Independence for India meant its simultaneous partition. The country, which had for long remained a single, unified economic unit and whose economy was based on inter-regional specialisation and dependence, was divided along communal lines.
Areas, where Muslims were in majority such as Sind, the N.W.F.P., and Baluchistan were ceded to form the new state of Pakistan. This led to some very serious consequences for India.
Area, Population and Mineral Resources:
The first consequence was an uneven distribution of area and population. India was burdened with 82% of the population in relation to its share of 77% of the total area of the undivided country. The remaining 18% of population with 23% of the area went over to Pakistan.
The Partition did not materially alter the availability of mineral resources to the new Indian republic. Except for some potential oil-producing sources in the Indus-valley and East Bengal, salt and gypsum of the Salt Range, low grade coal in West Punjab, Sind and Baluchistan, small quantities of chromite and Sulphur in Baluchistan, low grade antimony ore in Chitral and higher grade Limestone of the salt Range, the Indian Union lost little-a bare 3% â€” of the mineral resources of undivided country. In respect of water-power resources, India’s loss amounted to 0.5 million K.W. of an estimated 30-40 million K.W. Capacity. This was more than made up within 2 years of the Partition.
It is only when we assess the agricultural resources that the real loss to India manifests itself. As a result of the partition, 84% of the net sown area came to India’s share while the remaining 16% went to Pakistan. Although Pakistan got slightly less than what her share of population would demand, but she more than made up by way of better irrigation facilities.
Out of 70 million acres of irrigated land in the undivided country, 48 million or 67% remained with India while 22 million acres or 33% of the total fell to Pakistan’s share. Consequently, 45.2% of the net sown area in Pakistan was served by irrigation works, the corresponding percentage in the Indian Union being only 18.9%.
Not only a larger share of irrigated area went to Pakistan, excepting perhaps in U.P., the irrigation works in India were largely of a ‘protective’ nature i.e. they were more meant to ward off famine conditions than to produce a significant increase in yield per acre. This was especially true of irrigation in South India, particularly in Bombay, Deccan, Mysore and Madras. The partition, therefore, reduced India to greater dependence on the vagaries of rainfall and that accounts for the yearly fluctuations in her agricultural production.
Even before Independence, India was deficit in food-grains. This deficiency was now aggravated. With 82% of the population, she produced only 68% and 65% of the total preparation yield of rice and wheat crops respectively. On the other hand, the areas, which went to form Pakistan were normally surplus in food production to the extent of about one million tons.
The partition was thus instrumental in causing a net loss of 7-8 lakh tons in the annual supply of the Indian union.
The food shortage necessitated a larger area under cultivation being diverted to the production of food crops. However, the partition had created a serious shortage of raw cotton and raw-jute as well. India was left with only 60% of raw-cotton and 19% of raw-jute production to cater to two of her major industries. It was necessary to achieve self-sufficiency in these raw-materials as well.
This led to a competitive demand on the available area, thereby aggravating the problem of disequilibrium between the supply of cultivable land and the demand for essential requirements of food and commercial crops in India. This also implied a more than proportionate emphasis on agricultural development.
As Balkrishna observes. “In proportion to this emphasis, the schemes of industrial development in India suffered considerably.”
As regards industries, the share of Pakistan was negligible, 91% of all industrial establishments comprising 93% of industrial workers having come to India’s share. Some of the important industries like jute paper and Iron and Steel remained totally unaffected. Even among others like cotton textiles, sugar, cement, match, soap, glass, chemicals, woolen and silk mills, the share, of Pakistan was negligible.
However, the partition affected industries in many other ways. The interdependent relationship between India and Pakistan was largely that of the former as the industrial manufacturer and the latter as the supplier of raw-materials.
More than 70% of the raw jute of East Pakistan used to find its way to the jute mills at Calcutta; the larger portion of the long and medium staple cotton grown in Sind and west Punjab was supplied to the textile mills of Bombay, Kanpur and Ahmedabad; the paper mills of Calcutta obtained their Bamboo supplies from the forests of East-Pakistan.
In exchange for these and other raw-materials, areas now in Pakistan received consumer goods such as sugar, cotton textiles, Iron and Steel products, leather goods, paper, Cigarettes, coal which had a ready market there. The partition disrupted the free flow of these goods.
The industries which specialised in processing agricultural raw-materials now became dependent on imported cotton, jute, oil seeds, wool etc. Their power to complete in foreign markets was reduced and their expansion potentialities limited. The partition also led to a sizeable decline in the demand for Indian manufactured articles as Pakistan drifted to other sources of supply.
Migration of Muslim artisans and skilled workers dealt a severe below to cottage the small scale industries like glass, metal works, woolen and hosiery concerns of Punjab, Delhi, Rajasthan, and U.P. Persons, displaced from Pakistan, could not make up the deficiency and it took considerable time before new workers were trained in such vocations.
Yet another effect was with regard to the location-pattern of Industries. In view of the strained relations of the two countries, it became unsafe to locate industries in the border provinces or even in Calcutta. Factories, therefore, began to be shifted to the safety of the interior of the country.
