengal and Bihar. Nawab of Bengal also paid Rs. 3.2 million for Maratha, towards the chauth arrears for previous years. Kauti was paid annually by Nawab of Bengal, until his defeat at the Battle of Plassey by the East India Company in 1757.
Sivramkrishna declares that the economy of the Mysore Empire then took over the power of Bengal, with real income five times higher than the subsistence level, which is five times higher than $ 400 (the 1990 international dollar), or $ 2,000 per capita. In comparison, Maddison estimates 1820 GDP per capita (PPP 1990 $) from the Netherlands at $ 1,838, and $ 1,706 for the UK.
Jeffrey G. Williamson argues that India experienced a period of deindustrialization in the second half of the 18th century as an indirect result of the collapse of the Mughal Empire, and that the British government later led to further deindustrialization. According to Williamson, the decline of the Mughal Empire reduced agricultural productivity, which pushed up food prices, then nominal wages, and then textile prices, which burdened India's textile market share to Britain even before the country developed factory technology, even though Indian textiles maintained a competitive advantage. more than English textiles until the 19th century. Prasannan Parthasarathi replied that some post-Mughal countries did not decline, especially Bengal and Mysore, which was comparable to England at the end of the 18th century.
English Rules
The British East India Company conquered Bengal Subah at the Battle of Plassey in 1757. After obtaining the right to collect revenues in Bengal in 1765, the East India Company ceased importing gold and silver, which until now was used to pay for the returned goods. to England. Moreover, as under Mughal rule, the income of land collected in the Bengal Presidency helped finance the war of Companies in other parts of India. As a result, in the period 1760-1800, the supply of Bengal's money was greatly reduced. The closure of some local candies and strict supervision of the rest, the setting of exchange rates and currency standardization added to the economic downturn.
During the period 1780-1860, India changed from exporters of processed goods paid with bullion to exporters of raw materials and buyers of manufactured goods. In the 1750s fine cotton and silk were exported from India to markets in Europe, Asia, and Africa, while in the second quarter of the 19th century, raw materials, consisting mainly of raw cotton, opium, and tilapia, accounted for the bulk of exports India. From the late 18th century, the British cotton factory industry began lobbying their governments to impose India's import tax and allow them access to markets in India. Beginning in the 1830s, British textiles began to emerge - and then flooded - the Indian market, with the value of textile imports growing from Ã, Â £ 5.2 million in 1850 to Ã, Â £ 18.4 million in 1896. Abolition of slavery prompting Caribbean plantations to regulate the imports of South Asian labor.
The British colonial government created an institutional environment that stabilized Indian society, while they hindered trade with other parts of the world. They created a well-developed railway system, telegraph, and modern legal system. This infrastructure is primarily directed at resource exploitation, leaving industrial development at a standstill and agriculture unable to feed the growing population. Indians are subjected to frequent starvation, have one of the lowest life expectancies in the world, suffer from widespread nutritional deficiencies and largely illiteracy.
The relative decrease in productivity
India accounted for 25% of the world's industrial output in 1750, down to 2% of the world's industrial output in 1900. Britain replaced India as the world's largest textile producer in the 19th century. In terms of urbanization, Mughal India has a higher percentage of its population (15%) living in urban centers in the 1600s than was done by British India in the 19th century.
Some economic historians claim that the 18th century real wages fall in India, and "well below European levels". This has been debated by others, who argue that the decline in real wages occurred in the early nineteenth century, or perhaps began in the late 18th century, largely as a result of the "power of globalization."
Clingingsmith and Williamson argued that India was industrialized, in the period between 1750 and 1860, for two very different causes, before reindustrialization. Between 1750 and 1810, they suggested the loss of Mughal hegemony enabled the new despotic rulers to hoard their conquered population, seeing that taxes and rental demand increased by up to 50% of production, compared with 5-6% extracted in China during that period, and partially collected great for funding regional wars. Combined with the use of labor and livestock for self-defense purposes, wheat and textile prices are encouraged, along with nominal wages, as populus seeks to meet demand, reduce the competitiveness of Indian handicrafts, and impact regional textile trade. Then from 1810 to 1860, the expansion of the British factory system reduced the relative price of textiles worldwide, through productivity progress, the enlarged trend in India as a concurrent transport revolution dramatically reduced transportation costs, and in a sub-continent had never seen roads- roads made of metal, the introduction of mechanical transport ever exposed to protected markets to global competition, hitting artisanal manufacturing, but stabilizing the agricultural sector.
