Laptop curbs are linked to our Swadeshi legacy
76 years after Independence, we need to have a more mature debate on the colonial legacy
India’s hurriedly announced import licensing policy for laptops has raised the spectre of the infamous licence raj. Some economists and businessmen are worried that the latest move takes India closer to the pre-1991 trade policy regime, when imports were frowned upon and tightly controlled. Instead of helping domestic industries grow, import restrictions made Indian industry uncompetitive. A few politically connected firms reaped huge profits while their less fortunate rivals and Indian consumers suffered a raw deal.
The economic liberalisation of 1991 swept aside restrictions on international flows of goods, services and capital. Policymakers recognised that a tax on imports penalised exports in a globalising world, since most industries depend on scores of inputs sourced internationally. The reforms of the early 1990s gave wings to several globally competitive firms. A growing economy generated higher tax revenues, helping fund a more generous welfare State and pulling out hundreds of millions from the depths of poverty.
Yet, the siren song of economic nationalism appears to have captivated Lutyens’ Delhi once again. Indian policymakers seem more eager to adopt protectionist tools than their counterparts elsewhere. One reason for the suspicion of free trade in a country that has gained from it lies in our blinkered notions about India’s economic history.
The dominant narrative about India’s economic past has been shaped by polemicists who argue that India was drained of its wealth by British colonialists under the guise of free trade. The proponents of this narrative refuse to engage with the work of serious economic historians who paint a more complex picture of the colonial legacy. For instance, research by the Clark medal winner Dave Donaldson suggests that the investments in railways helped integrate agricultural markets, lowered the incidence of famines, reduced food prices, and raised real income levels (incomes adjusted for inflation).
Any assessment of the British economic legacy has to contend with both its costs and benefits, wrote Tirthankar Roy in How British Rule Changed India’s Economy: The Paradox of the Raj. What critics termed as “drain” were payments for the services of European managers and technicians hired by Indian factory owners, wrote Roy, one of India’s best-known economic historians. The newly industrialised port cities of Calcutta, Bombay, and Madras were among the most cosmopolitan and prosperous cities in the Global South. Indian industrialists were able to tap a global market for talent and capital because the Indian economy was integrated with the British, Roy argued. To be sure, the economic impact of colonial rule was deeply unequal. Rural India did not see large-scale public investments. Nor did the fruits of modern education reach all sections of society. Research by the economic historian Latika Chaudhary suggests that upper castes and the landed elite were able to grab the benefits of public and private investments in schools. Public health interventions in the British Raj were largely directed to protect British officials and elite enclaves. The British administration was unwilling and unable to use public investments to eradicate mass poverty. The colonial legacy is one of big successes and extraordinary failures, wrote Roy. “Openness helped businesses grow and end famines, but did not help much in the resource-poor countryside,” wrote Roy. “Openness benefited men more than women, capital more than labour, and the upper castes more than others.”
Yet, the political narrative around British rule ignores the gains from trade, and the layered colonial legacy. The roots of this blinkered narrative lie in the writings and speeches of two prolific Indian intellectuals: Dadabhai Naoroji and Romesh Chunder Dutt. Neither advocated an end to British rule but their arguments became useful fodder for nationalists. The Congress party was able to use their arguments to make an economic case for the end of the British Raj.
The Swadeshi movement became a powerful tool to mobilise Indians during the freedom struggle. Not everyone was convinced about the economic logic of drain theory even then. The Bengali writer Bankim Chandra Chatterjee refused to accept the theory of drain, pointing to the improvements in living conditions in rural Bengal after the arrival of the British.
Rabindranath Tagore, an early advocate of Swadeshi, eventually became a sharp critic. His 1916 novel Ghare Baire (later made into a film by Satyajit Ray) was a searing indictment of the Swadeshi cult, and the havoc it wreaked on the poor.
Yet, the Swadeshi cult endured. It contributed to India’s inward-looking economic policies in the first few decades after India’s Independence. Even today, all major political parties in the country pay obeisance to the Swadeshi movement. In a 2015 speech at Oxford, Shashi Tharoor of the Congress revived the controversial theory of drain. No one from the Bharatiya Janata Party (BJP) criticised him. Instead, Prime Minister Narendra Modi congratulated him for delivering an eloquent speech.
Exaggerating the harmful role of colonialism may have helped unite a post-colonial nation in its early years. But 76 years after Independence, we need to have a more mature debate on the colonial legacy. Indian audiences have accepted shades of grey in Bollywood villains. Indian voters can be trusted to accept shades of grey in India’s former colonial rulers. A fair-minded assessment of the colonial legacy might help us appreciate the values of openness and cosmopolitanism better.
Pramit Bhattacharya is a Chennai-based journalist. The views expressed are personal
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