A Business History of India by Roy Tirthankar

Author:Roy, Tirthankar
Language: eng
Format: epub
Publisher: Cambridge University Press
Published: 2018-02-14T05:00:00+00:00

Conclusion

Via a new equation between business and politics, the thinking on Indian economic policy came to rest, ever more firmly, on the idea of protectionist industrialisation. The business lobby in India that had a say in the matter of policy did not always agree completely with the politicians, but there was a substantial shared ground between them. They endorsed a Congress narrative that free trade and foreign capital had damaged India and discriminating protection was an imperialist trick. The business lobby in Pakistan was made up of traders who did not read the economic history of the Empire with such a dark lens, in fact, did not read history at all to justify the relatively open policy that came into being.

India was different. The government of independent India decided that trade was undesirable, and moneylending was evil. The socialists among the Indian politicians wanted a Soviet-style industrialisation. Metals, machines, and chemicals were to be the favoured fields. The technology had to be bought from western markets. Trade, textiles, and foreign firms – the three pillars of the colonial modernisation – would recede in priority in the future strategy of industrialisation. Thirty years on, the port cities had more bankrupt businesses than healthy ones. Agricultural trade was greatly constricted when not banned. Land and sea trades disconnected. Most dangerous of all, export capacity was impaired when import needs had arisen, making serious balance of payments crisis a way of life.

The strategy left many losers. And yet, from the ashes of this disaster, there did arise indigenous business conglomerates with interests in metals, machinery, and chemicals. This process and its consequences will form the subject matter of Chapter 7.

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