The State and Economic Development in India 1890—1947: The Case of Oil

Abstract

The role of the State in promoting Indian economic development in the nineteenth century is one of several aspects of modern Indian economic history which have been ‘re-interpreted’ in recent years. The conventional wisdom once portrayed the policy of the British government in India as one essentially geared to serving British economic interests. By means of ‘discriminatory interventionism’ in economic affairs, it was argued, the Government encouraged the development of a primary commodity export economy, with all its attendant defects, in India. However, over the last two decades the reputation of the Government of India has undergone a rather noticeable transformation. Economic imperialists became, first, benevolent nightwatchmen, and then ‘development-orientated’ officials formulating an embryonic unbalanced growth model for Indian development. Parallel with this improvement in the Government of India's reputation has been a deterioration in the economic reputations of certain other governments in nineteenth-century developing economies, governments whose performances used to be favourably compared with that of the British in India. In the cases of Japan and Tsarist Russia, for instance, both the extent and effectiveness of State intervention in the economy has been questioned, and there has been an increasing recognition of the primacy of non-governmental factors in the economic growth of those countries. Given the ideological and organizational parameters limiting the range of possible activity by any nineteenth century government in its economy, the performance of governments in other developing countries of the period, and the political constraints imposed by being a subordinate section of a world-wide Empire, it is no longer possible regard the actions of British officials in India as wicked, and many would now regard them as almost respectable.