Angus Maddison menyatakan:
... This is a severe blow to the makers of fine crochet, jewelry, fancy clothing and footwear, decorative swords and weapons. My own guess is that the home market for these items is about 5 percent of Moghul's national income and the export market for textiles is probably 1.5 percent more.
Amiya Bagchi estimates:
British East India Company Rules (1764-1857)
During this period, the East India Company initiated tax administration reforms in a rapidly expanding empire spread over 250 million hectares (1,000,000 km 2 ), or 35 percent of the Indian domain. The indirect rule was established in the state of protectorate and buffer.
Ray (2009) raises three fundamental questions about the 19th century cotton textile industry in Bengal: when did the industry begin to decompose, how extensive the damage was at the beginning of the nineteenth century, and what factors caused this? Since there is no data on production, Ray uses industrial market performance and raw material consumption. Ray challenged the prevailing belief that the permanent decline of industry began in the late 18th or early 19th century. The decline actually began in the mid-1820s. The pace of decline, however, was slow although stable at the beginning, but reached a crisis in 1860, when 563,000 workers lost their jobs. Ray estimates that the industry shrank by about 28% in 1850. However, it survives in high-end and low-end domestic markets. Ray agrees that Britain's discriminatory policy undoubtedly suppresses industrial exports, but suggests its decay is better explained by technological innovations in Britain.
Other historians point to colonialism as a major factor in the deindustrialization of India and the British Industrial Revolution. The capital, controlled from Bengal after the conquest of 1757, supported investments in British industry such as textile manufacture during the Industrial Revolution and increased British wealth, while contributing to deindustrialization and famine in Bengal; following the British conquest, famine erupted in Bengal in the early 1770s, killing a third of Bengalis and 5 per cent of the national population. Colonization forced a large Indian market to open onto British goods, which could be sold in India without tariff or duties, compared to local Indian manufacturers taxed. In Britain, protectionist policies such as high tariffs restrict Indian textile sales. In contrast, raw cotton is imported without tariffs to UK factories that produce textiles and sell them back to India. British economic policy gave them a monopoly over the massive market and the source of Indian cotton. India serves as a significant supplier of raw goods to British manufacturers and a large captive market for UK manufactured goods.
Indian textiles had maintained a competitive advantage over British textiles up to the 19th century, when Britain eventually replaced India as the world's largest producer of cotton textiles. In 1811, Bengal was still the largest exporter of cotton fabrics in America and the Indian Ocean. However, Bengali exports declined during the early 19th century, when British imports to Bengal increased, from 25% in 1811 to 93% in 1840. In 1820, India had fallen from the top rank to become the second largest economy in the world, at behind China.
The absence of industrialization
Historians question why India failed in industrialization in the 19th century. When the global cotton industry underwent a technological revolution in the 18th century, while Indian industry stagnated after adopting the Fly shuttle, and industrialization began only in the late 19th century. Some historians have argued that this is because India is still an agrarian country with low Commodity money wages, arguing that the nominal wages are high in the UK so that cotton producers have an incentive to create and buy expensive new labor-saving technologies, and that the wage rates low in India so manufacturers prefer to increase output by hiring more workers than investing in technology.
Economic historians such as Prasannan Parthasarathi have criticized this argument, showing earnings data showing real wages in Bengal and Mysore of the 18th century higher than in Britain. In contrast, Parthasarathi argues that Indian textile prices are lower because of lower Indian food prices, which are the result of higher agricultural productivity. Compared to the UK, the price of silver coins of wheat is about half in Mysore and a third in Bengal, resulting in lower silver coin prices for Indian textiles, giving them a price advantage in the global market. According to the evidence cited by Immanuel Wallerstein, Irfan Habib, Percival Spear and Ashok Desai, per-capita agricultural yields and consumption standards in the 17th century Indian Mughal are higher than those in seventeenth-century Europe and early India of the 20th century India.
Stephen Broadberry and Bishnupriya Gupta provide the following comparative estimates for the Indian and British populations and GDP per capita during 1600-1871 in terms of the 1990 international dollar.
However, Parthasarathi criticized per-capita GDP estimates from Broadberry and Gupta. Workers in the textile industry, for example, earn more in Bengal and Mysore than in Britain, while agricultural workers in Britain have to work longer to get the same amount as in Mysore. Others such as Andre Gunder Frank, Robert A. Denemark, Kenneth Pomeranz and Amiya Kumar Bagchi also criticized forecasts that show low per capita income and GDP growth rates in Asia (especially China and India) before the 19th century, leading to further research. which found per capita income and higher per capita growth rates in China and India during that period.
