This is election time. It is usual that the political
leaders exchange opinions during election season. But much before the current
election fever started, there was an interesting exchange of words between the
BJP Prime Ministerial candidate Naranedra Modi and the Union Finance Minister
P. Chidambaram.
The Union Minister was reported to have asked the
Gujarat Chief Minister to read books on history to understand the ancient
Indian economy. The news report in this
connection mentioned that Chidambaram was clarifying his stand by saying: “Most
Indians were poor throughout its history. Only a few were rich – kings and
landlords. Modi should read books on history.” (ibnlive.in.com/news, Nov.15,
2013). The clarification was in reply to the statement of the Gujarat Chief
Minister who had pointed out that “India’s Finance Minister went abroad where
he described India as a 5000 year old poor nation.”
More than four months after the above exchange between
the two important political leaders of our country, there has been no
discussion on this subject in public. While Mr.Modi has raised his voice on an
important issue relating to the performance of the Indian economy during the
earlier centuries, the clarification of the Finance Minister was casual.
We may have totally different opinions with regard to
the future policies and the present approaches of our country. But how can
there be two divergent opinions regarding history? How it is that even after sixty six years of
independence, India’s economic history is subject to speculations. Is it
possible in any other developed country in the world?
The history of India and much of the world was written
by the European masters during the colonial periods with ulterior motives. This
is the reason why the world economic history begins with the
industrial revolution during the eighteenth century in Europe. The idea was to
make the western countries appear superior and others as mere followers. Unfortunately
the much- educated Indians who shape the policies of our country still believe
in the outdated colonial history, disregarding
the findings of the path-breaking research works by eminent economists over the
years. They refuse to acknowledge that an ancient nation such as India could
have a successful history of her own.
Studies relating to the Indus- Saraswathy civilization
shows as to how highly planned cities existed around 4500 years back. Business
historians note the dominance of India in international trade even during those
times. The first book on economics and
politics was written in India about 2300 years back. It discusses about agriculture,
industry, services sector, imports, exports, tax system and consumer
welfare in detail, besides the policies to be adopted and the
administrative systems required to
manage the economy for better performance. Such a work would not have been
possible without intimate knowledge of economics and the functioning systems.
There have been published research studies relating to
the economic history from objective points of view since the 1980s. The studies present two major findings. One is
that the two ancient economies namely India and China were the most dominant
players at the global level till the nineteenth century. The second finding is
that the European countries enter the global economic arena with significant
contributions only from the nineteenth century.
The most important of the above studies is the comprehensive
research work relating to the economies of different countries during the
previous two millennia. It was undertaken by the Organization for Economic
Cooperation and Development under the leadership of the noted economic
historian Angus Maddison. It is the most authoritative work undertaken so far
and its findings have been accepted by the western world.
The study reveals that during the beginning of the
common era (0 CE), India’s share of global GDP was 32.9 per cent. It is
important to know that India was leading the global economy at that time with almost
one-third of contribution. It was outstanding performance. We have to remember
that no western power has ever touched that mark in the history during the last
two thousand years. Such a performance would not have been possible without
strong foundations and better functioning systems built over many centuries.
China was following India with a share of 26.2 per
cent. All the western world put together was only contributing less than 15 per
cent. In fact the richer countries of the contemporary world namely the US, the
UK and others show their faces individually in the global economic map only
during the sixteenth century.
Another important fact about the ancient Indian
economy is its remarkable ability to remain as the most prosperous nation for
most of the time in history. Maddison
notes that India continued to remain at the top for several centuries, till China
overtook it during 1600 with 0.5 per cent higher share. India went ahead of
China again in 1700, to be pushed to the second position once more during 1820.
Thereafter the both the economies had to face onslaughts from the colonial
powers and witness declines.
Paul S Kennedy notes that India’s share of global
manufacturing was 24. 5 per cent during 1750. In a period of just 150 years,
during 1900, the share fell down to 1.7 per cent. At the same time, the share
of the UK had moved up from 1.9 per cent to 18.5 per cent during the above
period. All the sectors of the economy suffered a lot during those times.
Millions of people had to lose their lives due to the famines orchestrated by
the wrong policies. The destructive approaches of the alien rulers destroyed
our economy and made India a very poor country.
As a result the performance of India declined drastically
and its share of global GDP was 4.2 per cent during 1950. Dadabhai Naoroji
lamented that the per capita income of Indians during the nineteenth century
was the lowest among the “civilized world”. Will Durant records that “British
rule in India is the most sordid and criminal exploitation of one nation by
another in all recorded history.”
By all accounts India remained a richer country till
the nineteenth century, with a commendable performance in different fields. India
and China remained the two dominant economic powers scene for most of the time.
We have been once again witnessing the rise of China and India during the
recent decades, even while the western countries are facing serious problems.
Different studies show that India has strong
fundamentals and native functioning systems. India as a nation has enormous
strengths and higher potential for superior performance. India’s onward march
was disturbed midway by the policy paralysis and the wrong approaches of the
UPA government. It is unfortunate that we have highly educated policy makers
who are not even aware of the basic history of the economy that they are
presiding over.
(www.niticentral.com April 5, 2014)
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