Role of history in shaping India’s economic development

  • Blog Post Date 24 February, 2022
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Lakshmi Iyer

University of Notre Dame


As India is now completing 75 years of Independence, two big questions loom over the conversation around India’s economic development: How successful was the Indian economy before and during colonial rule, as compared to the postcolonial period? What is the role of history – historical events, actors, and institutions – in shaping India’s development trajectory? This is the focus of the sixth edition of I4I Conversations, with Bishnupriya Gupta and Lakshmi Iyer.

Gupta and Iyer deliberate on how applying a historical lens may change our conclusions about India’s progress –particularly how demand-side estimates of GDP (gross domestic product) per capita date the beginning of India’s economic decline to a century before British colonial rule. Gupta also discusses the misperception that Indian industrialisation was stifled during colonial rule, how we should evaluate 20th century economic progress in light of the historical evidence, and the long-run effects of historical land-tenure institutions and education policies. Gupta then highlights new areas of research in India’s economic history, including the availability of detailed migration records of indentured workers, and the historical roots of India’s low female labour force participation.


Absolute and relative decline in Indian per capital GDP: The Great Divergence (graph referred to at the 02:26 mark)

Source: Stephen Broadberry, Johann Custodis and Bishnupriya Gupta (2015), "India and the great divergence: An Anglo-Indian comparison of GDP per capita, 1600–1871", Explorations in Economic History, 55: 58-75.

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