The economic historian Sashi Sivramkrishna estimates the average per capita income of Mysore by the end of the 18th century to be five times higher than subsistence, which is five times higher than $ 400 (the 1990 international dollar), or $ 2,000 per capita. By comparison, the highest national per capita income in 1820 was $ 1,838 for the Netherlands and $ 1,706 for the UK. According to the economic historian Paul Bairoch, India and China had a higher per capita GDP than Europe in 1750. For 1750, Bairoch estimated per capita GNP for the Western world to be $ 182 in 1960 US dollars ($ 804 in 1990 dollars) and for the non-Western world to $ 188 in 1960 dollars ($ 830 in dollars 1990), surpassed by China and India. Other estimates he gave included $ 150-190 for England in 1700 and $ 160-210 for India in 1800. Bairoch estimates that it is only after 1800 that West European per capita income is pulled forward.
British Raj (1858-1947)
The official dissolution of the Mughal dynasty touted a change in British medicine against the people of India. During the reign of British Raj, the large railway project began with earnest work and the government and retirement guarantee attracted a large number of upper caste Hindus to civil service for the first time. British cotton exports absorbed 55 percent of the Indian market in 1875. In the 1850s the first cotton mill opened in Bombay, posing a challenge to home-based home-based production systems based on family labor.
The Great Depression of 1929 had a small direct impact on traditional India, with a relatively small impact on the modern secondary sector. The government does not help much to ease the burden, and mostly focuses on sending gold to the UK. The worst consequence involves deflation, which increases the debt burden on the villagers. Total economic output did not decline between 1929 and 1934. The most severe sectors are hemp, based in Bengal, which is an important element in foreign trade; it has prospered in the 1920s but prices fell in the 1930s. Employment is also declining, while agriculture and small-scale industries show profits. The most successful new industry is sugar, which grew rapidly in the 1930s.
The newly independent but weak EU government treasury reported annual revenues of £ 334 million in 1950. In contrast, Nizam Asaf Jah VII of southern India was widely reported to possess a fortune of Ã, Â £ 668 million later. About one-sixth of the national population was in urban areas in 1950. The US dollar was exchanged for 4.79 rupees.
The fall of the rupee
- See also: The silver currency crisis and bank note (1750-1870)
After his victory in the Franco-Prussian War (1870-71), the Germans extracted large sums of France from £ 200 million, and then moved to join England with the gold monetary standard. France, USA, and other industrialized countries followed Germany in adopting gold in the 1870s. Countries like Japan that do not have the necessary access to gold or them, like India, are subject to imperial policies largely fixed on the standard of silver. Silver-based and gold-based economy then deviate dramatically. The worst is the silver economy that is traded primarily with the gold economy. Silver reserves grow larger, causing gold to rise in relative value. The impact on silver-based India is huge, given that most of its trade is with the UK and other gold-based countries. When the silver price falls, so does the rupee exchange rate, when measured against sterling.
Agriculture and industry
The Indian economy grew about 1% per year from 1880 to 1920, adjusting for population growth. The result is no change in income level. Agriculture is still dominant, with most farmers at the subsistence level. Extensive irrigation systems are built, providing incentives for growing crops for export and for raw materials for Indian industries, especially flax, cotton, sugar cane, coffee, and tea.
Entrepreneur Jamsetji Tata (1839-1904) started his industrial career in 1877 with the Central India Spinning, Weaving, and Manufacturing Company in Bombay. While other Indian factories produce cheap rough yarn (and then cloth) using locally short-staple cotton and simple machines imported from the UK, Tata performs much better by importing longer expensive cotton from Egypt and purchasing a more complex ring-spindle machine from America. Country to play fine threads that can compete with imports from the UK.
In the 1890s, Tata launched plans for expansion into heavy industry using Indian funding. Raj does not provide capital, but is aware of the declining British position against the US and Germany in the steel industry, he wants a steel mill in India so he promises to buy any excess Steel Tata can not be sold. The Steel and Steel Company (TISCO), led by his son Dorabji Tata (1859-1932), opened his factory at Jamshedpur in Bihar in 1908. Became a leading iron and steel producer in India, with 120,000 employees in 1945. TISCO became a symbol of skill technical India, managerial competence, entrepreneurial talent, and high pay for industrial workers.
Train
British investors built a modern rail system in the late 19th century - being the fourth largest in the world and renowned for its quality of construction and service. The government supports, realizes its value for military use and for economic growth. The train was originally private and operated, and run by a British administrator, engineer and skilled craftsman. At first, only unskilled workers were Indian.
