IMPACT
OF WORLD WARS ON INDIAN INDUSTRIES
Before the advent of the British in India, Indian industry had a global
presence. It accounted for almost half of World’s Industrial output. Cotton,
Silk, Artistic ware and Woolen Cloth were mainly exported. The British Policies
and the Industrial Revolution in Europe led to the downfall on handicraft
industries in India. One of an unwanted result of the decline of handicraft
industries was that it do not resulted in the rise of the modern industries in
India. Unlike in Europe, the downfall of small scale industries was not
followed by the rise of large scale industries in India.
The First and Second
World Wars was disastrous however it was revival for Indian Industries. The war
created new economic and political situation. Till the First World War,
industrial growth in India was slow. However, the Wars created a dramatically ‘new
situation’. Manchester imports into India declined due to the wars. The British
factories became busy with producing things needed for the army. Indian mills
now suddenly had large market to supply. The long war made the Indian factories
supply them with the jute bags, cloth for army uniforms, tents and leather
boots, horse and mule saddles, and a host of other items. Many workers were
employed for longer hours.
After war Manchester
goods lost their hold on Indian markets. British economy collapsed as it could
not compete with the USA, Japan, and its European rivals. The Indian industrialists
captured the local market. Small scale industries prospered. Thus, the wars
were not only responsible for creating new situation for Indian Industries but
also for Indian independence since the economy of the British collapsed due to
the wars.
Indian industries made
rapid strides during the First World War (1914-18) due to rise demand for
industrial goods by the Armed Forces. The textile industry gained a lot as a
result of the war. On the eve of the war, India had emerged as the fourth
largest cotton manufacturing country next to the USA, the UK, and Japan in that
order. Jute industry on the other hand concentrated in the Hugli basin only.
However, the number of Jute Mills rose from 64 in 1913-14 to 107 in 1938-39.
Industries
in the Inter-War Period (1919-38)
No country under
colonial dependence could undertake any industrial transformation, if not
all-round development. Up to the First World War, India experienced the classical
period of imperialism of free trade and the British Government’s unsympathetic
hostile policy against industry.
In addition, shortage
of capital, management experience and technical expertise, as well as the
absence of a growing indigenous market and above all, general poverty caused
slow expansion of Indian Industries. Even then, one can conclude that during
1850-1914, the foundations of modern industries were laid in India. The
outbreak of First World War show that India was deprived to developed the most
elementary basis of modern industry. The British granted some political and
economic concession, particularly future industrialization during the War and
immediately after the war.
However, during the
war-period, Industries like cotton and jute made headway. Steel industry also
experienced substantial growth. Consumer goods industries like chemicals,
cement, fertilizers, mineral acids, etc, etc., for which India depended on
foreign countries, also progressed during the war. The prosperity of Indian
industries did not last long and promises made by foreign ruler remained unaddressed
as usual. Indian industries in the mid-1920 demanded protection in an
unwavering manner. To this end, the Fiscal Commission was appointed in 1921
that ushered in a policy of discriminating protection.
But the end result was
rather a haphazard development of certain industries and not general economic
development as such. In 1936, the ‘Economist’ observed India’s
industrialization effort: ‘Although India has begun to modernize her
industries, it can hardly be said that she is as yet being industrialized’.
On the whole, during
the inter-war period, output of cotton piece goods, steel ingots, paper, etc.,
increased substantially. Many other industries also progressed even in terms of
employment and the number of factories. But as far as diversification was concerned,
it was indeed slow and the state of transformation of the economy was only
‘marginal’.
Industries
during 1939-47
While Indian Industry
prospered during World War I, the Second World War created problems for Indian
industry as India actively participated in war and the Japanese brought war in
Indian doorstep. However, the impact of the war was short-lived and the
industry was quick to recover from the initial shock and exploited the
opportunities offered by the war. A programme costing Rs. 4 crore for the
manufacturing of armaments and explosive was launched in1941 to meet the
immediate requirement of war. The ordinance factories started producing 700
varieties of ammunition. There were pressing demands to meet the civilian
requirements too.
With this object in
view, heavy chemical industry was started in 1941 and the production of sulphuric
acid, synthetic ammonia, caustic soda, chlorine and bleaching powder commenced.
The Hindu Aircraft company also assembled its first aircraft in 1941. Even
though there was a setback in some industries, there was a huge gain in Steel,
chemicals, cement etc. Cotton textile industry also showed considerable
improvement. However, jute and sugar industries suffered decline.
The Second World War
however opened a new phase in India’s industrial history. As the character of
the World War II was different from the First, the latter created a far more
urgent and intense demand for the rapid growth of India’s basic and key
industries. Against the back drop of this favored ambience of Industrial
development and the near-cessation of imports due to war operations, Indian
industries somehow came to take pleasure in having a quasi-monopoly situation
in the home market.
As a result, not only
industrial output of large scale industries expanded significantly, but also a more
widening of the industrial diversification became possible during the war-time
years. During 1938-39 and 1945-46, the general index of output of all large
scale manufacturing activity.
Despite this headway,
India’s manufacturing before impendence displayed many frailties. Firstly,
India did not posses capital goods industries worth the name. This, therefore,
hampered her potentiality to reproduce its existing productive capacity.
Secondly, import dependence of the Indian manufacturing sector was enormous.
Thirdly, possession of technical skill and institutes offering technical
education were virtually negligible. Industrial development is largely
conditioned by the stock of ‘human capital’- the stock of scientific and
technical cadre. India was still a country denied to grow by the apathetic
foreign government.
However, the prospect
for industrial development in India after independence must not be undermined
as she had already constructed enough possibilities for Industrial development.
Thus, even though the
growth rate of Industries in India was not at a fast rate, the World Wars
brought changes on the situation of Indian industries which encounter a ‘pause’
in growth rate. The World Wars were even responsible for the independence of
India as it led to the collapse in British economy. Even though the
independence of India was due to the National movement, however since Revolt of
1857, it couldn’t be a success. However, the collapse of the British economy
was the main reason that enable for India to attain its independence.
Majority of this
article is modified from the site ‘Historydiscussion’ as the main theme for my
small project was how the World Wars impact Indian Industries.
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