Table Of ContentVijay K. Seth
a n u facturin
M g
n
a
di
n
The Sto r y o f I
Encounters with
the Mughal and
British Empires
(1498–1947)
The Story of Indian Manufacturing
Vijay K. Seth
The Story of Indian
Manufacturing
Encounters with the Mughal and British Empires
–
(1498 1947)
VijayK.Seth
FacultyofManagementStudies
UniversityofDelhi
NewDelhi,India
InternationalManagementInstitute
NewDelhi,India
ISBN978-981-10-5573-7 ISBN978-981-10-5574-4 (eBook)
DOI10.1007/978-981-10-5574-4
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Totheprincessofthestoryofmylife,Arpita
P
REFACE
Historyinformsusthatmostoftheeconomiesoftheworldthatwereableto
sustain long-term and consistent higher rates of growth, and were able to
transformthemselvesfromthestatusofunderdevelopedtodevelopedecon-
omies,haveexperiencedrevolutionintheirmanufacturingsector.Therevo-
lutionary changes that occurred took place during what is known as the
Industrial Revolution. Development in the manufacturing sector provides
conditions,wheneconomiesdevelopcapabilitytocreateunlimitedamounts
ofwealth.Themanufacturingsectoralsofacilitatesthetransferofmanpower
fromfarmingtomanufacturing.Thetransferofmanpowerresultsinhigher
standards of living. It is now being increasingly realized that the nature of
development and efficiency of other sectors also depends on the level of
growth of the manufacturing sector of the economy. It is due to these
importanthistoricalfacts,thatintheliteratureoneconomicsofdevelopment,
industrializationanddevelopmenthavebecomecoterminous.
The process of this kind of transformation initially occurred in Britain,
and then it spread to different economies of Europe and America. After
World War I, it spread to the U.S.S.R. In the recent past, this kind of
transformation has been experienced by the economies of Japan, South
Korea and China. However, the Indian economy has yet to receive the
gainsfromthiskindoftransformation.
It is quite an important historical fact that even before the birth of the
IndustrialRevolution,Indiaproducedaroundtwenty-fivepercentofglob-
allytradedmanufacturedgoods.Thistoowiththehelpofsmallhousehold
workshops, where craftsmen worked with hand tools. India experienced
vii
viii PREFACE
de-industrialization after 1750. Since then, India has never been able to
achievethestatusofanimportantmanufacturingnationoftheworld.This
has happened, despite the fact, that it has a well-diversified manufacturing
sector. The Indian economy has in fact deviated from the empirically
accepted path of development, which has been established by several
scholars. This historical paradox motivated me to explore the puzzle of
how a country that produced high quality handicrafts, which were traded
inexchangeofbullion,losttheraceofbecominganimportantmanufactur-
ing nation of the world. It was quite obvious to me that the roots of this
paradoxlieinthepast.
The present work is an outcome of my intellectual journey, which I
undertook to seek an answer to the problem. My journey was made quite
comfortablebythepathclearedbythescholars,whohavemadecontribu-
tionintheareasofhistory,historyofbusiness,economichistory,historyof
technology,sociologyandeconomictheory.Thisscholarprovidedmewith
awell-laidpath,withenoughlighttoguidemetomydestination.
However, so many times I felt I was walking alone in darkness. The
isolationsometimescreateddoubtinmymindastowhetherIwasfollowing
acorrectpathornot.Insuchsituations,toknowtheappropriatenessofmy
path, I shared my ideas with other scholars by writing about my under-
standing about different issues in professional journals. In the course of
writing the present work, I published three papers, which were based on
certainportionsofthechaptersofthepresentbook.Thesepapersappeared
in the Journal of Management Research and Global Business Review. The
feedbackthatIreceivedfromfellowtravellersgavemeconfidencethatIam
followingthecorrectcourse.
I do not claim that I have created an original account of the story of
Indian manufacturing. What I have attempted here is to place the facts
aboutIndianmanufacturing,whichwerespreadacrossdifferentdisciplines
ofthesocialsciences,intooneplace,inaframeworktodevelopthestoryof
Indianmanufacturing.Nowthebookisinyourhands,andIhopeyouwill
enjoyreadingit.