A plan for the rail system was first advanced in 1832. The first train ran from Bukit Merah to the Chintadripet bridge in Madras, inaugurated in 1837. It was called the Red Hill Railway. It is used for transportation of goods. Some short lines were built in the 1830s and 1840s. They are not interconnected and used for the transportation of goods. The East India Company (and later the colonial government) encouraged new railway companies supported by private investors under a scheme that would provide land and guarantee a yearly return of up to five percent during the early years of operation. The companies built and operated those lines on a 99-year lease basis, with the government retaining the option to buy them early. In 1854 Governor-General Lord Dalhousie formulated a plan to build a network of stem lines connecting the main areas. A series of newly established railway companies, leading to rapid expansion.
In 1853, the first passenger train service was inaugurated between Bori Bunder in Bombay and Thane, which covered 34 km (21 mi). The mileage route from this network increased from 1,349 km (838 mi) in 1860 to 25,495 km (15,842 mi) in 1880 - mostly radiating to the mainland from the port cities of Bombay, Madras and Calcutta. Most of the railway construction is done by Indian firms supervised by British engineers. The system is solidly built. Several major prince countries built their own rail systems and networks spread throughout India. In 1900, India had various rail services with multiple ownership and management, operating on a wide, narrow gauge and network of gauges.
In the First World War, trains were used to transport troops and grains to Bombay and Karachi on their way to England, Mesopotamia, and East Africa. With the delivery of equipment and spare parts from the UK restricted, care becomes much more difficult; critical workers entering the army; workshops converted to make artillery; some locomotives and cars are shipped to the Middle East. Trains can barely meet increasing demand. By the end of the war, the railroads had deteriorated. In World War II, train trains were diverted to the Middle East, and the railroad shops were again converted into ammunition workshops. This is very crippling train.
Headrick argues that both Raj's lines and private companies employ only European supervisors, civil engineers and even operating personnel, such as locomotive engineers. The Government Shop policy requires that bidding on a railway contract be submitted to the Indian Office in London, closing most Indian companies. The railroad company buys most of its hardware and spare parts in the UK. Railway maintenance workshops exist in India, but are rarely allowed to produce or repair locomotives. TISCO first won orders for trains only in the 1920s. Christensen (1996) looks at colonial goals, local needs, capital, services and personal interests versus the public. He concluded that making railways dependent on the state impedes success, as the cost of trains must go through the same bureaucratic budgeting process as all other state expenditures do. The cost of a train can not respond to the needs of trains or passengers.
In 1951, forty-two separate rail systems, including thirty-two lines owned by previous Indian prince countries, were merged to form a unit called Indian Railway . The existing rail system was abandoned to support the zone in 1951 and a total of six zones appeared in 1952.
Economic impact of imperialism
The debate continues on the economic impact of British imperialism in India. This problem was first proposed by Edmund Burke who in 1780 strongly attacked the East India Company, claiming that Warren Hastings and other high officials had destroyed the Indian economy and society. Indian historian Rajat Kanta Ray (1998) continues this line of reasoning, saying that the British government in the 18th century took the form of plundering and was a disaster for the traditional economy. According to the economic drain theory, backed by Ray, Britain spends food, and stocks money and imposes high taxes that helped cause horrific famine of 1770, which killed one-third of the population of Bengal.
The British historian P. J. Marshall reinterpreted the view that the prosperity of the Mughal era gave way to poverty and anarchy, arguing that the British takeover was not sharp with the past. British control was largely delegated through regional rulers and was sustained by a generally prosperous economy until the 18th century, except for the frequent hunger. Marshall noted that the UK increased revenue through local tax administrators and maintained the old Mughal tax rate. Instead of Indian nationalist accounts of Britain as a foreign aggressor, seizing power with brute force and impoverishing the region, Marshall presents a British nationalist interpretation in which Britain is not in full control, but instead a controller in what is primarily India-runs society and where ability they to retain power depend on cooperation with the Indian elite. Marshall admits that many of his interpretations are rejected by many historians.
The Bank of England noted that India's reserve bank had a positive balance of £ 1160 million, with it, on July 14, 1947, and that British India maintained its trade surplus, with England, during Raj's rule for example.
Sumber: Indian sterling balance, p. 2, 15 Jan.1.1947, Bank of England (BoE), OV56/55.
Dampak British Raj terhadap produktivitas
Modern economic historians have blamed the colonial government for the bleak state of India's economy, with investment in India's industry limited because it is a colony. Under British rule, India's indigenous manufacturing industry shrank. During the reign of the British East India Company in India, crop production declined, massive poverty and farmer poverty and starvation. Raj's economic policy led to a severe decline in the handicraft and handloom sectors, with reduced demand and a decrease in employment; the output of the handloom industrial yarn, for example, decreased from 419 million pounds in 1850 to 240 million pounds in 1900. The result was a significant capital transfer from India to the United Kingdom, which led to a huge drain on income rather than any systematic attempt at the modernization of the Indian economy.
