HISTORICAL

ISSUES IN DEINDUSTRIALISATION IN NINETEENTH CENRY SOUTH INDIA

Prasannan Parthasarthi

The Sources of Indian Competitiveness

In the seventeenth and eighteenth century Indian cotton specially the higher quality variety were
cheaper in comparison to those in other countries i.e. why Indian cloths were in great demand Europe
and the entire world.

Why were Indian cloths cheaper ?

Western Economists View

Indian workers were paid lower wages and hence were exploited and had bad living conditions.

Parhsarthis View

Indian workers were not paid lower wages as the weekly earning ( expressed in terms of grain) of South
Indian and Bengal workers was better than the workers of Britain.

Weavers in South India and Bengal possessed a number of advantages over their British counterparts.
These advantages were

1. Weavers in South India had a better bargaining strength in comparison to traders of Britain who
bought cloths from them ( to be taken to Europe). A South Indian weaver could cancel a
contract any time but a traders was not in a position to do that ( even if there was defect in
these cloths sometimes). This is because a waver had many buyers but a trader did not have as
many supply options.
2. Merchants in South India had no control over the weavers as weaver were in stronger
bargaining position .
3. Weavers in South India suffered from far less unemployment and underemployment.

If Indian workers were not paid lower wages then what was the reason behind their competitiveness ?

4. The price of staple ( rice) of South India was half the price of the staple ( wheat) of Britain. So
Indian workers were better off in real terms in comparison to British workers.
5. Rice was cheaper in India because Indian agriculture was more productive.The output to seed
ratio for rice cultivation was about twenty to twenty five to one in India the same in Britain was
only eight to one.

Broadberry and Bishnupriya Gupta Critiqe of Parthsarthis View

1. Economy of India was far more backward than British economy during the eighteenth century.
2. Grain wages of India and Britain were comparable during the 17 th century but Indian grain
wages fell in the eignteenth century to thirty and forty percent of the British level.
3. In money terms ( silver wages ) Indian wage was tenth and quarter of the British wages.
4. Economy of the Indian subcontinent was akin to the less developed regions of the European
periphery.
5. Low money wages in India were due to the lower productivity in the subcontinent specially in
the traded goods sector ( i.e. cotton textiles).

Parthsarthis rebuttal of Broadberyy and Bishnupriya Gupta arguments

1. Broadberry and Guptas arguments are problematic on several counts.

2. Historical and empirical foundations of their arguments are shallow.
3. Evidence for key claims not given much of the historial information that is harnessed is treated
in a superficial manner.
4. The arguments for backwardness of Indian economic life is derived from economic theory not
from historical facts.
5. Broadberry estimates of the money and grain wages of South and North India are derived from
secondary sources and the authors do not try to examine the reliability of these sources. For
example they rely on the prices given in Ain-i- Akbari ( a book on Akbars reign, written by Abul
Fazl).According to Alan Heston prices and wages given in Ain-i-Akbari are nominal not real
wages.
6. The calculation of wages and earnings in the early modern world is fraught with difficulties but
Braodberry and Gupta seem to be completely unaware of these problems. The widespread
prevalene of non-monetary perquisites to weavers further complicates the problem. Peter
Linebaugh has made reference to same type of non-monetary wages prevalent in Britain.
7. Broadberry and Gupta criticize Parthsarthis estimates of weaver earning on the grounds that his
figures are too high . This critique relies on an inaccurate distinction between skilled and
unskilled labour.
8. In their obsession to quantify Broadberry and Gupta completely ignore the qualitative evidence
that Parhsarthi provides.
9. The backwardness of eighteenth century India is supported with the assertion that productivity
in the textile sector was lower in India than in Europe. Again, no evidence on productivity is
provided support of this claim.

The Changing Basis for Competitiveness and Indian Deindustrialisation

DEINDUSTRIALISATION
 Changing basis of competitivenerss. From the late eighteenth century the basis of competitiveness
changed as a consequence of tehnological and institutional changes in British cotton manufacturing.

Lower price better quality Indian advantage. The Indian competitive advantage rested on lower price
levels but mechanization in Britain gave quality, price advantage to Britain.

Technological and political advantage of Britain.British technological superiority came at the same
time that the English East India company was establishing its political control over India. Indian weavers
suffered because both politics and technology were in favour of England. Marx famous statement, the
bones of handloom weavers bleaching the plains of India aptly described the situation of Indian
weavers.

The loss deindustrialisatin of India a historical inevitability. .For Marx destruction of handloom
weaving was a painful but a necessary step in the modernization of India. He said that the British were
simply the bearers of the historical inevitability i..e the development of capitalism and with it the
modern industry.

