From Riches to Rags

India meets bureaucratic ways of organizing life and

stumbles heavily

The objective today: to quickly examine the travails of the

Indian economy during the colonial times, the first intense
global contact for the Indian economy to notice how Indians
responded

M Rajivlochan,
Professor,
Department of History E-Yantra, IITB
Panjab University, Chandigarh 16th June 2016
1 Fact:
1810: India accounts for The English East India Company finally
establishes its paramountcy over India
about 25% of world GDP

In between happens the East India Company and

British rule over India and hence the great desire to
say that it was the presence of the British that
2 Fact: resulted in the decline
1950: India accounts for
less than 1% of world GDP Great Britain finally relinquishes its
control over India
3 Presumed Fact:

We have already noted:

India is characterized by

great personal skills and achievements

&
Fair availability of surplus capital
Indias contact with the modern
world happens through the
European Companies trading
with the East:
Portuguese,
Dutch,
German,
French and finally,
the English
The English East India Company:
The poorest and most down-trodden of all the Companies:
No capital, no manpower, no technology
Sets up Systems of the sort no one had used till now:
for mopping up capital the joint stock structure
for decision making creating reasonably autonomous
departments
for oversight- the audit department
for creating protocols for work almost every action of
the Company has to be done on the basis of a written
down procedure.
Deviation from procedure is mostly not allowed
The business strategies of the East India Company:

Identify the key to creating a favourable business eco-system for itself

Seeks orders from the Begums rather than the Badshah
Seeks to convert itself into a military power to deal with the
Portuguese in the 17th and early 18th century
o The misadventure with Aurangzebs governor of Gujarat
Creates a new sort of weaver in India and standardises its India
products
To cope with the onset of industries in England, switches first to
military power to coerce its producers, then becomes the landlord
Impact of industrializing Europe on to Indias manufacturers and
the emergence of new manufacturers
 Zinc smelting in
the culture
around the
Aher river that
flows through
Udaipur: from
2nd century bce

Village Zawar on banks of river Tiri dist.Udaipur. Smelting site, c. 1st c. c.e.; spent retort.
Pic. A K Grover of GSI
At Zawar, the
remains of a
residence, the
walls of which
are made of
used retorts
A man of the Asur
tribe making iron
near Ranchi, 21st
century
The traditional iron making furnace, Asur tribe, Ranchi, 21st century
Akbars shield and
sword 1593, at the
Chhatrapati Shivaji
Museum, Mumbai

The museum also has

the personal weapons
used by Aurangzeb
Aurangzebs sword: 1672
Late 17th century armour of
Mughal general
So what happens to Indian industries during the
time of industrialized Europe of 19th century?
1. Almost absolute and total
destruction of metallurgy and
mining
2. Increased production of new
items: salt petre is almost entirely
produced in India by the
noniyas/lavankars
3. New items of export are
discovered, Indigo (lasts till mid-
1850s) and Opium (lasts till early
20th century)
4. Export of cotton piece goods
vanishes entirely
5. New industries come up:
a. Cotton textile;
b. jute
A quick look at the emergence of the Cotton Textile
industry and the Jute industry
The cotton trader opens up cotton spinning mills in
the 1850s and cotton weaving mills soon thereafter
1870s: the Lancashire and Manchester mill owners
associations demands a level playing field =
increased taxes on Indian produce
1880s: L&MOA demands imposition of restriction
on labour, new labour laws for Indian mills
1914: Indian mills have almost entirely replaced
imported cloth
Jute:
First mills come up around
the Hooghly in the 1850s,
to challenge the
manufacturers of linen at
Dundee, Ireland
By 1860s Indian jute is the
monopoly industrial fibre
for the world American,
Russian, British and
Spanish businesses have
been overwhelmed
Indian capital is used in
the Jute industry but it is
Europeans who manage
and front for the entire
industry since Indians find
it difficult to find buyers in
Europe
Partition of 1947 pushes
almost 90% of the jute
industry into East Pakistan
Iron industry and the Tata Saga:

East India Company invests and loses

British government invests and loses

Tata procures technological knowledge

from America and sets up his iron units at
what would later become Jamshedpur

Hurdles before Tata in becoming the

monopoly supplier to Indian railways
The small
chemical
Dont get too taken in by the idea of Gandhian poverty.
industries of India was a land where people saw the making of
India:
money as a nationalist exercise
Soaps and
Cosmetics
Balms and
Medicines
Gurudev Rabindranath Tagore
says he knows of no soap
better than Godrej Soap.
They are equal to any foreign
make. He suggests that the
Indian soap may be better
than the foreign one
 A bit of detail

So, What happens to India all of a

sudden? Psychological trauma of
partition? Loss of creativity?
India and the discovery of the number system: Count of 1 to 9 exists as early as the first c AD
Chinese use it, Indian merchants use it. Who invented it, who used it first is a contentious issue,
irresolveable currently: 7th century: Gwalior inscription with zero written

Till now zero

had existed as a
place holder to
show empty
spaces between
numbers
Now it has been
given a place
value

Why did Indians

discover zero?

Because they
thought of
numbers in the
abstract
 Finding zero: the emptiness left behind after you have removed a number

Indian belief systems

allow for imagining
the idea of
nothingness: the
philosophical idea of
shunya.

The mathematician
merely gave a symbol
for the pre-existing
idea of shunya
Discovery of zero: open up an efficient way of calculating
very large numbers

7th century: Brahmaguptas rule about calculating with Brahmgupta shows quadratic equations
zero: could have a negative answer
1+0 =1
1-0=1 Or solving quadratic equations with two
1* 0 = 0 unknowns

But 1 0 =? In Europe Fermat will be able to imagine

such a problem in 1657
This introduced the idea of infinity. Happened in 12th
century with Bhaskara II Brahmagupta had found a solution to it
1000 years ago
1 0 = infinity

He also introduced the idea of krin: 3-4 = -1; debt Around this time Indian maths were busy
experimenting with trigonometry: an art
If I have three pieces with me and sell four then what is that was first used by Greeks
left: I owe the buyer 1, a krin

But imagining a krin meant it became possible to explore

the issue of quadratic equations
Trigonometry and the Sine function:

Enables the calculation of distances and heights that cant

physically be calculated: if I know the sine value of the
angle...
Greeks knew the value of sine for a few angles, Indians by
15th c had created formulae to calculate value for any angle
(Madhava of Sangamagrama
1
Can be used to calculate the distance of the sun, the moon,
the stars.. Infinite worlds open up 2

You can also begin to calculate the height of buildings you are planning to
construct, massive structures being built using mostly strings