Deindustrialization 1
DEINDUSTRIALIZATION
QUESTION – Was the Indian economy de industrialized or Industrialized during the 19th century?
(Years asked 2004, 2006, 2007, 2008, 2010, 2011)

INTRODUCTION –

Whether the Indian economy was de-industrialized or industrialized during the 19th century has been
subject to great debate amongst two sets or historians- the imperialists and the nationalists. This
debate centred on the main issue- i.e. if British Colonial rule in India and the correspondent exposure
of the Indian economy to western market forces-commercial and industrial competition from
industrialized Britain in the 19th century led to deindustrialization of India (especially the handloom
sector) as argued by the nationalists or whether this didn’t cause major deindustrialisation and as some
argue in fact benefitted India and led to economic growth as argued by the imperialists.
The earliest nationalist views were presented by historians such as R.C. Dutt, Dadabhai Naoroji and
R.P. Dutt, who relied on accounts of colonial traders and administrators to conclude that
deindustrialization of India set in the first half of the 19th century, as a result of influx of cheap British
machine made goods, and the conversion of India into a supplier of raw materials to British industries.
This view was elaborated upon by later nationalists like Bipan Chandra and Amiya Kumar Bagchi,
who used employment data to prove their hypothesis agreeing that deindustrialization occurred in the
first half of the 19th century. Imperialist scholars like Morris D. Morris, Daniel Thorner, M.J.
Twomey, P.Parthsarthy and Tirthankar Roy argued the contrary saying that, that
deindustrialization occurred in the second half of the 19th century if at all and secondly income
statistics were the best indicator of deindustrialization and not employment data used by Nationalists.
MORRIS.D.MORRIS
Morris. D. Morris revived the debate with his paper, “Towards a Reinterpretation of Nineteenth Century
Indian Economic History”. He outlined earlier nationalist (R.C. Dutt, Dadabhai Naoroji, Ranade) as well as
western scholar’s (Strachey brothers, Lord Curzon, T. Morison) arguments and said that both views
suffered from internal contradictions and thus he was making a reinterpretation of the debate.
Morris argued that the 19th century in India witnessed unprecedented economic growth and a rise in
per capita income. He held that British rule brought political stability to the tumultuous 18th
century by setting up a liberal nation state, introducing higher public order, standardised
administration, transport links and eliminating tax and commerce barriers. This along with a slow 0.4%
population growth rate between 1872-1921 stimulated economic growth in 19th century India. Morris
says this growth was noted as (a) Firstly average agricultural output per acre and per man
probably increased. This was due to higher political stability, new irrigational projects by the British,
increase in total area under cultivation, improvement in transport and public order and the growth of
foreign and domestic markets and a shift to cultivation of high value crops in many areas. (b)Secondly
growth was seen in the handicrafts sector especially- handloom sector. Morris argues contrary to
the Nationalist view that Manchester’s cheaper machine made textiles wiped out Indian textile
manufacture, by saying that British machine made yarn in fact seemed to have ‘strengthened the
competitive position of the indigenous handloom sector’. He also noted that rise in population led to a rise in
demand and consumption of cotton domestically. Thus Morris says at worst British exports to
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India, “skimmed off the expanding demand” and Indian handloom weavers were no poorer by end 19th
century. With regard to the nationalist view that shift to metal products led to decline in pottery and
that railroads displaced traditional carriers, Morris says that these new sectors generated income and
employment to compensate for decline in other occupations. (c) Thirdly Morris says late 19th
century India witnessed the growth of modern factories (especially jute and cotton mills). The cotton
textile industry by 1900 was one of the largest in the world. Morris says this proves that British policy
didn’t deliberately inhibit Indian economic expansion. (d) Lastly he argued that 19th century saw a rise
in domestic and foreign commercial activity, due to greater urbanization in India, a growing
international market and a shift to new products like tea. Thus Morris concluded that the 19thcentury,
due to the introduction of “a stable modern polity” and “largely laissez faire government policies” witnessed an
increase in real economic output, far from deindustrialization.