New Delhi, India VijayK.Seth
A
CKNOWLEDGEMENTS
I have been working on this book for almost seven years. In the course of
writingthebook,Ihavebenefitedimmenselyfromthewritingsofsomeof
the great scholars. Their writings have both stimulated new thoughts and
understanding, and have provided a new direction to my work. Here, I
would like to mention the writings of Professors E. J. Hobsbawn, David
Landes, Maxine Berg, William Lazonick, C. F. Sabel, M. J. Priore and
AndreGunderFrank.
Iwillalsoliketoplaceonrecordthecontributionofmyteachersatthe
Delhi School of Economics, Professors Dharma Kumar, J. Krishnamurthy
and Om Prakash, whose writings and lectures on economic history have
provided initial advantage to my exploration on the subject. I have also
learnt a great deal from the writings of economic and business historians,
whohavemadesignificantcontributionstotheliteratureonIndia.Writings
of some of these scholars have impacted my study significantly. These
scholars are Professors Burton Stein, C. A. Bayly, Morris David Morris,
Irfan Habib, Sanjay Sumbramanyan, Rajat Kanta Ray, Trithankar Ray,
PrasannanParthasarthiandDwizendraTripathi.
Thequalityoftheworkimprovedsubstantiallyfrommyinteractionswith
ProfessorsK.L.Krishna,J.P.S.Ubroi,B.N.GoldarandRaghavGaiha.
IwouldalsoliketoacknowledgethebenefitsofvaluablecommentsthatI
received from my colleagues at the Faculty of Management Studies of the
University of Delhi, where I completed a major part of my study. Here I
wouldliketomentionthenamesofProfessorsJoyMitraandVivekSuneja,
DrsHarshVardhanVerma,AmitBandhanandPankajSinha.Iwouldalso
ix
x ACKNOWLEDGEMENTS
liketoplaceonrecordthecontinuousencouragementandmotivationthatI
receivedfromPadmaShrirecipient,ProfBakulDholakia,DirectorGeneral
ofIMI,whereIamworkingatpresent.
I am also grateful to the librarians of the Ratan Tata Library of Delhi
School of Economics; the Institute of Economic Growth, Delhi; Central
LibraryoftheUniversityofDelhi;JawaharlalNehruUniversity;Facultyof
Management Studies, University of Delhi; and International Management
Institute,NewDelhi.
I am also indebted to my brother-in law, the late Prof B. B. L. Sharma
whokeptonmotivatingmetofinishthebookassoonaspossible.Maybehe
knewthatduetodelaysinwritingofthisbook,hemightnothavebeenable
to read it before he went on his heavenly journey. I would also like to
mentionthecontributionofmynephewMrPankajVianayakSharma,who
quietlylistenedtovariousfactsthatIhavementionedinthebookregarding
variousaspectsoftheeconomy,societyandpolityofIndia.
I will fail in my duty if I do not mention the name of my doctoral
students, Bharat Singh, Ritu Solanki, Lubina Zaidi and Prushottam Arya,
whohelpedmeinseveralways.
Finally,Iwouldliketomention that despitethe availability ofallafore-
mentioned resources , this book would not have been completed without
the quiet contribution made by my wife, Meera Seth. I am also equally
grateful to my daughter, Arpita Seth, who not only brought immense
happinessinmylife,butalsogavepurposetomyexistence.Iamdedicating
thisbooktoherbecauseitisonlyrecentlythatIhavebeguntorealizeher
importanceinmylifewhensheleftmyhouseholdtolivewithherhusband
VishalSaxena.
VijayK.Seth
C
ONTENTS
1 Introduction 1
1.1 TraditionalFlexibleManufacturing:BeginningtheStory
ofIndianManufacturing 4
1.2 TraditionalFlexibleManufacturingandtheMughal
Empire 7
1.3 TransformationofTraditionalFlexibleManufacturinginto
ModernManufacturing 10
1.4 TraditionalFlexibleManufacturingandtheEastIndia
Company 12
1.5 SpatialSpreadofModernManufacturing 15
1.6 AlternativePathstoDevelopModernManufacturing 20
Bibliography 27
2 TraditionalFlexibleManufacturingandtheMughalEmpire 31
2.1 EconomicEnvironmentofManufacturingDuringthe
MughalEmpire 35
2.2 CompositionofManufacturingDuringtheMughalEmpire 45
2.3 TraditionalFlexibleManufacturingDuringtheMughal
Empire 52
Bibliography 67
xi
