The Rise and Growth of National Economic Nationalism

About the publisher:

The book is published by People’s Publishing House, New Delhi. Established in 1947, People's
Publishing House (PPH) is situated in Marina Arcade, Connaught Place, New Delhi. PPH has two
more outlets in Delhi, in Rani Jhansi Road and near Jawaharlal Nehru University's Central Library.
PPH distributed all Soviet books and magazines that were published in USSR. The daily footfall at
their shops was highest in the 70s and 80s, which decreased substantially after the disintegration of
USSR. When the Soviet Union disintegrated in 1991, the books from Moscow stopped arriving.
Today, PPH only has Soviet books from the last stock. The books which have been photographed
belong to my mother and were purchased in late 1970s and early 80s from People's Book House,
Patna. The book is into 782 pages and costs ₹370.00 for paperback and ₹475.00 for hardcover.

About the author:

Bipan Chandra was an Indian historian, specializing in economic and political history of modern
India. An emeritus professor of modern history at Jawaharlal Nehru University, he specialized on the
Indian independence movement and is considered a leading scholar on Mahatma Gandhi.

The full name of this book is ‘The Rise and Growth of Economic Nationalism in India: Economic
Policies of Indian National Leadership. Bipin Chandra was a specialized Indian historian regarding
the Indian Independence movements. He is also known as a leading scholar who researched every
single detail of Mahatma Gandhi. In the history of the modern Indian economy, this book is a
resourceful and important component. This is a reflective book in which a critical view of the Indian
economy is presented. The role of early nationalists and their contribution to shaping the Indian
economy is described in this book. As per this book, the significant economic aspect that led national
sentiment to the level and aspect of modernization can be evaluated. Consequences of economic
nationalism within the Indian economy can be identified and understood with the help of this book.
The book consists 14 chapters, each of which dwells an insight into the economic aspect of the
Indian Nationalism and its mechanism.

Content of the book:

Economic Nationalism, along with economic liberalism and Marxism, is considered among the three
most significant ideologies of modern political economy. Economic nationalism has been
conventionally understood as the economic ideology which favours domestic control of economy,
labour and capital formation. It has been viewed as favouring some sort of autarchy in opposition to
globalisation which visualises interdependence among all nations. To attain its goal, the economic
nationalists are supposed to impose tariff to restrict free trade, to promote indigenous industries and
to seek import substitution.
Domestic control regarding labor, economy and capital formation is an important characteristic of
economic nationalism. This nationalism is considered not to be justified as only the implementation
of related trade policies are associated with and aimed at this concept. The concept of economic
nationalism is the exact opposite of globalization. Believers of economic nationalism are known as
economic nationalists by whom benefits of unrestricted trade are questioned. This ideology favors
protectionism which is necessary for maintaining a safe and sustainable economic condition within a
region. The main purpose of this ideology is to protect the attributes related to a national economic
system that is related to the world market context. As per this concept, all markets are important and
subordinate to every state. The interests of the state are to be served by an equivalent market. The
interests of the state may include accumulating military power and national security.

The grinding poverty of the great mass of Indian people, after more than a century of colonial rule,
was visible to all. The earlier hope harbored by Indian intelligentsia that the British rule in India
would follow benevolent economic policies leading to prosperity had vanished by the late nineteenth
century. Since the 1870s, there had been constant concern about extreme poverty of Indians among
the nationalists. The subject of poverty dominated most public discussions on India by the
nationalists. The nationalists were of the firm opinion that India was going through a process of
industrial underdevelopment under the colonial rule. It was caused by two phenomena, both closely
related to colonial policies – decline of India’s indigenous industries and the failure to quickly
develop the modern industry. This, according to the nationalists, played a big role in the poverty of
the Indian people as the jobs in one sector was lost but not compensated by the rapid growth of the
modern sector. They constantly pointed out the fact that India was once a great manufacturing
country which exported its goods to all parts of Asia and Europe.

Now the situation has reversed and the Indians themselves were forced to import clothes from
Britain. This was ‘one of the saddest chapters in the history of British India’, as R.C. Dutt declared.
Due to this India’s wealth was declining, employment opportunities were drastically diminishing,
and poverty was steadily increasing. The shrinking of industrial employment had led to growing
ruralisation and intense pressure on agriculture which itself was in a precarious situation. This
meant, in Ranade’s words, ‘that we are standing on the edge of a precipice, and the slightest push
down will drive us into the abyss below of unmixed and absolute helplessness’. The critique of the
drain of wealth from India became probably the most popular sentiment in the anti-colonial
nationalist narrative. That the colonial rulers were taking out India’s money leading to country’s
impoverishment was conceived as the biggest economic evil of the colonial regime. Drain was
conceived as unilateral transfer of resources from India to Britain without any corresponding
economic and commercial gain. The venerated nationalist, Dadabhai Naoroji, was the originator of
the ‘drain theory’. In 1867, in a speech, he argued that Britain was siphoning off India’s wealth
which amounted to about 25 per cent of country’s revenue which was ‘added to the resources of
England’. In 1873, he further criticized Britain for ‘ignoring India’s interests, and making it the
drudge for the benefit of England’.
Nationalist criticism of the colonial public finance related to both its aspects - how much revenue
was collected, and how it was spent. The financial policies of the colonial government received great
attention from the nationalists because of it deleterious effect on the resources of the country. They
were very critical of the taxation policies of the colonial government which claimed that the taxes in
India were quite light. It was argued by the government officials that the revenues from land, toddy
and opium were not taxes thus making the tax regime appear light. The nationalists, on the other
hand, argued that all collections by the government from the total annual income of the country
should be considered as forms of tax. They rejected the government claims that India was lightly
taxed, and contended that the tax burden was huge and was reaching its limits. Ranade stated in 1880
that any ‘further increase of taxation must be adjured as political insanity’. Similarly Naoroji bitterly
remarked that the colonial rulers were screwing out more and more taxes, like squeezing a squeezed
orange – inflicting suffering and distress’.

