Why is India poor ?

“Why is India poor ?” …..This is the question which has been haunting me whenever I look at “images of India being projected as the third world” where the biggest struggle is to find the next meal. There is a stark difference in the lives of the people and the infrastructure of the western nations compared to what we have. India ranked 128 th out of the 177 countries listed in Human development index in 2005. On the human poverty index, India ranked 47 th. Over 34% of the population lives on less than $1 per day.

Historically, India had been one of the wealthiest countries which led to the foreigners – Afghans, Greeks, Europeans and a swarm of other nations – searching for a route to find this mystical place. The reason for the wealth had been abundance of natural resources and the hugely profitable spice trade. Spices from India had been in very much demand in the western world, because they were the only things which could help the europeans to preserve their food for the long winters of Europe. Since there was no direct trade, the spices had to be transported to far off places through a number of middle men. This combined with the taxes along the route and lower number of traders in the business led to high prices of spice.

Things changed with the establishment of the sea route by european trading companies which utilised the highly divided kingdoms of India to their advantage. By colonising India in parts, they started making their countries wealthier by drinking the blood and sweat of thousands of Indians. Laws enacted by the British imposed severe economic constraints on the already troubled people’s lives. For instance, the finished cotton products from India had 70-80% import duty whereas the goods from britain had just 2-4%. This destroyed the Indian cotton and textile industry. As highlighted in the preface of the working paper on Mughal empire decline by David Clingingsmith and Jeffrey G. Williamson, India produced about 25 percent of world industrial output in 1750, this figure had fallen to only 2 percent by 1900. They also estimate that between 1772 and 1815, … there was a huge net financial transfer from India to Britain …reaching a peak of £1,014,000 annually in 1784-1792 . This, I hope is apart from meeting the administrative expenses of the officials of the East India company. For over 100 years, the colonial rule drained wealth and inflicted misery on countless Indians.

After much struggle, suffering and loss of lives, the freedom fighters under Mahatma Gandhi and numerous other leaders were successful in attaining “independence” from the British. The British left the country in a hurry and in deep trouble. At the end of colonial rule, India inherited an economy that was one of the poorest in the developing world. The policy of divide and rule, led to the partition of India and Pakistan was formed. The home affairs minister, Sardar Vallabhai Patel had the responsibilty to weld the numerous provinces and the princely states into an united India. After the succesful integration, the government started building the basic infrastructure – Public Distribution service, expanding the rail and road network, schools, post offices and financial institutions. Much of the efforts of the early years went into feeding the people and making the country secure from fundamentalists and neighbours.

A glance at the charts of the human development index and the standard of living will show that the Europe and Americas top the charts. Though it may be because of the early industrialisation, the resources for the early industrialisation of many of the European countries were plundered from the colonies. It is highly immoral and unethical to clinch the freedom and livelihood of one person to feed the greed of other. Sometimes it makes me wonder, if we could sue these nations to get back our stolen wealth and resources. Imagine how much of money that can net and if we invest that in our country, we can easily wipe off poverty and build a comparable infrastructure and standard of living.

Though the colonisation is one of the factors which made the country poor, looking at the growth of countries like China, Singapore from similar conditions to what they are now, lot of factors have to be taken into consideration and careful introspection is required to identify the factors that have to be modified in the governance and policies of our country. These points will be discussed in the next post….. Feel free to comment.