The Bharatiya Janata Party (BJP) government has kick-started its second term by setting the ball rolling for “structural” reforms in agriculture, by announcing a task force under the NITI Aayog. The fundamental problem to be solved is that agriculture supports 48.9 percent of the population but contributes only 14 percent to the GDP. This implies a very low standard of living for half the population. As India strives to become a $5 trillion economy by 2024 ($3 trillion today), the challenge is to reverse this trend.
Interestingly, in 1938, roughly 60 percent of the population was agriculture-dependent and policymakers had wanted this number to decline to 50 percent. A hundred years earlier, in 1871, around 90 percent of India’s population was rural. The difference was that in the 1870s, rural India comprised 65 percent of the economy.
It is in this context — of painfully slow change in population dynamics — that India is trying to shift people from agriculture into services and industry. This is why the reflections on India’s pre-modern rural life by historians and economists are still relevant for policymakers. India is modernising at breakneck speed, yet, evidence from the past suggests how difficult it is to restructure a large and old civilisation.
A perusal of different sources shows a strong connection existed in India between agriculture and industry. This link was shattered in the early-to-mid 19th century during India’s interaction with European traders. And, it is the effects of this rupture that Indian governments are still trying to undo.
Consider the noted historian and Indologist AL Basham’s study of ancient India, The Wonder That Was India, published in 1954. He lists Indian goods that were sought after in the West: spices, perfumes, jewels, fine textiles, sugar, rice, ghee, ivory, iron, lac and indigo. Other than live birds and animals (including a “phoenix” — more likely a golden pheasant — imported by the Roman emperor Claudius) and iron all these goods are linked to agriculture. This trade was so profitable that Claudius’s historian, Pliny the Elder, complained about having to pay “so dearly” for India’s luxuries.
These historical trade disputes get a human face in accounts recorded by historian Irfan Habib in his Indian Economy, 1858-1914, published in 2006. Habib extracts from an older source, titled An Inquiry into the Conditions of the Lower Classes in the North-Western Provinces and Oudh, which profiles Hanuman, a 30-year-old weaver, who lived in Manohar village of Uttar Pradesh in 1887-88. It says: Both Hanuman and his wife are weavers. The wife prepares the thread and he weaves and cleans the cloth. “He generally weaves on wages… but also purchases thread at his own cost and weaves it; thus he is never idle during the year.”
The same source profiles a village customer, Chhote, a 70-year-old oil presser: His family owns an oil-pressing unit, deals in money and also does cultivation. Additionally, they “manufacture cotton thread at home and get cloth manufactured by the professional weavers,” earning roughly Rs 10-12.
These are not isolated accounts but the very fabric of Indian rural life from the ancient times to the Middle Age and beyond. A 2009 study by Stephen Broadberry and Bishnupriya Gupta of the department of economics, University of Warwick, found that domestic industry and commerce contributed roughly 22 percent, and services 10 percent to India’s economy in the 1870s. This indicates that the standard of living in rural India fell as its contribution to GDP declined while not enough people were absorbed in non-farm employment.
Rural life in the past did not mean just farming, as Basham has gleaned from inscriptions made during the Gupta era: “The basis of ancient Indian industry was at all times the individual craftsman, aided chiefly by members of his own family, [but] larger manufactories, worked chiefly by hired labour, were by no means unknown.” Thus, even in an empire that ended roughly 1,800 years before Habib’s source, rural artisanal work had a prominent role in supplementing livelihoods.
The caveat is that while historians record the role of communities in everyday economic life, today, the state and the market are supposed to find the solutions. The paradigms are different. That said, the rural family-run enterprise is still relevant and ordinary people grasp this fact intuitively. For example, recently, there was a celebratory mood when the Khadi and Village Industries Commission (KVIC) revealed a surge in demand for its products. KVIC’s sales climbed nearly 30 percent in 2018-19 to reach Rs 3,215 crore — compared to Rs 1,217 crore in 2013-14. It has now set an ambitious Rs 5,000 crore target. Still, it is a minnow in the domestic apparel industry, whose size is estimated at over $50 billion.
Recently, India’s first voter, Shyam Saran Negi, also attested to the economic gains from weaving, spinning and carding during his youth in his spare time. “Mahatma Gandhi told us how our country could eliminate hunger,” the 103-year-old Negi told Firstpost in December 2018. “…we could sell some cloth and keep some cloth and in this way even the very poor would earn a little money. Then nobody would die of hunger.”
