Day 1

When war broke out in Europe in September 1939 the British political will to hold on to its Indian empire was as strong as it ever had been, despite the qualitative changes in the economic relations between the metropolis and the colony. The forces of Indian nationalism were more radicalized but were also more divided than they had been in the past. The Congress leadership, having just fended off a left-wing challenge, asked the British to define their war aims before they agreed to any support for the British cause. Congress leaders had been deeply offended and embarrassed by Viceroy Linlithgow’s decision to declare India a belligerent in the war against Germany without bothering to consult the Congress high command or the provincial ministries. Once it became clear that the British were not of a mind to make any immediate concessions to Indian nationalist aspirations, Congress had little choice but to resign from holding office in the provinces as a mark of protest.

From the Indian nationalist point of view the world war was a conflict between old and new imperialist powers. That Britain was fighting for freedom and democracy was simply not credible to its colonial subjects unless they too were given a taste of these values. In 1940, Gandhi, not yet prepared to signal the beginning of a mass movement, called upon his followers to offer individual satyagraha. So satyagrahis made anti-war speeches and courted arrest in large numbers. While non-violent protestors were herded into detention camps, the British moved decisively to imprison radical leaders and workers, including Subhas Chandra Bose and his followers, in 1940. Japan’s entry into the war in December 1941 and its military sweep across South East Asia in early 1942 provided the occasion for one futile round of negotiations but ultimately served to strengthen Britain’s resolve to use the coercive powers of the colonial state to the fullest extent when necessary to keep nationalists at bay.

Political denial was matched by economic interventions on an unprecedented scale. Indian resources were marshalled to finance Britain’s war effort as never before. While the Depression decade had seen a steep decline in prices, the war economy came to be characterized by galloping inflation. The inflationary pressure emanated largely from the massive expansion in public expenditure. Between 1939 and 1945 nearly Rs 3.5 billion were spent on defence purposes in India. While Indian revenues were to be used for the defence of the colony, the metropolitan government agreed, in a major departure of policy, to foot the bill for the use of Indian forces in the defence of the empire. But the treasury in London was short of cash. So, in a typical example of British financial jugglery, a mechanism was devised by which India would pay here and now and be reimbursed after the end of the war. Part of the total war expenditure would be recoverable as sterling credits for India accumulated in the Bank of England. For now, the government of India would finance the war by making the mints work harder. The money supply in India rose from about Rs 3 billion in 1939 to Rs 22 billion in 1945. Since imports had dropped drastically due to the dislocations of war and government purchases of war-related material diverted some goods from Indian consumption, serious shortages developed and prices soared for essential commodities like cloth, kerosene oil and, most important of all, food.

Wartime exigencies and the experience of the Bengal famine, however, brought about a reversal of the debt relationship between metropolis and colony, as well as of the nature of the links between the colonial state and the economy. Throughout the colonial era India had owed a debt to Britain, but at the end of the war it was Britain which owed a large debt of £1.3 billion to the colonial government of India. In order to provision troops and key urban classes, the colonial state had intruded into the food market, procuring grains from the countryside and selling them through ration shops in the towns and cities. Social groups, such as the rich farmers of the Punjab, who might have been expected to make large profits from rising grain prices, were prevented from doing so by the colonial state’s procurement and price-control policies. The poor in one region of India, Bengal, perished on account of the state’s lack of action; the better off in another region, Punjab, complained bitterly about the state’s heavy-handed interventions which they deemed to be detrimental to their own interests.

~~MODERN SOUTH ASIA: History, Culture, Political Economy -by- Sugata Bose and Ayesha Jalal