BIPAN CHANDRA –
Nationalist historian Bipin Chandra provided a detailed critique of Morris’s arguments. He began by
critiquing the title of Morris’s work, by saying the he only reiterated the imperialist view and
didn’t ‘reinterpret’ it. Secondly, Morris doesn’t grasp the nationalist argument, which focused on
whether British rule facilitated industrialization of India and not on whether it destroyed the traditional
sector as Morris asserts. He says Indian Nationalists were in favour of positive economic changes
brought about by the British. Thirdly with Morris’s portrayal of the 19th century as one of growthdue
to favourable factors like, stable polity, surplus land, rising per capita income etc. Chandra asks why
didn’t India industrialize? While many other countries without many of these factors, such as Japan,
Russia, Italy, France did industrialize.
Then Chandra then critiques the two reasons cited of economic growth and areas of growth
highlighted by Morris. Firstly he says high or low population growth can affect an economy
favourably or even unfavourably. He also shows population growth was not as low as 0.4% as Morris
claims but 1% according to G. Blyn. Secondly he critiques Morris’s point on political stability, as he
says law and administrative order doesn’t automatically end in economic growth but can be used for
exploitation by the state. He also says taxation and commercial regularization didn’t help the
economy; in fact it caused agrarian hardship and internal customs duties hampered internal trade and
industry. Finally rail development by British in India, was used to exploit India too by flooding
Indian markets with British goods. Thirdly regarding Morris’s point on increase in agrarian output,
Chandra says, there is no evidence of introduction of new agricultural technology in 19th century
and commercial crops, only occupied 16.5% of agrarian land in 1891, the benefits of which accrued to
moneylenders, landlords European plantation owners who used it as an instrument of drain, forcing
peasants to produce such crops.
Fourthly regarding growth of handicraft and increase in competitive position of Indian
handlooms, Chandra shows that export of cotton goods from India fell much faster than import of
cotton yarn, thus increasing the price of such yarn, also import of foreign cloth increased 12.5 times
between 1894-1889 while that of yarn only 4 times, thus showing a reduction in production of
Indian cotton cloth. Only in few areas did Indian cloth maintain its position due to inaccessible
markets but overall the position of Indian weavers deteriorated. Thus he says many artisans left to
bid for land, work as share croppers or agrarian labour, while those who stuck to their craft died in
periods of famine. He also cites evidence for decline in number of textile centres like Murshidabad
and decline in crafts in Delhi. He points to the increasing subdivision of landholdings, fall in wages and
Deindustrialization 3
migration of artisans, none of which support Morris’s view of employment in industry increasing,
increase in land under cultivation and greater monetization. Finally Chandra’s most important
critique of Morris is that he didn’t produce a shred of qualitative or quantitative evidence in support
of his theory, while eagerly criticizing nationalists who provide such detailed data. Thus Chandra
concludes that the Indian economy of the 19th century witnessed ‘aborted modernization’ typical
of a modern colonial economy.
A.K. BAGCHI –
A.K. Bagchi a Marxist scholar presented evidence in support of the nationalist view. He argued that
three factors were are essential for capitalist industrialization-(i) increase in national income generated
by secondary sector,(ii) increase in population engaged in secondary sector and (iii) Increase in degree of
industrial mechanization . Bagchi argued that 19th century India, witnessed a reversal of the first two
factors and thus deindustrialization. He supports this argument for decline in proportion of the
population dependent on secondary industry by his case study of Gangetic Bihar, by comparing
employment data in the start and end of the 19th century-comparing Francis Buchanan Hamilton’s
Bengal Survey of 1809-13 and the 1901 Census. Bagchi calculated the total population dependent on
secondary industry and concluded that in 1809-13 18.6% of the population of Gangetic Bihar was
depended on secondary industry while in 1901 only 8.5% remained dependent on it i.e. a drop of
over 50%. He says this decline was most in the largest sector-the textile sector – as in 1809-13,
62.3% of industrial population depended on cotton spinning and weaving in Gangetic Bihar but in
1901 only 15.1% were. The principle reason for such a decline he said was import of cheap British
textiles into Gangetic Bihar- he cites Hunter who says import of English cotton cloth increased till
1914 when India imported 3014 million yards, and these goods spread due to new rail networks which
resulted in a fall in internal demand for Indian cotton textiles.
