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 indez. 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.
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