The partition had a profound effect on India’s foreign trade. Commodities like raw-jute and raw cotton, which undivided India used to export, now became her major imports. In the pre-partition days, raw-materials of countries like Afghanistan, Persia and Iraq were exported through Indian ports.
There was thus a flourishing ‘cent-report’ trade which was also eliminated on account of the refusal of Pakistan to allow transit facilities. This was particularly true of trade with Afghanistan. But the most serious effect was to hamper India’s export capacity. Exports of hides and skins and, to some extent, tea declined.
The exports of jute manufactures and cotton piece goods suffered on account of the uncertainty of raw-material supplies and also due to the stiff competition that Pakistan soon began to offer. On the other hand, India was obliged to import large quantities of jute, food and cotton. In short, the partition, by reducing India’s export capacity and by increasing her import requirements, aggravated the post-war problem of deficits in India’s balance of payments.
As regards railway transport, rolling stock was shared-on mileage cum traffic basis while the workshops were divided on the basis of location. Of the total route mileage of 40,935 in undivided India, the railways in Pakistan accounted for 6,950 route miles or about 17% of the total while 33,985 route-miles or 83% of the total came to India’s share. Administratively speaking, seven out of nine railway systems came intact to India while the remaining two, namely, the Bengal Assam Railway and the North Western Railway, were divided.
Of the railway staff, 1,26,000 non-Muslims opted for India while 83,000 workers migrated to Pakistan. A noteworthy feature of this exchange of staff was that the Non-Muslims, who came to India, were mostly clerks, ticket collectors and guards whose absorption created new problems. The Muslims, who opted for Pakistan, however, were mostly drivers, foremen, workshop technicians, black smiths, coppersmiths etc. Their migration created the problem of lack of skilled staff in Indian railways.
On the E.I.R. alone, shortage of drivers and foremen amounted to about 45% and this greatly hampered coal loadings from the mines. The partition gave rise to certain traffic problems as well. With the loss of Karachi to Pakistan, Bombay grew in importance as the principal port of supply for the western region of the country such as the East Punjab, Delhi, UP., and Rajasthan. The Delhi-Bombay route, therefore, became highly congested.
The Partition of Bengal into East and west Bengal created a new problem in so far as India was left with no rail route to reach Assam without traversing Pakistan territory. It necessitated the immediate construction of a new rail-link with Assam. A good result, however, was that the Indian railways were relieved of the heavy burden which the strategic portion of N.W. Railway imposed upon them.
Before the Partition, banking was conducted mostly by Hindus even in the Muslim majority areas of the country. Anticipating disturbances, most of the banks in the Punjab transferred their head offices to the safer areas of East Punjab and Delhi. On 15 August 1947, Pakistan had only two of the 81 scheduled banks and 576 out of 3,460 branch offices existing in undivided India.
Many banks, operating in territories belonging to Pakistan, fearing disturbances and even worse, tried to reduce their commitments by recalling the advances. But they could not do so beyond a certain limit. Therefore, when disturbances actually broke out, most of the banks suffered considerable losses and some had to close down offices there.
Under a Financial Agreement reached with Pakistan, it was decided that all liabilities in respect of loans, guarantees and financial obligations of undivided India, as outstanding on 15 August 1947, would be taken over by the Govt. of India subject to the recovery of an appropriate contribution of Rs. 300 crores from Pakistan.
It was further agreed that Pakistan would pay this amount with interest in equal annual instalments spread over a period of fifty years â€” starting from 1952.
Pakistan never paid Rs. 300 crores-not even the interest charges on it, thus throwing on the Govt. of India the entire burden of the public debt of the undivided country though she grabbed away the assets located in territories now forming the State of Pakistan.
However, the most direct result of the Pakistan was the evacuation and settlement of an estimated 8.7 million displaced persons. In the words of C.N. Vakli. “Never before in the history of the world did such a large scale transfer of population take place under such adverse conditions.”
The country which had not yet fully recovered from the strain of the second world war, was now forced to divert large resources in men, money and transport for the purpose of quick evacuation of refugees and providing them relief until they could stand on their own legs. It was not, however, the money cost of rehabilitation and the difficulties of handling and dispersing the refugees which were enormous.
What was more disturbing, the displaced persons from East Pakistan, concentrated mostly in the city of Calcutta, were at times deeply frustrated and readily lent themselves as the spearhead of social discontent. It was with great effort than India ultimately mastered “a situation which, in essentials, was a social upheaval.”
To sum up. The immediate effect of the partition was the emergence of shortages both in India and Pakistan. While there was food shortage in India, there was consumer goods shortage in Pakistan. There was paucity of mineral resources in Pakistan but a deficiency of agricultural raw-materials in India.
India suffered shortage of agricultural potential while Pakistan that of industrial equipment. Neither side had balance in agriculture and industry. This is bound to happen when a country, which has lived for centuries as one economic unit, is divided on the entirely uneconomic ground of ‘mutual antipathies’.
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