Punjab’s economic loss from the 1947 independence and partition


Last month, there were celebrations of the 75th anniversary of India’s independence. August 1947 is indeed a month of celebration in India for liberation from British colonial rule (on 15th August) and in Pakistan for the birth of a new nation (14th August). However, for Punjab and Bengal, this memory of celebration is mixed with the one of pain caused by the partition of these two states that led to deaths of about one million people and injuries to several millions. The psychological scars of bereaved and broken families are so deep that they run into many generations since then. The economic damage caused to Punjab by the partition further accentuated the social and emotional sufferings. The 1947 partition had such a colossal impact on the economy of Punjab that any account of that impact would be an underestimate. Some dislocations in the economy, such as those caused by a progressive technological change, can have positive impacts on improving human welfare while others, such as those involving violent conflicts, have negative impacts. The dislocation caused by the 1947 partition was a man-made tragedy that have had long lasting negative impacts on human and non-human lives, and the ecology of Punjab.

Before the British colonial rulers who divided Punjab in 1947 had annexed it in 1849, its economy was regulated by its internal logic that was dictated by the economic, political, social, and military strategies of its Punjabi sovereign ruler Maharaja Ranjit Singh. After its annexation and its integration into the larger Indian territory under British control, that internal logic came to end, and Punjab’s economy started being shaped by the external logic of the British imperial rule.

Within a few decades of the consolidation of the British rule in Punjab, the colonial administration initiated an ambitious programme of canal irrigation networks in Punjab. This came to be popularly known as the Canal Colonies programme, because it involved the settlement of the Punjabi peasants from the East Punjab into the areas of West Punjab where the canal networks had been developed. Soldiers retiring from the army were given land grants in these colonies. These soldiers came predominantly from a peasant social background, and these land grants were seen both by the peasants and the colonial administration as the best economic award for military service to the Empire. The development of these irrigation networks and canal colonies was one of the most impressive developmental projects that the British Empire had undertaken in India. The colonial administration had three interlocking aims behind this massive project: (i) to increase the agricultural output for the maximising of land revenue returns; (ii) to facilitate military recruitment from the peasantry by making military service an economically attractive route to land acquirement; and (iii) to create a loyal political base in the countryside for the British rule. This politico-economic development strategy generated long-term favourable conditions for an agriculturally oriented pattern of development in Punjab. One American scholar Richard Fox has called Punjab’s agriculture “mainly a colonial manufacture.” (R Fox, Lions of the Punjab: Culture in the Making)

The implications of this British strategy for Punjab’s agriculturally-oriented pattern of development become clearer if we compare this strategy with that adopted in some of the coastal provinces, such as the Bombay Presidency (the present Maharashtra, Gujarat region), the Madras Presidency (the present Tamil Nadu region), and the Calcutta Presidency (the present Bengal region), which favoured some degree of industrialisation in these regions. This was also a fine example of an externally governed politico-economic strategy having a crucial impact on changing the internal development pattern of a region. It demonstrated the power of the State in engineering a development path. The development path initiated by the colonial rule in Punjab had contradictory features: it led to highly advanced agriculture and the neglect of non-agricultural sectors.

The West Punjab after the partition was a dominant economic player in the governance of Pakistan while the East Punjab had a relatively low bargaining power in India’s governance but in both states, the agrarian-oriented development initiated during the colonial period had created enormously powerful agrarian interests who were inimical to industrialisation of the region. The externally oriented development path in East Punjab manifested in a new form after partition when the powerful Centre initiated a new agrarian strategy named as Green Revolution strategy in the state in 1960s to meet the Centrally decided national objective of national food self-sufficiency. This strategy increased rural incomes in the initial years but devastated the quality of life caused by the environmentally damaging impacts of this strategy on Punjab’s land, water and air.

The partition inflicted further blows to the weak industrial sector of Punjab. The Indian Punjab at the time of partition in 1947 was, in comparison with many other Indian states, an industrially backward region. As a result of the partition, the already existing industry experienced massive disruption. The Statistical Abstract of Punjab 1947-50 captured the disruptive impact of the partition on the industrial labour force, factories, raw materials and markets. It pointed out that “the Muslim artisans who migrated to Pakistan contributed almost 90% of our skilled labour. Most of the factories and workshops, as well as small and cottage industries had to close down. A number of famous industrial institutes were lost to us, let alone the loss of raw materials and markets.” The dislocation of the banking facilities adversely affected the availability of finance capital for industry. This further accentuated the disruptive implications of the partition for Punjab’s industry.

Amritsar, the premier city of Punjab, which was known for its once famous textile and woollen industry took the biggest hit due to the change in its economic status after partition. Instead of being a centrally located city as it was in the pre-partition Punjab, it became a border town after the partition. Its old industrial glory manifests now mainly though its Pashmina Shawls due to the continuous demand for them from the religious and business visitors to the city. The 1984 Punjab-Centre conflict has taken a further toll on Amritsar’s premier place as the most populated city in Punjab. It now takes a second place to the industrial city of Ludhiana in the population hierarchy in Punjab.

We can draw a crucial historical lesson from the disruption caused by the 1947 partition: for economic revival of Punjab and for initiating an ecologically oriented development pattern, it is of utmost importance that peaceful relations prevail between India and Pakistan. There is a yearning for peace between the two countries, but this exists along with vested military and political interests that profit from border tensions between the two countries. Punjab’s sustainable development requires that such vested interests be politically defeated, and new economic ties develop between the two countries that take into account the natural resources and human skills of the two regions.

Pritam Singh is Professor Emeritus at Oxford Brookes Business School, Oxford, UK and the author of Federalism, Nationalism and Development: India and the Punjab Economy.

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