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Railways During british period Startingitscareeron16

April1853,whenthefirstrailwaypassengertrainwasopened,Indiasrailwaysystemexpanded
rapidlytobecome,by1910,thefourthlargestintheworld.
ThishugerailwaynetworkalteredIndiastransportsystem.Asaresult,transportcostswere
greatlyreducedtherebypermittingnewopportunitiesforprofit.
Regionalspecialisationbegantooccurandtrade(bothdomesticandforeign)flourished.India
becameanationwithitslocalcentreslinkedbyrailtoeachotheraridtotheworld.

1] Railways and markets:Thereismuchresearchexaminingtheeffectsofrailwaysonprice

convergence(Hurd1975,Mukherjee1980,McAlpin1974,DerbyshireinKerr,ed.2007).
Mostofthesestudieslookatmeasuresofcroppricevariationacrossdistricts.Hurd(1975)
comparedaveragepricesandstandarddeviationsofpricesacrossrailwayandnonrailways
districts.Inrailwaydistricts,priceswerelessdispersedandclosertothemeanascomparedto
nonrailwaydistricts.McAlpin(1974)foundthatpricesofbothfoodandnonfoodcrops
convergedasrailway.developmentexpanded.Collins(1999)extendedtheanalysistowages
andfindslimitedevidenceofwageconvergenceincolonialIndia..

2] Railways and Income :

MorrisHurd(1983)wasthefirsttomakeasocialsavingscalculationforIndianrailways.Hurd
assumedthatwithoutrailwaysfreightrateswouldhavebeenbetween80and90percent
higherbasedontheobserveddifferencesbetweenrailfreightratesandthoseforbullockcarts
duringthemid19thcentury.

Hurdestimatedthe:
SocialsavingstobeRs.1.2billionor9percentofnationalincome.Theestimatedsocial
savingsofrailwaysarelargeconsideringthatrealG.D.P.increasedbyaround50percent
from1870to1913(Maddison2004).Inotherwords,railwaysaccountfornearly20percent
ofthetotalincreaseinnationalincome.ThesocialsavingsofIndianrailwaysalsolooklarge.
ComparedtotheU.S.andWesternEuropeancountries.Therethesocialsavingsofrailways
rarelyexceed5percentofnationalincome.However,comparedtootherlessdeveloped
countries,Indianrailwayslooklessimpressive.
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3] PRODUCTIVITY FREIGHTS OUTPUT TheperformanceofIndianrailwayswasquitedifferentbefore

andafter1920.Therewastrendtohigheroutput,productivity,andprofitsbetween1850and
1919,butnotafter.

Whenoutputsgrowfasterthaninputs,productivitymustincrease.And,thiswasindeed
thecaseforIndianrailways,atleastbeforethe1920s.Passengerandfreightoutputgrew
by3.5and4.2%respectivelybetween1881and1939.Bycomparisonroutemilesand
employmentincreasedbyapproximately2.5%overthesameperiod.Outputpermile
morethandoubledfromtheearly1880stothe1920s.PassengerMilesperworkerincreased
by73%from1884to1919.Tonmilesperworkerincreasedby100%overthesameperiod.
Bothleveledoffinthe1920sand30s.Basedontheseseries,Indianrailwaysexperiencedhigh
laborandcapitalproductivitygrowthfromthe1880stothe1910s.Productivitythenstagnatedin
the1920sand1930s.

4]Trends in fares, revenues, and profits

. Freightchargesin1919are21percentoftheirlevelin1884.Faresin1919are43percentof
theirlevelin1884.Therewasareversalintrendafter1919.Freightchargesandfaresroseand
by1939theyhadreturnedtoasimilarlevelastheearly1900s.Itisnotablethatthetrendsin
productivityarequitesimilartofaresandfreightcharges.Railwayscouldchargelowerprices
andstillearndecentprofitsiftheirproductivitywasrising

Thereductioninrailwayfaresandfreightchargespriorto1919hadsubstantialimplications

fortheIndianeconomy.Internationalandinterregionaltradecostsdecreasedsubstantially,
leadingtohigherexportsanddomestictrade.accountingfor65percentofrevenuesonaverage
between1884and1939.Revenuesincreasedbyafactorof128overthe80yearperiod,
implyinganannualaveragegrowthrateof6.2%
.

