India's Economic Potential

Abstract

NVTH the British surrender of Penang on December i9, I94I, which gave the Japanese their first important base on the Indian Ocean, the battle of the Pacific reached the very gates of India. In this situation, the extent of India's resources for war, and the degree to which they are or can be mobilized, becomes a matter of vital importance. In this article an attempt is made to analyze one aspect of India's war potential-her material resources and industrial capacity; which factors, indeed, constitute the foundations of modern military strength. India's economic structure is similar in many respects to that of the colonial and semi-colonial countries of Eastern Asia. Under British rule, India has been developed as a large-scale producer of raw materials, as a source of tax revenue, and as a market for British and other foreign manufactured goods. Nearly 75% of her population of some 380 million are dependent upon agriculture for their livelihood, while less than 2% are supported by modern industrial enterprises, i.e., factories, railways, and mines. The great difference between India and other colonial areas such as Malaya or Netherlands India lies in the wealth and variety of her natural resources, which are sufficient to permit of an extensive and manysided industrial development. India is potentially one of the most powerful industrial areas in the world, but the greater part of her industrial resources are either undeveloped or exported in the form of raw materials to supply the factory industries of Great Britain and other industrialized Powers. Thus, one of the most notable features of Indian industrialization is the tremendous gap between potential resources and actual development. India is the world's second largest cotton producer, production averaging about seven million 40o-lb. bales annually, of which nearly half is exported. Jute, in which India holds a virtual monopoly, is the second most important agricultural product, the annual output in recent years averaging about nine million bales, of