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Legacy of British rule is still holding India back

LiveMint logoLiveMint 12-04-2017 Tyler Cowen

One of the most common debates I hear about India is whether British colonialism has been good or bad for the country’s economic prospects. Defenders of British rule often cite the construction of the railroads, or the spread of the English language, but as time passes the evidence mounts that India would have been much better off on its own.

That’s of relevance for the shouting match, but it also bears on how optimistic we should be about India today. If you view the colonial period as a harmful aberration, you will tend to think India can catch up as it leaves these distortions behind. Conversely, if you see British rule as a plus, you may worry that India will eventually lose some of that inherited dynamism.

Consider living standards in the colonial period. For much of the 18th and early 19th centuries, under British rule, Indian economic performance was mediocre at best. It has been estimated that the yearly agricultural wage was higher in 1810 than in 1946. It’s difficult to prove how much of that decline was because of the British, but it is hardly a ringing endorsement.

Economic performance picked up in the latter part of the 19th century, yet India was still desperately poor at the time of independence in 1948, with a literacy rate of only 16%. Since then, India has begun to catch up to the West, and after the reforms of the 1990s the country has often grown at 6% to 8%, a rate never possible under British rule.

Furthermore, the democratic version of India has taken much greater care to avoid famine, as pointed out by Nobel laureate Amartya Sen. Parliamentarian Shashi Tharoor, in his recent book Inglorious Empire: What the British did to India, estimates that unnecessary deaths by famine, under British rule and due largely to neglect, ran in the range of 30 million to 35 million people.

One big difference in the post-colonial period is that a democratic Indian government endeavored to invest more in the health and education of more citizens, however imperfectly this was implemented. The British, in contrast, supplied fewer public goods and too often the expenditures were directed toward defending British rule, extracting revenue or ensuring India as a captive market for British goods. The deindustrialization of India was a conscious British policy from the 18th century onward; in 2017, we have a good understanding how hard it can be for communities to recover from the loss of manufacturing jobs.

Another way to make the historical comparison is to consider which Southeast Asian economy never fell under colonial rule. That would be Thailand, which has a per capita income in the range of $16,300 by World Bank estimates, compared with India’s $6,100. Again, that single comparison is not dispositive, but it hardly favours the British record in India. If you are looking for the upside of British colonialism, you are more likely to find it in the wealthier and better-treated Singapore or Malaysia.

Another possible comparison is between British-ruled India and India’s “native states,” namely the numerous territories and principalities where British involvement in direct rule was minimal. To be sure, those regions still were embedded in a broader nexus of British control, and there is no comprehensive database. Nonetheless, historian Jon Wilson, in his recent book India Conquered: Britain’s Raj and the Chaos of Empire, offered this assessment: “Economic growth and institutional dynamism occurred in the places that were furthest from the rule of British bureaucrats.” For instance, Tata Steel Ltd put India’s first modern steel plant in Jamshedpur, a tributary area outside of British rule. Another study found that the independent areas had better performance in terms of education and health care during the post-colonial era.

What then of the positive British contribution? The English language and the railroads and irrigation canals do count, but India could have obtained some of those gains through trade and cross-cultural exchange. And for all the vaunted advantages of English, by many estimates only about 10% of the Indian population can speak the language. That is another way of seeing that the British rulers invested only small amounts in public goods and education.

Finally, Tharoor chronicles how the British pitted religious and ethnic groups against one another to cement their rule and weaken potential opposition. This disunity reached its nadir during the Partition period, when between 1 million and 2 million people lost their lives through the violence connected with the split of India and Pakistan. Bloomberg

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