In what can be described as how destiny turns tables around, India has now overtaken the United Kingdom, its erstwhile colonizer, as the fifth largest economy in the world (after USA, China, Japan & Germany). Whats more, this gap is expected to widen, as India is estimated to grow at six to eight per cent per year compared to UK’s expected growth of one to two per cent until 2020.
This dramatic shift has been driven by India’s rapid economic growth over the past 25 years as well as Britain’s recent economic woes, particularly caused by Brexit. Once expected to overtake the UK GDP in 2020, the surpasso has been accelerated by the nearly 20% decline in the value of the pound over the last 12 months. As per various reports, UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1. Even if we take into account the currencies fluctuating that will modify these figures to rough equality, there is no denying that India’s economy has surpassed that of the UK based on future growth prospects.
This marks a significant landmark in India’s economic history, whose story over the last 200 years is full of being looted, first by the British empire and later on by the Socialist politicians and bureaucrats post independence. The British empire stripped its “jewel crown” of every available resource, natural , manpower or otherwise, funding everything from its industrial revolution to its various wars (from the various battles it fought with the Dutch, Portuguese, French , and the Boers to the two huge world wars). This period of loot, plunder and rape of India comprises the years from the fall of the Maratha confederacy (the last remaining power in India that they took nearly a century to subdue) in early 1800s to India’s independence in 1947 when the UK’s growth significantly outpaced India’s, since Britain enriched itself at the cost of its colony, making India one of the poorest nations in the world in less than four generations while itself becoming the apex colonizer in the world, who at its height ruled over one fourth of the world. Everything that Britain did for India’s development during this time ( as the Raj romanticizers keep telling us that British Raj brought India development and stability) was just a bare minimum of what was required to keep the empire intact. Railways were made for quick mobilization of troops to quell any revolt, post offices made for keeping the empire bureaucracy connected, a limited number of colleges were made to nurture a whole generation of coolies, Indian in appearance but English in tastes and loyalty. It was the subsequent generation of coolies who kept the empire running via proxy (the number of British personnel in India never surpassed 100000, even at the zenith of the raj) and it is to these coolies that the power was transferred in 1947. They still survive as India’s intelligentsia, media and the so called elite, and by and large still carry the colonial conditioning.
All who credit the British for building those few dozen colleges ignore the fact that they destroyed all the village schools and cottage industries in the matter of a few decades, for one simple reason:- they wanted a populace of menial labourers, not literate people from the villages. There was absolutely no attempt made to bring any kind of development in the villages, for that matter they were deliberately kept in the dark.
As for the claim of them bringing social reforms, its nothing but a hoax. Infact the British destroyed the women’s right to property in India, and therefore the dowry which was meant to be gift to the bride from her parents, was instead seized by the husband and other male members of her family, and henceforth wedding became just another business deal and the bride seen as a source of income. The woman also lost any share of her ancestral property. Tax collectors under the erstwhile kings were given private ownership of land and were made Zamindars, to loot the peasants for the maximum amount of tax. And of course there is that famous lie of Willliam Bentick abolishing the Sati to reform the evil Hindus. As if the Governor Generals were saints!!
Also swept under the carpet are the losses of millions of lives due to the structural violence unleashed by the East India Company which destroyed large areas of food crops to make way for the growing of indigo plants for dye and opium poppies for the production of psychoactive drugs (Most of the opium used by the British to cripple China’s youth to render them incapable to fight was grown in Bengal) . In case of Bengal in 1770, it increased the tax on agricultural produce from 10% to 50%, transferring much of Bengal’s wealth to the company’s shareholders., via various famines caused by forcing the growing of cash crops even on agricultural lands that were meant for foodcrops. The Bengal famine of 1770 killed 10 million , the famine of South India 1876-78 killed 5.5 million , Bundelkhand in 1896-97 killed 1 million. The Bengal famine of 1943 killed 4 million people because the British seized control of all food reserves to feed their troops fighting the Axis in Europe and North Africa.
To give an idea of how massive these figures are, the population of undivided India during 1946-47 was 350 million.
But the very notion that the British empire was solely responsible for India remaining poor is avoiding responsibility for our own follies and selfishness. India adopted the disastrous closed, centrally planned, socialist economy (which was primarily based on the Soviet model) due to Nehru’s admiration of Soviet Union which began during his visit there in 1927. The entire political class saw multinational companies as the successors of the East India Company, and hence stressed a protectionist, socialist, bureaucratically controlled economy full of barriers and tariffs. This horrid choice prevented a bruised India from any sort of recovery and condemned it to more than four decades of stagnant , ill being. Add to that the rampant corruption and red tape and the horror story is complete. Countries like Malaysia, South Korea and China, which were much poorer than India, got a headstart of 10-15 years wrt India in economic reforms. The result is for everyone to see, with India still languishing at the bottom in any kind of human development index. The amount of resources that India spent on its perpetually ill public sector is astronomical, and had they been utilized nicely , it would have been a prosperous country today with education and housing for all. The period of stagnation extended from 1947 to 1991 (called the Hindu rate of growth , when actually it should have been named as the Nehruvian rate of growth) where both India and the UK grew at roughly the same rate, even inspite of India being under the license permit raj.
Had India adopted for a free market economy in the 1950s than the disastrous Nehruvian model, India would have surpassed the UK economy by the 1970s, instead of taking forty more years for the same.
The last and the most refreshing part of the period of the last 200 years began in 1991, when India abandoned its license permit raj and finally implemented market reforms, and continues to this day. During this period India has experienced much faster economic growth than the UK and has finally in 2016 overtaken it in absolute terms, although is still less than one-fifth that of the UK in per capita terms. It will not be an exaggeration to say that 1991 is when Indians found true freedom, when they gained an upper hand on their own ruling class that was keeping them from becoming prosperous and making them wait in queues for daily necessities, making them wait for seven years to purchase a scooter or to get a telephone connection, to make do with shoddiest of consumer goods.
We can see from history that milestones are important in changing the present trends and scenarios on their head, and usher in a new world, as well as encourage people to shed their biases. Japan’s victory over Russia in 1905 is a huge example: It proved that an Asian nation could militarily defeat a western power , and also highlighted the economic rise of Japan that had gradually taken place over the second half of the 19th century.
India ’s overtaking of the UK ’s GDP in 2016 could serve as a similar moment.
This milestone has three important implications:-
First, it highlights India’s arrival on the global stage and a significant change in power dynamics between India and the west. The effects of this are already being witnessed in India’s repudiation of a trade deal with the UK, where it stood firm to demand more favorable immigration for Indian nationals.
Second, it should be a signal to India to shed any remnants of colonial inferiority , develop a more open mindset and look at alternative nations to emulate, and to understand that the west is not the only benchmark for progress. Look east policy can be of great help here, as India can relate to Asian countries model much better for its own economic growth.
Lastly, it should spur India’s efforts towards furthering market reform given that India’s per capita GDP is still less than one-fifth that of the UK, highlighting the tremendous scope for further improvement. This milestone is not a laurel to rest on, it’s an clarion call to build and progress the economy at a war footing.