An Analysis of Long-Term Growth of National Income and Capital Formation in India (1850-51 ΤΟ 1950-51) An Old and Rare Book

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National income remains one of the most important indices of economic growth of a country. It is therefore a matter of significant interest to know a comparable time- series of national income for the present-day Indian Union territories, going back as distant a past as permitted by the availability of data.

The present study has the remarkable feature that it attempts to estimate national income for India, along with capital formation, from 1850-51 to 1950-51, by making necessary adjustment for relevant geographical areas so that the series can be used for comparing economic performance over time.

Efforts have also been made to estimate population, and labour force for India over this 101-year period and also to test the validity of the assumption of Kuznets and others about the inter-relationship between the growth in population and labour force with national income and capital formation for the vast Indian territories.

This study is an important addition to the analysis of national income and related aggregates for India.

Dr. Bina Roy(Ph.D in Economics, Calcutta University) was drafted for research work in the Planning Division of the Indian Statistical Institute, Calcutta by Professor P.C.Mahalanobis when he was engaged in building up the famous Plan-Frame of the Second Five Year Plan for India. It was a lucky break for her quite early in her professional career.

Since then, her principal academic pursuit has been the rigorous research work in the field of national income and related aggregates, in the data-based estimation of factor shares of national income, distribution and concentration of national income by size-groups of population in India. Besides teaching as an Associate Professor, this re- search work was, for nearly three decades, her whole-time pre-occupation in the Institute, her destiny.

The author's labour was amply rewarded when the noted American economist, Professor R.W.Goldsmith, in his final work - India's Financial Development: 1860-1977 - quoted extensively from her estimates, published in her book entitled "Capital Formation in India".

As a senior member of the National Income Research Unit of the I.S.I. She participated almost every year, in national and international Conferences and Seminars, held in India and abroad. Number of her published papers, whether in edited volumes or in Conference and Seminar reports, approximates almost about one hundred.

Quantitative studies on national income and other allied aggregates for the past period, as is well known, are essential for preparing indicators of long-term economic growth of a country. They serve as an effective tool for tracing and assessing its past economic growth. The present study is a modest attempt to follow the path of illustrious scholars like Dadabhai Naoraji and others who undertook this task in the past to measure the economic well-being of India and to throw light on the level of living of her people.

The present study is basically empirical in nature with no theoretical pretensions. Much attention has therefore been given to the estimation of the long-term series of national income and capital formation in the present-day Indian Union territories from 1850-51 to 1950-51-for a span of 101 years both at current and constant prices of 1980-81. By assembling, integrating and interpreting the assorted data collected from different sources, the present author has tried to link this 101-year period in continuous series with as few gaps as possible.

Efforts to study the long-term economic growth in India have already been made by a number of scholars. Some of these studies presented quantitative series also. While reviewing and benefitting from these studies, it has become apparent that there are considerable gaps in many of these studies. Some of these gaps are about the area coverage while others relate to the coverage of data. To overcome those deficiencies to the extent that lies within her competence, the present author has undertaken this present study which is basically quantitative in nature. As such, she has tried her best to search the past period sources to collect the relevant required data wherever available, whether in libraries or in various Central and State archives in India.

The Search was long but happily not fruitless.

National income remains one of the most important in- dices of economic growth of a country. It is therefore a matter of significant interest to know a comparable time series of national income for the present-day Indian Union territories going back to as distant a past as permitted by the availability of data. Attempts have been made by other scholars to study the past period trends in national income and related aggregates for India. But, generally, these studies have referred to the geographical area of the entire undivided India, and, therefore, have problems of comparability with the current national income of the present- day Indian Union. The present study has the remarkable feature that it attempts to estimate national income for India, along with capital formation, from 1850-51 to 1950- 51, by making necessary adjustment for relevant geographical areas so that the series can be used for comparing economic performance over time. To this end, the author has painstakingly assembled, integrated and interpreted the assorted data collected from different sources and has tried to link this 101-year period in continuous series with as few gaps as possible.

Efforts have also been made to estimate population and labour force for India over this 101-year period and also to test the validity of the assumption of Kuznets and others about the inter-relationship between the growth in population and labour force with national income and capital formation for the vast Indian Territory.