It is for policymakers to determine the extent to which the industry-agriculture link can help the state and the market find alternatives to migration. In the past, communities promoted sustainability and self-reliance through institutions such as jajmani. In Studies in the Anatomy of a Transformation: Awadh from Mughal to Colonial Rule, published in 2016, Saiyid Zaheer Husain Jafri, a professor of history in the University of Delhi, notes that jajmani was more than barter; it was a dynamic exchange and division of labour. “The artisan families supplied clothes to pattidars (landowners), who supplied grain to artisans.” In turn, the pattidars paid land revenue in cash and sold their surplus in markets. Artisans also exchanged clothes in the village after selling their wares.
Thus peasants and artisans were engaged in an “unending cycle of production, exchange and consumption, where self-sufficiency itself demanded market relations and vice-versa,” Jafri notes. (Negi, the first voter, also reported bartering his older clothes for money or in kind, until the 1980s. “Thereafter, people started purchasing necessities from the market,” he said.)
To be fair, just because the Maurya Empire (322-187 BCE) owned rural spinning and weaving centers or the jajmani system thrived, does not make it a model for today. Yet, an experimental scheme, the Sansad Adarsh Gram Yojana, launched by Prime Minister Narendra Modi in 2015 showed the potential of such a model. Around 40 women in Jayapur, the PM’s adoptive village in Varanasi, were tutored in spinning, weaving and other local skills. Today, they earn Rs 1,000-10,000 a month, which compares favourably with the Rs 6,000 annual income support (subsequently hiked) to farmers that the central government provides.
Clues to another alternative for policymakers may lie in India’s ‘Golden Age’, the Gupta Empire, which ran from the 3rd Century to 543 CE. A regime strongly marked by decentralisation, it gave rural craftsman critical decision-making roles in administration. “…the decisions of the district officer were made after consultation with a body of leading residents which included the chief banker, the chief caravan leader, the chief craftsman, and the chief scribe,” Basham notes.
Even in the Peninsula, especially under the Cholas, similar councils existed and they could even levy taxes and exercised judicial functions. Tamil inscriptions also show village councils took “active interest in community welfare, dug and renewed reservoirs, made canals, improved the roads and cared for village shrines.”
In short, the shadow cast by rural India was wide and dominated by artisans and merchants, rural and urban. This changed in the 19th century when international markets that had supported economic activity in India declined. Douglas E Haynes, a professor of history at Dartmouth College in the United States notes in Small Town Captialism in Western India, 2012, that Gujarat, Khandesh and the northern Kannada-speaking districts suffered because of a decline in consumption of Indian goods in the Gulf, Red Sea, East Africa and Southeast Asia. (His focus is on the textile trade of that period.)
The trigger for the decline was the worldwide attraction towards cheap goods made in the West, which replaced Indian textiles in Europe. Both artisanal work and workers then shrank, between 1800 and 1850, Haynes finds. He also cites “qualitative” evidence of a resultant severe fall in the standard of living among cloth producers. He refers to a report of the Surat collector in the late 1830s, which states: “Formerly, I believe, upwards of three lakh rupees worth of this description of goods [textile] was taken by government and the purchases of the Dutch and Portuguese factories amounted to about as much more. These outlets…are now closed, and I believe completely driven out of the country market by extensive imports of cloths manufactured in Europe.”
Haynes also reports that Western manufacturers “appropriated” Indian patterns and fashions — such matters still arise in trade disputes, be it Haldi in milk or the appropriation of the pattern of Gandhi’s spectacles.
That the crisis in rural India was a crisis of dwindling artisans, their crafts and related trades, is apparent from an ishtihar or notice issued by Feroz Shah, grandson of the last Mughal ruler Bahadur Shah Zafar, on 29 September, 1857, after the Sepoy Mutiny. Shah lists the trades and professions that were “reduced to beggary” during the British rule. “…the weavers, the cotton-dressers, the carpenters, the blacksmiths, and the shoemakers [have been thrown] out of employ… The British monopolised the trade of all fine and valuable merchandise, such as indigo, cloth, and other articles of shipping, leaving only trifles to people.”
Such a widespread, centuries-old decline is undoubtedly tough to reverse. The paradigms have also changed, to income support, migration and cash crops. Farmers are known to get windfall profits, while some economists argue that distress comes in the wake of cash crops. The service sector absorbs rural migrants aplenty but has left cities creaking — and the share of the population reliant on agriculture is hardly different from the early 19th century. This is why the NITI Aayog’s announcement that rural economies need revival, not just farming in isolation, is heartening news for all supporters of “structural” change.
— All images via Reuters.