Bagchi also cites qualitative data like Statistical Accounts of Bengal District (1870s) and
District Gazetteers, which recorded a shift to manufacturing coarse cloth and decline in
condition of weavers forcing them into agriculture or to migrate to industries along the Hugli. Bagchi
here refutes the Imperialist point that displaced artisans/weavers as in European economies were
absorbed into new sectors like railways/commercial agriculture. He says in Bihar, there was only one
rail workshop at Jamalpur, which was inadequate for absorbing the huge displacement. In other parts of
India in 1900, modern industry, mines and plantations together employed only one million people,
barely being able to absorb this displacement. Thus he says most displaced artisans became agrarian
labour. Bagchi also says Gazetteers noted a complete extinction of other industries like handmade
paper and bidri ware (in Purnea) by the 20th century. Finally he also argues that other areas witnessed
similar decline-e.g. Bengal according to him witnessed a fall in employment in traditional industry was
16 time that of Gangetic Bihar.
MARIKA VICZIANY –
Marika Vicziany provided a detailed critique of the quantitative data cited by Bagchi. She firstly
critiqued Bagchi’s uncritical use of Buchanan’s Records as she points out many flaws in Buchanan’s
method of Data collection- (a) she says we don’t know if the statistics were collected in a tabulated
form or tabulation was done later. Buchanan’s method of estimates of total population relied on
calculating number of people involved in agriculture and by eliciting the opinions of “most intelligent
men” in each district. Vicziany says the opinions of these “intelligent men” were not dependable as
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Buchanan himself admits to local zamindars being reluctant to volunteer information and
misguiding him for personal reasons. Also Buchanan’s survey route of the seven districts of Bihar was
not pre planned leading to pockets being left out and the data collected was largely qualitative ongeography,
people, natural production, arts etc. Finally Bagchi doesn’t even use original statistics from
Buchanan’s manuscripts but condensed statistics published by M. Martin in 1838, leading to skewed
data. Thus his population estimates are dubious. Secondly Vicziany critiqued two assumptions made
by Bagchi regarding cotton spinner-(a) that the average spinner supported one person beside himself
or (b) every spinner supported himself/herself at least. Vicziany shows this was but the case in many
places- e.g. In Shahabad the annual subsistence requirement of a person was 12 rupees a year, but a
spinner only made 1.5 rupees a year. Similarly from Bhagalpur and Patna Gaya she cites such evidence.
Thus Bagchi doesn’t ever assume that the spinner/weaver couldn’t support himself and probably had
another occupation. Thirdly Vicziany critiques Bagchi’ inclusion a number of artisanal groups in the
“industrial sector”- as she says D.Thorner pointed out that how Bihar could have an industrial
sector as production was still carried out by the household economy not individually and differentiated?
Also she says salt makers were not artisans in Shahabad, but agrarian labour for large part of the
year. Fourthly she critiques Bagchi’s comparison of two very different sources-Buchanan’s Survey
and the 1901 Census, because the method of data collection in both was very different and Bagchi didn’t
reconcile these differences before his analysis. Finally she also says the Bagchi makes too much of the
decline in the Bidri ware and paper sectors, as she says very few artisans worked in these sectors-e.g.
1 bidri worker, 64 paper makers, 22lead makers etc, as compared to other sectors with many more
workers -like 2900 potters, 2293 goldsmiths, 5132 oil makers etc.
Bagchi was critiqued by imperialist historian J. Krishnamurti, who argued that Gangetic Bihar
was an exceptional case as the railway extensively penetrated this areas causing de-industrialization
due to faster spread of British textiles. However he says deindustrialization in the larger sense is not
witnessed across the board in 19th century as railways penetrated limited parts of the subcontinent. He
also felt the shift of people out of industries was due to changes in industry itself -such as shift from
labour intensive to capitalist industrial methods of production which required lesser labour. Bagchi
replied to Krishnamurti’s view by citing examples of railway penetration into interior districts of
Bellary (Karnataka), Cuddapah, Kurnool and Anantapur (Andhra Pradesh) as well as the city of Hyderabad,
which caused deindustrialization in these areas.
TIRTHANKAR ROY –
Tirthankar Roy too argued in favour of the imperialist position. He said that one cannot deny that
de industrialization occurred in some areas. Yet in terms of income loss, which is a more important
parameter of deindustrialization rather than employment loss as nationalists assert, one notes a very
small decrease in real income. He says even though 4-5 million jobs were lost by artisans over 60-70
years, this was accounted for loss of 30% of jobs in the industrial sector, yet in terms of income loss it
was only 1-2% of industrial income. This was because artisans that lost jobs found employment in
other sectors like agriculture due to increasing commercialization. Thus he argues it is incorrect to
present a case to total deindustrialization across the 19th century.
