The construction of the Indian Railways is pointed to by apologists for the Empire as one of the ways in which British colonialism benefited the subcontinent, ignoring the fact that many countries built railways without having to go to the trouble and expense of being colonised. But the facts are more damning.
The railways were first conceived of by the East India Company, like everything else in that firm’s calculations, for its own benefit. Governor-General Lord Hardinge argued in 1843 that the railways would be beneficial “to the commerce, government and military control of the country”. Ten years later, his successor Lord Dalhousie underscored “the important role that India could play as a market for British manufacturers and as a supplier of agricultural raw materials”. The vast interior of India could be opened up as a market only by the railways; labourers could be transported where they were needed and its fields and mines could be tapped to send material to feed the ‘satanic mills’ of England.
In its very conception and construction, the Indian Railways was a big colonial scam. British shareholders made absurd amounts of money by investing in the railways, where the government guaranteed returns on capital of 5 per cent net per year, unavailable in any other safe investment. That was an extravagantly high rate of return those days, possible only because the government made up the shortfall from its revenues, payments that of course came from Indian, and not British, taxes.
These excessive guarantees removed any incentive for the private companies constructing the railways to economise—the higher their capital expenditure, the higher would be their guaranteed return at a high and secure rate of interest. As a result, each mile of Indian railway construction in the 1850s and 1860s cost an average of £18,000, as against the dollar equivalent of £2,000 at the same time in the US. In the event, it was 20 years or more before the first lines earned more than 5 per cent of their capital outlay, but even after the government had taken over railway construction in the 1880s, thanks to the rapacity of private British firms contracted for the task, a mile of Indian railway cost more than double the same distance in the equally difficult and less populated terrains of Canada and Australia.
It was a splendid racket for everyone, apart from the Indian taxpayer. In terms of a secure return, Indian railway shares offered twice as much as the British government’s own stock. Guaranteed Indian railway shares absorbed up to a fifth of British portfolio investment in the 20 years to 1870—the first line opened in 1853—but only 1 per cent of it originated in India. Britons made the money, controlled the technology and supplied all the equipment, which meant once again that profits were repatriated. It was a scheme described at the time as “private enterprise at public risk”. All the losses were borne by the Indian people, all the gains pocketed by the British trader—even as he penetrated by rail deep into the Indian economy. The steel industry in England found a much-needed outlet for its overpriced products for railways in India: steel rails, engines, rail wagons, machinery and plants. Far from supporting the proposition that the British did good to India, the railways are actually evidence for the idea that Britain took much more out of its most magnificent colony than it put in.
Nor was there any significant residual benefit to Indians. The railways were intended principally to transport extracted resources—coal, iron ore, cotton and so on—to ports for the British to ship home to use in their factories. The movement of people was incidental, except when it served colonial interests; and the third-class compartments, with their wooden benches and absence of amenities, into which Indians were herded, attracted horrified comment even at the time. And also questions in the toothless legislatures: there were 14 questions on this issue in the legislative assembly every year between 1921 and 1941, and 18 more annually in the Council of State. The yearly averages for 1937-1941 were 16 and 25 respectively. Mahatma Gandhi’s first crusade on his return to India was on behalf of the third-class traveller. Yet, third-class passengers became a source of profit for the railways, since British merchants in India ensured that freight tariffs were kept low (the lowest in the world) while third-class passengers’ fares made up the railway companies’ principal source of profit. No effort was made, in laying railway lines, to ensure that supply matched the demand for popular transport.
Nor were Indians employed in the railways. Discriminatory hiring practices meant that key industrial skills were not effectively transferred to Indian personnel. The prevailing view was that the railways would have to be staffed almost exclusively by Europeans to “protect investments”. This was especially true of signalmen, and those who operated and repaired the steam trains, but the policy was extended to such an absurd level that even in the early 20th century all the key employees, from directors of the Railway Board to ticket-collectors, were white men—whose salaries and benefits were also paid at European, not Indian, levels and largely repatriated back to England. Moreover, when the policy was relaxed and expensive European labour reduced, there was a continuing search for the most ‘British-like’ workers. Thus came the long-lasting identification of the Anglo-Indian community with railway employment, since at first it was these Eurasians who were trained to do the jobs that only Europeans had been assumed to be capable of doing previously. In keeping with British notions of eugenics, and since the Anglo-Indians were not a very large community, ‘martial’ Sikhs and pale-skinned Parsis were then employed as well, although they were only put in charge of driving engines within station yards and employed in stations with infrequent traffic.
Double standards prevailed in other ways: whereas in Britain it was common practice to ensure the merit-based promotion of firemen to drivers, or of station-masters of small rural stations to large stations, this did not happen in India because these junior positions were occupied by Indians, whose promotion would have be to posts otherwise occupied by Europeans. By 1900, in the regulations for pay, promotion and suitability for jobs, or what we would today describe as the human resource management rules, employees were subdivided into “European, Eurasian, West Indian of Negro descent pure or mixed, Non-Indian Asiatic, or Indian”. On employment, the local medical officer would certify the race and caste identity of a candidate and write it on his history sheet—thus determining his future pay, leave, allowances, and possible promotions, as well as place in the railway hierarchy for the rest of his career.
Racism combined with British economic interests to undermine efficiency. The railway workshops in Jamalpur in Bengal and Ajmer in Rajputana were established in 1862 to maintain the trains, but their Indian mechanics became so adept that in 1878 they started designing and building their own locomotives. Their success increasingly alarmed the British, since the Indian locomotives were just as good, and a great deal cheaper, than the British-made ones. In 1912, therefore, the British passed an Act of Parliament, explicitly making it impossible for Indian workshops to design and manufacture locomotives. The Act prohibited Indian factories from doing the work they had successfully done for three decades; instead, they were only allowed to maintain locomotives imported from Britain and the industrialised world. Between 1854 and 1947, India imported around 14,400 locomotives from England (some 10 per cent of all British locomotives produced), and another 3,000 from Canada, the US and Germany, but made none in India after 1912. After Independence, the old technical knowledge was so completely lost to India that the railways had to go cap-in-hand to the British to guide them on setting up a locomotive factory in India again.
This is far from being a retrospective critique from the comfortable perspective of a 21st century commentator. On the contrary, 19th-century Indians were quite conscious at the time of the abominable role of the railways in the crass exploitation of their country. The Bengali newspaper Samachar wrote on 30 April 1884 that “iron roads mean iron chains” for India—foreign goods could flow more easily, it argued, killing native Indian industry and increasing Indian poverty. Nationalist voices like those of G.V. Joshi, G.S. Iyer, Gopal Krishna Gokhale and Dadabhai Naoroji were raised publicly in the 1890s, pointing out how limited the benefits of the railways were to India, how the profits all went to foreigners abroad, and how great was the burden on the Indian exchequer. And there are other examples to show how the interests of Indians were never a factor in railway operations: during World War I, several Indian rail lines were dismantled and shipped out of the country to aid the Allied war effort in Mesopotamia!
On the whole, therefore, the verdict of the eminent historian Bipan Chandra stands. British motives in building railways in India, he wrote, were “sordid and selfish—the promotion of the interests of British merchants, manufacturers and investors—at the risk and expense of Indian revenues”; their “essential purpose” being to “assist British enterprise in the exploitation of the natural resources of India”.
Quod erat demonstrandum.