. Therevenuefiguresalsoprovideanindicationofthevalueofrailwaysservicesrelativetoth
Aswediscussbelow,theliterature.In1901railwayrevenueswereapproximately2.6%of
nationalincome.By1919railwayrevenuesrepresented3.2%ofnationalincomeandby1939
railwaysrepresented4.9%.ThusrailwaysrelativeimportanceintheIndianeconomygrewwith
time.

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5] NATIONALIST VIEWPOINT
ThenationalistsclaimedthatonewayfreetradewasruiningIndianhandicraftsindustry,
exposingittopremature,unequalandunfaircompetition,whiletariffpolicywasguidedby
Britishcapitalistinterests.Throughoutthe19thcentury,Britainenjoyedpositivebalanceoftrade
withIndia.Butatthesametimeithadagrowingdeficitinitsoverallinternationaltrade,which
wascompensatedbyIndianexportsurplusesuptoasignificantextent

TheexportsfromIndiaprimarilyconstitutedagriculturalrawmaterialssuchascotton,jute,

tea,coffee,sugarcane,tobacco,wheat,rice,oilseeds,opium,etc,whileimportsmainlyinclude
clothes,railwayandmilitaryhardware.Thus,IndianeconomyexclusivelyservicedtheIndustrial
revolutioninBritain,whileatthesametimeIndianeconomywasforcedtobeagriculturalbased.
Ironically,theIndiancottageindustriescollapsedatthesametimeastherequiredrawmaterial
wasbeingdrainedtoEngland(Charlesworth,1982

ManyIndiannationalistscriticizedandclaimedthatrailwayshadimpoverishedIndiathrough

theaccompanyinghighertaxesandlesseneddisposableincome,whichdiminishedresistance
tofamine.TheeconomichistorianRomeshChunderDuttcondemnedtheconstructionof
railwaysasawastefulexpenditure.SirArthurCotton,thearchit.

KarlMarxin1853predicted,TheEnglishcompanyintendtoendowIndiawithrailwayswith

theexclusiveviewofextracting,atdiminishedexpenses,thecottonandoectofmagnificent
GodavariandCauveryirrigationworks,stated,WhatIndiawantedwerewaterwaysandnot
railways.Itwasalsoverydifficulttoconvincethecommonpeoplethatajourneybyrailwas
safe.

6]RAILWAYS AND CROWDING OUT EFFECT :

. Therewascrowdingoutofagricultureinvestmentinirrigation.thebestqualityofequipment
fromBritish,thismainlyhelpedtheBritishcapital.OnotherhandinAmericaindigenouslow
cost
equipmentwasused,givingsurplusfundsforothersectors.Andalsocrowdingoutfrom
irrigation.Thereforeathighcostrailwaysdevelopment,capitalinvestmentsufferedinother
areas.

7] RAILWAYS AND FAMINES IN INDIA

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.AmartyaSenhavesuggestedthatthereasonswhyfaminessuddenlyseizedwiththeendof
BritishEmpire(post1947)wasnotsomuchbecausethenationalistgovernmentwasmore
benevolent,butbecausethefreepressandpublicopinionputconstantpressureonthe
governmenttorespondintime(Sen,1982)..

Therewasoveremphasis,inthegovernmentpolicywithrailwaysascontroloffamine.So
supplysidewhichwasthemainculprit,wasignored,investmentinirrigationsuffered.

8]RAILWAY AND COMMERCIALIZATION OF AGRICULTURE:

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IrfanHabibarguesthatBritishersusedcommercializationofagriculture.butthiswasmainlyfor
theirbenefittotransfertherawmaterialstotheportssothattheycouldbetransferredtoBritish
industryLancashireAndhelpintheBritishindustry.Therewasshifttowardscashcrops.Decline
inproductionoffoodgrainsandjowar,bajra.

9]RAILWAYS AND ARTISANS IN INDIA DEINDUSTRIALIZATION

Thedevelopmentofrailways,theyargued,wasnotcoordinatedwithIndiasindustrialneeds
anditusheredinacommercialratherthananindustrialrevolution.Theneteffectoftherailways
wastoenableforeigngoodstooutsellindigenousproducts.Thenationalistsclaimedthat
onewayfreetradewasruiningIndianhandicraftsindustry,exposingittopremature,unequal
andunfaircompetition,whiletariffpolicywasguidedbyBritishcapitalistinterests.

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