Deindustrialisation because of misrule. Nationslists , like Romesh Dutt , however felt the destruction
of cotton weaving was a vivid example of the British misrule of India. They said that Britishers killed
handloom weaving to turn India into a market for British textiles.

Deindustrialisation led to widespread unemployment and poverty.The fall in cotton textile in the
country resulted in widespread poverty. In a path- breaking essay Amiya Kumar Bagchi compared
employment figures from 1809-13 and 1901 in spinning as well as other manufacturing from several
districts in Bihar and concluded that there had been an absolute decline in manufacturing employment.
In addition he argued that the proportion of manufacturing workers in the population fell be more than
half.

NO DEINDUSTRIALISATION

Regional studies should not be the basis of an all India conclusion.Crtics say that a study on some
regions of India may not be used to conclude about all of India. Bagchis study focused on Bihar.

Bagchi used unreliable data sources.Bagchis findings have been challenged by many. Marika Vicziany
has questioned the reliability of the data sources of Bagchi. Konrad Secker has examined the Madras
Presidency and Tirthankar Roy has analysed the entire of India.

Deindustrialisation a partial view.Spencer says that complex changes happened in the economic life of
India because of British influences and to say that India deindustrialised is a partial view of the
phenomenon.

Effect of British influence was positive overall. Tirthankar Roy says that both creative and destructive
effects were there because of the British influence on India. He says that the overall impact was
creative.
Neither Spencer not Tirthankar Roy examined the evolution of textile industry from its heydays.
Spencers work relates to the period after 1820s. Hence is not able to see the good days the Indian
textile industry had seen before that.

Tirthankar Roys work relates to the periods of nineteenth and twentieth century i.e after the process of
deindustrialization had worked its way through the Indian economy. The decline of manufacturing was
a long an protracted process. To some extent the decline was reversed from the late nineteenth century
but this revival m ust be seen in the context of the earlier decline.

Decline in two phases. In Southeastern India the decline of industry happened in two phases-The first
phase- from late eighteenth to the mid nineteenth century. In this phase the decline was mainly due to
loss of export markets.The second phase- from 1850 to 1880. Indian production suffered due to
imported cloths.

Loom census data of Konard has shortcomings .Konard argued against the thesis of deindustrialization
on the basis of loom census. His focus on the number of looms has several shortcomings like availability
of limited data.

Loom census data also show deindustrialisation. According to a Committee of Circuit Report ( based on
loom count) there was substantial decline in manufacturing in Rajamundry from 1780 to 1820. Similar
things happened in other districts like Vizagapatnam, Neelapilly , Ingeram etc.. All these town declined
under the influence of Manchester import. Maslipatnam at one point in time used to send 50 lacs cloths
to Persian Gulf but under the influence of Manchester trade this number was reduced to half lacs.

A simple comparison of looms number will undersestimate the real effect on the economy. The loss
of these markets had consequences far greater than what can be captured by simply counting the
number of looms that stopped working. Since high value items ( finer cloths) were being exported to
Europe and low value items (coarser cloths) generally were being sold locally the financial loss due to
loss of export markets was huge. Therefore a simple comparison of looms number will undersestimate
the real effect on the economy.

Decline in demad for high quality yarn. Loss in demand of high quality cloths could also have resulted
in the loss of market for high quality yarn.Spinning cost accounted for approximately 25 percent of the
total cost of production of a cloth ( weaving 13 percent of the total cost).

Women badly affected. Suvival at stake. Many women used to spin high quality yarn in their homes.
Loss of cloth market meant loss of earning source of such women. In a very famous 1882 letter written
by a widow from Bengal the plight of women is painted vividly.

Decline in South India textile manufacturing. Although available data makes it difficult to establish
unequivocally, it does strongly suggest that South Indian textile manufacturing activity declined in the
third quarter of the nineteenth century.

Impressionist Evidence. Census data indicates that the number of looms in he Madras Presidency were
more or less steady after 1850. However impressionistic evidence suggests marked decline in the
number of weavers.. E.B.Havell who was serving as the superintendent of the school of Arts in Madras
travelled widely in South India and said that because of cheaper European cloths Indian weavers were
forced to abandon their trade.

Little analysis of the loss of hand spinning. As weaving declined spinning also declined. Tirthankar roy
says gradual extinction of hand made yarn is a point on which there is not much disputation today. The
economic and social ramification of the decline of hand spinning has been largely unexplored.

Male Bias. The debate on dindusrialisation has a consistent male bias. Yarn spinning was a good
employment generator for women. Lack of spot light on the decline of spinning yarn shows a male bias
in the disucussions of deindustrialization.