REVISIONIST HISTORIANS –
After Bagchi’s study of Gangetic Bihar a number of revisionist historians’ post 1983 conducted
regional studies on deindustrialization. Most argued there was decrease in hand spinning and
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weaving industries but this was largely in the second half of the 19th century and was mild and thus it is
hard to argue for large scale deindustrialization, but probably for a limited decline.
TWOMEY AND PARTHASARTHY –
M.J. Twomey and P. Parthasarthy, countered the nationalist view that a decline in export of Indian
textiles in the 19th century adversely affected the Indian textile industry. They argued that even if
volume of such exports dwindled it didn’t have an adverse effect as Twomey says, statistics show that in
end 18th century cloth exports were 50 million yards while total production of cloth was 2 billion
yards, thus export earning was a minor part of the textile industry. Similarly P. Parthsarthy said in
late 18th century in South India, 1,800 tons of cloth exported while 50,000 tons were produced, exports
thus being a minor part of the Indian handloom sector. They also argued that Lancashire exports into
India only took place in the second half of the 19th century.
KONRAD SPECKER –
Konrad Specker in his case study on the Madras handloom industry in the 19th century argued that
while number of looms in the areas increased between 1820-70, yet there was a contraction in demand
for textiles due to short term crisis like famines. He says the Indian reaction to British Lancashire
textiles was qualitative and not quantitative and region specific. Thus we see a shift to production
of coarse varieties of cloth across Rajahmundry, Vishakhapatnam, Coimbatore, Tanjore, Cuddapah and
Nellore which resulted in elimination of some areas of textile production such as Bellary where number
of looms decreased. The overproduction of coarse cloth also resulted in impoverishment of weavers
in some areas. He says despite the increase in number of looms and the increased production of coarse
cloth, one can’t say as Morris D Morris does that cheaper machine made yarn strengthened the
competitive position of the Indian weavers. He takes a middle path by concluding that textile sector
remained important field of employment but under-employment rose significantly within it,
arguing neither in favour of complete de-industrialization or growth.
PETER HARNETTY –
Peter Harnetty in his case study on Handloom Weavers in the Central Provinces argued that the
early 19th century saw a flourishing handloom industry catering to a domestic and international
market. Yet he says post 1850 into the mid 20th century, one notes the decline of the handloom
industry firstly in terms of number of weavers employed and number of looms. Secondly the surviving
industry became confined to major urban centres like Nagpur, Umrer, Pauni and Burhanpur. Thirdly
the few high caste specialized weavers like the Koshtis and Momins survived in the textile industry
low caste coarse cloth produced had to find other occupations. Fourthly weavers produced fewer
varieties of cloth. Fifthly weavers lost a lot of their individual status. Yet Harnetty says that the
shift to machine spun British yarn was a strategy of survival and the introduction of the fly shuttle in
the early 20th century helped check the deindustrialization which crept into the industry, thus also
taking a balanced view.
SUMIT GUHA –
Sumit Guha who conducted a study on the Handloom industry in Central India between 1825-1950
argued in a similar vain. He says Richard Jenkins pointed to a flourishing textile industry in the region
till 1850. However from 1860s decline set in as due to rise in prices of raw cotton in Central India.
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This was largely due to a breach between the northern and southern states and due to increase in
export if local raw cotton-e.g. 26million lbs were exported out of 35 million produced in 1863-64,
leaving local weavers with virtually no raw material. He argues that expansion of rail links by
1865-reaching Nagpur, indigenous textile industry was hard hit as cheaper British goods penetrated
the market. Weavers were also reluctant to accept foreign machine spun yarn, unlike in other areas. All
this according to Guha led to a huge exodus of weavers from towns, to take up agriculture, work in
railways etc. Yet he says from 1870s on weavers begun to accept mill yarn and by 1885-89 one notes a
recovery. In conclusion he says by the end 19th century hand spinning was hard hit, and spinners took
up secondary occupations, but his analysis shows the textile industry wasn’t completely destroyed as
weaving noted an expansion.
Thus it can be inferred that there was definitely shrinkage in employment in indigenous Indian
industries especially the handloom industry, however as Revisionists point out one can’t argue for
complete de-industrialization across the board in all industries, in many places the textile industry
survived with a shift to coarse cloth production and artisans sleeked alternative employment. Also one
must note that income statistics may prove better indicators of de industrialization than employment
data which nationalists use.