Purba Roy Choudhury 1

ECONOMIC
HISTORY OF
INDIA
Semester V, Discipline Specific Elective, DSE -5-1A
Unit 2: Aspects of Economic Policies in British India
Unit 2.5: Development of Infrastructure: Transport
System_Railways
Purba Roy Choudhury
purba.roychoudhury@thebges.edu.in
The Bhawanipur Education Society College, Kolkata

08-02-2021
Railways vs Irrigation
◻ Actually one does not find a relationship between
irrigation and railways.
◻ But so far as the period of discussion is concerned,
these two had an intimate connection because both
these crucial infrastructures assumed the position of
rivals.
◻ It was argued by each group that both irrigation and
railway works stood as the best insurance against the
recurring famines.
◻ In view of this, each of these demanded special
allocation of financial resources
Railways vs Irrigation
◻ Public expenditure on irrigation received the
top-most attention of the Hindu and Muslim rulers
in India.
◻ After all, the British government did not
completely neglect the development of this critical
infrastructure as far back as the beginning of the
19th century.
◻ But as time rolled on, there had been a U-turn in
the policy ofo the British Government.
◻ It decided railways as the biggest sanctuary of
British Government and irrigation took a backseat.
Railways vs Irrigation
◻ Indian leaders treated irrigation as the Cinderella of the
regime- Marx in 1853 noted that the British in India
completely neglected irrigation and hence resulted the
deterioration of India’s agriculture which was incapable
of being conducted on the edifice of laissez faire
principle.
◻ Though priority was given to the railway construction
over the construction of canals, railways were not
developed in India, as in England, Germany or Japan,
to foster industrial development.
Railways vs Irrigation
◻ Frankly speaking, political necessity as well as
strategic considerations and commercial advantages
supplied the main impulse.
◻ So far as the improvement of the market was
concerned, railway expansion was preferred to
direct expenditure on agriculture and irrigation
Railways vs Irrigation
◻ The Tribune (Lahore) paper remarked on 24 July,
1900 very aptly on the need of irrigation projects to
railway projects: “The truth is that the policy of
extending railways had been pursued by our
government more for their administrative benefit
and their importance of the European commercial
classes than with a view to their effect in reducing
famines, though the latter may have been a
secondary consideration”.
Railways vs Irrigation
◻ At the closing years of the 19th century and the
early years of the 20th, there was a controversy as to
whether railways or irrigation should be given
priority in public works policy.
◻ R.C. Dutt, an early bourgeoisie nationalist, in his
Economic History of India in the Victorian Age, set
the pattern of nationalist criticism and raised the
famous railways vs irrigation controversy.
Railways vs Irrigation
◻ In a rhetoric fashion, Indian view had been summed
up by G.K. Gokhale: Are railways all? Is irrigation
nothing?
◻ The official view was that railways helped the
movement of food grains from surplus to deficit
regions during scarcity.
◻ Thus it played no main role in providing insurance
against the ravages of famines.
Railways vs Irrigation
◻ But Dutt and other Indian economic historians
argued that while pursuing laissez faire policy, the
Government undervalued the importance of
irrigation which proved too costly for an
agricultural country like India.
◻ R.C. Dutt pleaded more for an expansion of
irrigation than to the railways.
Railways vs Irrigation
◻ Railway construction in India fitted very well into the
clear cut intention of the British Government of
subordinating India so as to serve the interests of
Britain.
◻ Dutt unequivocally argued in 1901: “the railway system
does not add one single blade of corn to the food supply
of the country, while irrigation works double the food
supply, save crops and prevent famines.”
◻ His criticism centred around “unwise extravagance” in
regard to railways and “unwise niggardliness” in regard
to irrigation.
Railways vs Irrigation
◻ He argued that the Government of India was
considerably influenced by the capitalists, speculators
and manufacturers and not by the opinion of the people
of India.
◻ Indian manufacturers were interested in opening and
widening of markets in the far-flung regions by means
of railways extension.
◻ Like a true bania, the Indian administration at that time
calculated its relative earnings from investment in
railways and irrigation purely from a commercial angle.
