Impact of Partition on the Indian Economy

After being declared an independent nation on 15 August 1947, the Indian government, along with the British officials, announced the partition of the country. The main reason behind the division of the country was the rivalry issues between the Hindus and the Muslims of Hindustan. The partition led to the formation of two different countries, which we know as India and Pakistan (Eastern and Western Pakistan) today. However, Eastern Pakistan got separated from Pakistan, and is now known as Bangladesh. The regions/areas with the majority population of Hindus formed India, whereas regions/areas with the majority population of Muslims came together to form Pakistan.

Due to the partition, the economy of both countries suffered and faced a downfall. Many people lost their homes, as they were forced to move from one state to another. The immediate result of the migration was violence, which continued with a series of riots between the two communities.

Impact on the Indian Economy

The division of the country led to various impacts on India. These were:

1. Agriculture

As a result of the partition, the agriculture sector faced severe issues. This caused a major drawback to India, as agriculture is considered the backbone of the Indian economy. Out of 70 million acres of irrigated/fertile land in the undivided country, 48 million remained with India, while the other 22 million acres fell into Pakistan’s share. Due to the division of the fertile land between India and Pakistan, there was a deficiency in the production of food grains in the country. Along with the shortage in food, India also faced a shortage in producing raw cotton and raw jute. Also, there is no denying that the partition caused a net loss of around 7-8 lakh tons in the annual supply of the Indian union.

2. Division of Area and Population

After the partition, there was an uneven distribution of both, the area and the population of the country. Pakistan got around 18% of the overall population with 23% of the country’s area, while India was burdened with around 82% of the total population with only 77% of the area in comparison to its population density. Because of this, many people were left homeless. They didn’t have any shelter and continued living as refugees in their own country. The continuous migration from countries, since the partition is causing even more strain on the Indian economy.

3. Industries

The industrial sector directly suffered from the impact of partition on the agricultural sector. The industrial sector had a traditional linkage with the agricultural sector, as the raw materials required for the production purpose came from the agricultural sector. The basic requirement for inputs, i.e., raw cotton and raw jute were not being fulfilled due to the lack of production. Other industries, such as textile, silk, hosiery, etc., were also affected due to the partition. Also, because of the ongoing riots between India and Pakistan, India faced a major loss of skilled workers and artisans, as many of them left India and migrated to Pakistan. The industries in West Bengal and Punjab had to starve for the want of skilled labours. Many factories were shut down due to the loss of workers and stability in the market conditions. The industrialists were scared of planting their factories on the borderline of the country, which led to a drastic effect on the pattern of industrial location in India, particularly in West Bengal.

4. Minerals

There was not much loss of minerals suffered by India due to the partition. Pakistan got around 3% of the total mineral production of the country. Except for the minerals, such as salt and gypsum of the Salt Range, oil-producing sources in the Indus Valley and East Bengal, low-grade coal in West Punjab, Sindh, and Baluchistan, small quantities of chromite and Sulphur in Baluchistan, low-grade antimony ore in Chitral and higher-grade Limestone of the salt Range rest all the minerals like copper, iron ore, manganese, etc., were left unaffected by the partition.

5. Trade

The partition had a lasting and intense impact on the Indian economy. Prior to the partition, India was the major exporter of raw jute and raw cotton. But, as the agricultural and industrial sectors got affected due to the partition, India became the importer of these goods. Before the partition, Indian ports were used as a port for exporting raw materials from Afghanistan, Iraq, and Persia; however, these exports came to an end as Pakistan refused to allow transit facilities post-partition. India came to a state where its imports started exceeding its exports, and this affected India’s Balance of Payment (BoP).

6. Railways

Due to the partition, another sector that got affected was railways. The loss suffered was not just in terms of the number of railways, but also in terms of skilled workers. In terms of railways, 7 out of 9 railway systems came intact to India, while the remaining 2, namely, the Bengal Assam Railway and the North Western Railway were divided between both countries. The migration of people from one country to another caused a problem of lack of staff in the Indian railways. Out of the total railway staff, 1,26,000 non-Muslim workers opted for India, while 83,000 workers migrated to Pakistan. The staff who opted for Pakistan were mostly drivers, foremen, workshop technicians, blacksmiths, coppersmiths, etc. This created a shortage of about 45% of drivers and foremen and had a huge impact on the coal loadings from the mines.

7. Public Finances

Before the partition took place, an agreement was made between India and Pakistan under which the Indian government took over the loan of ₹300 Crores that Pakistan had to pay as liabilities. The agreement was signed with the view that Pakistan would re-pay this amount to India with interest in equal annual installments spread over fifty years, starting from 1952. But Pakistan neither re-paid the amount of ₹300 Crores nor paid the interest, as a result of which, the Indian government faced a burden of public debt. This amount was however recovered by acquiring the assets located in now called Pakistan.

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Article Tags :

• Class 12
• Commerce
• Indian Economic Development