There is no doubt that our complaints against the British Empire have a solid foundation. As a painstaking statistical work from Cambridge historian Angus Maddison has pointed out, India's share of world revenues collapsed from 22.6% in 1700, almost equal to Europe's share of 23.3% at the time, to as low as 3.8% in 1952. Indeed, at the beginning of the 20th century, "the most brilliant gems in the United Kingdom" was the world's poorest country in terms of per capita income.
Republic of India
After India's independence adopted an economic model that inspired socialism with elements of capitalism. India adopted approaches such as the centralization and nationalization of the Soviet Union called the Five Year Plan. This policy has hampered economic growth for decades.
Socialist growth rate
The expression "Nehruvian Socialist growth" was used to refer to the low annual Indian economic growth rate before 1991. It remained around 3.5% from the 1950s to the 1980s, while the average per capita income growth was 1.3 % per year. During the same period, South Korea grew by 10% and Taiwan by 12%.
Socialist Reform (1950-1975)
In 1975, India's GDP (in 1990 US dollars) was $ 545 billion, $ 1,561 billion in the Soviet Union, $ 1.266 billion in Japan, and $ 3,517 billion in the US.
Before independence, most tax revenues were generated by land taxes. After that land tax continues to decline as part of income.
The economic problems inherited to independence are exacerbated by the costs associated with partitions, which have caused some 2 to 4 million refugees to flee past each other across new frontiers between India and Pakistan. Refugee settlements are considerable economic tensions. Segregation divides India into a complementary economic zone. Under England, hemp and cotton were planted in eastern Bengal (East Pakistan, after 1971, Bangladesh), but processing occurred mostly in the western part of Bengal, which became the West Bengal state of India. As a result, after India's independence had to change the land previously used for food production to grow cotton and flax.
Growth continued in the 1950s, growth rates were less positive than Indian politicians expected.
Toward the end of Nehru's time as prime minister, India suffered a serious shortage of food.
Beginning in 1950, India faced an increasing trade deficit in the 1960s. The Indian government has a large budget deficit and therefore can not borrow money internationally or privately. As a result, the government issues bonds to the Reserve Bank of India, which increases the money supply, leading to inflation. The Indo-Pakistan War of 1965 leads the US and other Pakistan-friendly countries to attract foreign aid to India, which requires devaluation. India was told to liberalize trade before aid resumed. His response was a politically unpopular step of devaluation accompanied by liberalization. Defense spending in 1965/66 was 24.06% of spending, the highest in the period 1965 to 1989. Heated by the 1965/1966 drought, the devaluation was severe. GDP per capita grew 33% in the 1960s, peaking at a 142% growth rate in the 1970s, before slowing to 41% in the 1980s and 20% in the 1990s.
From FY 1951 to FY 1979, the economy grew at an average rate of about 3.1 percent per year, or at an annual rate of 1.0 percent per capita. During this period, the industry grew at an average rate of 4.5 percent per year, compared with 3.0 percent for agriculture.
Prime Minister Indira Gandhi proclaimed a national emergency and suspended the Constitution in 1975. About a fifth of the national population was in urban areas in 1975.
Steel
Prime Minister Nehru was a believer in socialism and decided that India needed maximum steel production. He, therefore, formed a government-owned company, Hindustan Steel Limited (HSL) and established three steel plants in the 1950s.
1975-2000
Economic liberalization in India in the 1990s and the first decade of the 21st century led to major economic changes.
About a quarter of the national population is urban in 2000.
2000-present
The Indian steel industry began to develop into Europe in the 21st century. In January 2007, Tata India bought European steelmaker Corus Group for $ 11.3 billion. In 2006 Mittal Steel (based in London but with Indian management) acquired Arcelor for $ 34.3 billion to become the world's largest steelmaker, ArcelorMittal, with 10% of world output.
India's GDP in 2007 is estimated at about 8 percent of the US. The government embarked on a Golden Quadrilateral network linking Delhi, Chennai, Mumbai and Kolkata with various regions of India. The project, completed in January 2012, is India's most ambitious infrastructure project.
The top 3% of the population still gets 50% of GDP. Education is a fundamental right by amending the constitution.
Economic activity is still limited by poor infrastructure such as dilapidated roads, lack of electricity and an impractical judicial system.
Source of the article : Wikipedia
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