◻ The country’s interests were relegated into the
background.
Railways vs Irrigation
◻ Between 1900-1901 and 1913-14, gross investment in
railways increased from Rs. 83.7 million to Rs. 230.6
million while irrigation figures rose from Rs. 24.1
million to Rs. 48.4 million.
◻ But the corresponding benefits from irrigation were
more pronounced.
◻ Dutt remarked that with a State guarantee of profits in
the range of 4.5% to 5% on outlay in the building of
railways, the Treasury suffered a loss.
◻ For as far as irrigation was concerned, the government
pocketed a net gain after interest charges on capital
spent in construction
Railways vs Irrigation
◻ Indian leaders preferred irrigation to railways as the
former was considered to be more effective in tackling
famine conditions than the latter.
◻ Further, irrigation was more profitable than railways.
◻ Above all, irrigation was far more effective in creating
employment opportunities for the Indian people as most
of it were spent in digging wells, canals, etc., while the
expenditure on railways benefitted mainly foreign
countries which suppled the necessary equipments.
Railways vs Irrigation
◻ Nationalists believe that given purchases made
abroad for government stores in India (an important
component of Home Charges), obviously the
railway plans constituted a great leakage of wealth
from this poor country.
◻ Railways were partly responsible for the
destruction of handicrafts industries.
Railways vs Irrigation
◻ So the controversy boils down to an important
question: Had scarce capital resources been
efficiently utilised?
◻ Gokhale remarked that in a colonial setting a
sub-optimal allocation of resources was ‘bound to
appear’.
◻ And, in the process, an indefinite expansion of
irrigation had not been carried out.
Railways vs Irrigation
◻ But the foreign government had a different game
plan.
◻ The objectives in the minds of the authorities, both
in England and India, were strictly commercial and
political.
◻ In other words, the debunking of irrigation was the
product of British selfishness and the deep-rooted
productivity of foreign rulers to annihilate the
Indian interests in order to placate and serve the
interests of the British people.
Railways vs Irrigation
◻ Nationalists went on saying that railways did paly
an important role in imparting colonial character to
the Indian economy.
◻ Priority was thus given to railway construction over
irrigation, “because the former facilitated British
trade in India, whereas the latter benefited
agriculture, for which the British trader had little or
no conecrn.”
Railways vs Irrigation
◻ But railways undoubtedly played a major role in
the country’s economic development.
◻ It led to increased agricultural output.
◻ Once India entered the “railway age”, some modern
industries began to develop.
◻ The railway system became the ‘forerunner’ of
limited industrial development.
◻ Of course, India had to pay some “price” for such
industrial progress.
Railways vs Irrigation
◻ Now an important question – a pertinent one - arises.
◻ In this colonial world, had the country been not
equipped with railways instead of irrigation, what
course could the Indian economic development take?
◻ However, this is an purely ideal speculation since each
had its special advantages and disadvantages.
◻ Above all India’ s destiny was tied to the British world
as she were here the main prop of colonial furtherance.
◻ Actually, the implicit objective of the British
government was that what was good for England was
good for India
Railways vs Irrigation
◻ To run the wheels of industry in England, she badly
needed raw materials and the vast materials to dump
her machine- made goods.
◻ For instance, the raw material of the cotton industry –
mainly an export industry – was essentially colonial.
◻ Among her colonies, India was the most important as
well as profitable one.
◻ If she had no other colonies to market her industrial
goods or sources of raw materials for British industries,
she would not have shown deadening indifference
towards irrigation.
Railways vs Irrigation
◻ Had India been the only colony of Britain, the British
government would have ventured for large and more
irrigation projects for increasing both food crops and
non-food crops as these were in demand there.
◻ Unfortunately, these crops poured into Great Britain
from her other colonies.
◻ Thus the historical need for irrigating Indian soil did
not arise.
◻ Without going into the advantages and disadvantages of
these two crucial sectors, one can say that imperialist
logic played a dominant part in this drama and most
obviously railways got the role of a hero.