Almost 80 per cent population of colonial India was dependent on agriculture, and revenue from
land formed the largest part of government collection in the nineteenth century. The land revenue
demand was high and it was strictly collected resulting in growing impoverishment of the peasantry.
The nationalists picked up this issue early and insisted that it was one of main causes of recurrent
famines, India’s poverty and decline of its agriculture. Almost all nationalists took up this issue, but
it was R.C. Dutt who developed it into a consistent campaign. The Indian National Congress passed
resolutions on this issue almost every year from 1888 to 1903. Critique of colonial land revenue
policy emanated from almost the entire nationalist leadership. The nationalist agitators objected to:

i) the high pitch of land revenue which took a large portion of agricultural savings, draining capital
away from India, hindering investment in agriculture, pauperizing the countryside and
creating regular famines.
ii) Constant revisions in assessment of revenue creating uncertainty and dissuading the cultivators
to invest in land, leading to stagnation and decay in agriculture.
iii) Periodic raise in revenue demands by the government encouraged the landlords also to raise it
even more in their areas.
iv) Strict collection of rents and revenues from the peasants accompanied by evictions and
punishment. The combined effect of these policies was to drain capital out of agriculture, to
prevent investment in land, decline in the quality of land, pauperization of agricultural
population and the recurrence of famines resulting in large-scale deaths.

Although India had always been participating in international trade, the colonial takeover resulted in
an enormous increase. Both import and export expanded exponentially and the nature of trade
underwent a significant transformation. Until 1813, India had been primarily an exporter of
manufactured goods, particularly cotton and silk textiles, and an importer of precious metals such as
gold and silver. However, in the nineteenth century, it became an exporter of primary products such
as raw cotton, jute, other industrial raw materials, tea, coffee, and food grains, and an importer of
manufactured goods. Another feature of India’s trade became an excess in the value of exports over
the value of imports.
Major Debates and Discussions:

Debate on the ‘poverty problem’ was raised to such a pitch by the nationalists and their sympathizers
that the British officials were forced to respond to them. They initially denied the existence of
poverty and instead tried to paint a rosy picture of colonial rule. But the figures given by the
nationalists, quoting mostly from the official sources, required something more than flat denial.
Several government officials took it upon themselves to provide official apologia by arguing that this
was not the case, and India was actually progressing. However, their arguments did not appear
convincing to the people.

Language Analysis, Observations and Contemporary Relevance:

The language of the book is very lucid and easily comprehendible, excluding some terminologies in
between the running paragraphs. This is an authoritative book on modern India reflected the
perspective of economy by early nationalist and economic leaders, how economic aspect made the
national sentiment towards its modernization, one and only reference book on Indian Nationalism
and Colonial Economy. The bibliography is envisioned very scholarly with a collaborative approach
ranging from western scholars and Indian school of authors.

The world trading system is highly affected by economic nationalism. As per this concept, the goods
of a particular country can be regarded as superior. As a consequence of this ideology, stock prices
are found to be undervalued. Limitations of trade can be beneficial for a country, aiming to achieve a
stable and sustainable economic condition. The term ‘Mercantilism’ is associated with the concept of
economic nationalism. Economy-related policies are found to be customized and developed to gain
expense.

Pedagogical Implications:

 Understanding Economic Nationalism: Theory, History and Prospects

Conclusion:
Economic Nationalism developed in India during the last three decades of the late nineteenth and
the first two decades of the early twentieth century’s. Even though we witness stirrings of such
sentiments in the earlier period also, particularly in the 1840s, it was only in the late nineteenth
century that it fully evolved. It was based on the realization that the British rule was inimical to
the economic interests of India because the economic policies of the colonial government were
geared towards the benefits of the metropolitan country, that is, Britain. The early nationalists
argued that India needed its independent national economic policies which would herald it on the
path of modern industrial development. Through all means available at their disposal –
newspapers, journals, speeches, books, lectures and political agitations – they constantly
campaigned on this issue for almost five decades. Such concerted criticism of the colonial
regime gave rise to an almost unified body of opinions on economic issues among the nationalist
intelligentsia. The result was an unprecedented realization among Indian people, particularly the
middle classes, that India was a territorial unity and that its interests were common. As this
realisation grew over the years, the foundations of Indian nationalism were firmly laid.