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Long Answer Questions · Q15

Q.Discuss the contribution of Indian economic thinkers — Dadabhai Naoroji, M. G. Ranade, M. Visvesvaraya and Amartya Sen — to the development of Indian economic thought.

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Alongside the Western schools of economic thought surveyed in this chapter, a line of Indian economists applied and adapted these ideas to India's own economic conditions — first under colonial rule, and later in the task of planning an independent nation's development. Four thinkers are especially significant.

Dadabhai Naoroji (1825–1917), the 'Grand Old Man of India,' was among the first to build an economic — not merely political — case against British colonial rule. In Poverty and Un-British Rule in India (1901), his 'Drain of Wealth' theory used his own estimates of India's national income to argue that a large part of India's wealth was drained to Britain each year through official salaries and pensions, 'home charges,' and profits repatriated by British companies — with no adequate economic return to India — making this continuous drain a root cause of India's poverty.

Mahadev Govind Ranade (1842–1901), the 'Father of Indian Economics,' broke from the purely laissez-faire classical position to argue that a still-industrialising, colonised economy like India's needed active state support — protective tariffs and government promotion of industry and infrastructure — because the free-trade principles that suited an already-industrialised Britain did not automatically fit India's very different stage of development. His Essays on Indian Economics laid an early theoretical foundation for state-guided industrialisation in India.

Sir M. Visvesvaraya (1861–1962), an engineer-economist, went further and proposed, in his 1934 book Planned Economy for India, a specific, centrally planned strategy for shifting India's workforce out of low-productivity agriculture and into industry over a defined period, in order to raise per-capita income. His concrete planning approach directly anticipated — and influenced — the Five-Year Plan model India adopted after independence in 1947.

Amartya Sen (b. 1933), awarded the Nobel Memorial Prize in Economic Sciences in 1998, is the most internationally influential Indian economist of the modern era. His capability approach reframed the very meaning of economic development: rather than judging a country's progress only by income or GDP, Sen argued development should be judged by the real freedoms and capabilities people have — to be healthy, educated, and to participate in society — with income as only one input among several. His research on famines showed that famines can occur even without an overall shortage of food, driven instead by a collapse in specific groups' ability (their 'entitlement') to access the food that does exist — a finding that reshaped how governments and international agencies design famine-prevention and social-protection policy worldwide. …

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