Historical Roots of Industrialisation and the Emerging State in Colonial India

Abstract

Following a clear shift towards economic liberalisation in the 1980s, Indian economy has grown remarkably. One of the driving forces is the three-decade long expansion in the activities of private industrial enterprises, whose origins date back to the colonial era. Some activities even reached global standards in terms of production and employment, although the overall industrialisation level was far from sufficient. This chapter reviews the colonial India's industrialisation, focusing on its stagnated nature and three known hypotheses on the causes of the stagnation; the factor endowment hypothesis; the laissez-faire economic policy hypothesis; and the sluggish technical transfer hypothesis.