Published online by Cambridge University Press: 28 March 2008
Between 1860 and 1970 the Indian economy was in an underdeveloped state, but the characteristics of this underdevelopment need to be specified with some care. The economy was not simply stagnant, neither was it incapable of growth, nor in a necessary preparatory stage for development in the future. In the aggregate there was a surplus above subsistence, leading to some capital investment, technical change and new organisational forms, but the dynamic forces thus generated were not strong enough to bring about sustained growth. The possibility of greater efficiency was too easily overwhelmed by the sheer size of the labour force, setting up a vicious circle of labour-intensive, low wage/low productivity processes in agriculture and industry, reinforced by a peasant form of social organisation that encouraged the self-exploitation of family labour. As a result, in the first half of the twentieth century productivity rose only slowly in industry, and little if at all in agriculture, while average per capita income stagnated and foodgrain availability fell significantly during the last three decades of colonial rule. Industrial output grew sharply in the first twenty years after Independence, but the policies needed to sustain this resulted in consistent balance of payments difficulties and a major agricultural crisis by the mid 1960s.
High man:land ratios and population densities do not by themselves explain the failure of development in South Asia. Indeed, the example of other Asian economies in the twentieth century suggests that high rates of labour availability can spur a broadly based and successful pattern of development provided that such labour is rewarded through a consistently high rate of productivity, a high rate of utilisation, and rising real wages.
To save this book to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
Find out more about the Kindle Personal Document Service.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.
To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.