Money, Income, Prices in 19th Century India: A Historical, Quantitative and Theoretical Study 9781642876147, 9789350245422

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MONEY, INCOME, PRICES IN 19th CENTURY INDIA -A HISTORICAL, QUANTITATIVE AND THEORETICAL STUDY

A Proiect on Monetary History of India Sponsored by the Reserve Bank of India

P. R. BRAHMANANDA (Former RBI Professor in Monetary Economics, University of Bombay, Hon.Visiting Fellow, Institute for Social and Economic Change, Bangalore)

With a Foreword by

His Excellency Dr. C. Rangaraian, Governor of Andhra Pradesh, Former Governor of the Reserve Bank of India

Hal GJIimalaya CJlublishingGJIouse MUMBAI • DELHI • NAGPUR • BANGALORE • HYDERABAD

(0

P.R.Brahrnananda during his lifetime, and later by the Reserve Bank ofIndia. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording andlor otherwise without the prior written permission of the publishers and the Reserve Bank ofIndia.

ISBN

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Revised Edition· 2010

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CONTENTS

1.

INTRODUCTION Some Background Features - Chapter Scheme

1-11

PART -I

2.

GAPS IN HISTORICAL STATISTICS Changes in Methodology of Economic History - Important Variables and Their Role - Information Gaps - Time Series of Economic Magnitudes from 1835-36 to 1860-61 Appendix 1: Computation of A New Set of Price Indices - The Weighted Index of Export Articles - The Weighted Index of Import Articles Appendix 2: Statistical Contributions of F. J. Atkinson

15-24

3.

NET DOMESTIC PRODUCT OF THE INDIAN SUB-CONTINENT FOR THE PERIOD 1861-62 TO 1899-1900 Some Concepts - Dadabhai Naoroji's Estimate - Barbour, Digby And Curzon - Atkinson's Modern Approach - Mukherjee And Heston The Methodology of Estimation of NDP-Agriculture - Animal Husbandry - Forests - Fishing - Mining and Manufacturing - Small Industries and Services - Trade - Railways - House Property Banking - Residual Government - Net Product Totals According to Sectors - NDP of Indian SUb-Continent Appendix 1: The Base Year Estimate From Atkinson - 1893-94 Appendix 2: Revised Version of Atkinson's Estimate of NDP For 1875-76 and 1894-95 and A Fresh Series of Domestic Product Estimates - A Fresh Estimate, Mostly on Incomes Approach Appendix 3 : Comparison of Heston's Estimates of NDP with our Estimates of Method I Appendix 4 : Back-Casted Estimate for Agriculture Appendix 5: Estimates Indirectly Derived from Land Revenue Appendix 6: Estimate of Occupational Distribution

25-66

4.

ESTIMATION OF MONEY STOCK SERIES Paucity of Time Series - Estimates of Harrison, Atkinson, Datta, Adie and Sundara Iyer - Some Concepts - Assumption Regarding the Rate of Depreciation of the Silver Rupees - Sources of Data for the Estimation of Money Stock(s) Series - Silver Coins - Currency Notes - Deposits - Estimation Methodologies for Money Stock Series The Three Approaches Adopted - The Cumulated Net Stock Approach - The Cumulated Net Absorption Approach Appendix 1: Net Stock of Silver Rupees Appendix 2: The Choice of Money Stock Series

67-95

5.

THE RUPEE CENSUS The Rupee Census Matrices - Harrison's Role - The Datta ReportFeatures of The Census-Why Rupee Census is Important? - A De Novo Estimate

96-118

Appendix 1: Methodologies of Jevons and of Harrison Compared Appendix 2: Rupee Census Matrices Appendix 3: Rupee Census Sources

6.

TIME SERIES OF MACRO ECONOMIC VARIABLES Prices - Railways - Agriculture - Trade - Money - Public Finances Income Appendix 1: Graphical Depictation of Time Series According To Four Periods - I.Population, Capital, Production and Income - II.Prices III.Trade and Related Matters - IV. Silver Rupees, Money & InterestV.Public Finances And Drain Measures

119-185

PART -II

7.

THE INDIAN ECONOMY AROUND THE EARLY 1860's Historical Background - Trends in Crucial Economic Variables: 1835-36 to 1860-61 - Economic Change during the Period 1835-1860 - The Features of the Indian Economy - Area and Population - Crops and Minerals - Industries - Trade Infrastructure - Theodore Morison's Estimate - Description of the Monetary System of India - Home Charges or the Drain Appendix 1 Early Time Series

189-204

8.

THE CHANGING PROFILE OF THE INDIAN ECONOMY DURING 1861-62 TO 1899-1900 Change in the Perspective of the Rulers-Population Growth Famines - Food and Agricultural Production - Industry - Per Capita Income - Public Finances - Trade - Laissez-Faire and its Impact - Issues and Controversies - Overview of the Economic History of the Period Appendix 1: Data for Four Benchmark Years

205-215

9.

A CHRONOLOGICAL CURRENCY HISTORY OF INDIA: 1835-36 TO 1899-1900 th Year 1542 - Year 1793 - Year 1798 - April 25 , 1806 - Year 1816 - Year 1818 - October, 1824 - Year 1830 - Year 1833 April 1ih, 1833 - May 2ih, 1835 - Year 1837 - Year 1840 January 13th , 1841 - Years 1848-50 - Year 1850 - Year 1851 Year 1852 - December 25 th , 1852 - Year 1853 - Year 1854 Year 1855 - Year 1856 - Year 1857 - Year 1858 - November, 1859 - Year 1860 - February, 1860 - Years 1861-65 - January, 1861 - Year 1862 - January, 1862 - Year 1864 - March, 1864rd June 20 th , 1864 - November, 1864 - November 23 , 1864 March, 1865 - April, 1865 - May 1ih, 1865 - Year 1865 - Year 1865 - Year 1866 - October, 1866 - June, 1867 - April, 1868October, 1868 - Years 1869-70 - Years 1870-71 - Year.s 1870-71 - Year 1870 - Year 1871 - Years 1871-72 - Years 1871-81 - Years 1872 - Years 1872-73 - July. 1873 - January. 1874 - May, 1874 - November, 1874 - Year 1874 - Years 1874-1893 - Year 1875 - Year 1876 - Year 1876 - July, 1876Year 1876 - Year 1876 - September, 1876 - December, 1876Year 1877 - Years 1877-88 - Years 1876-77 and 1878 February, 1878 - March, 1878 - Years 1877-78 to 1878-79 Year 1878 - July, 1878 - November, 1878 - Year 1878 -

216-236

December, 1879 - Year 1879 - Years 1879-80 - December, 1880 - Year 1881 - Years 1881-82 - Year 1881 - Year 1882October, 1883 - Year 1883 - Year 1885 - Years 1885-86 Years 1886-87, 1887-88 - Year 1886 - April 1886 - August, 1887 - January, 1888 - Year 1888 - Years 1890-91-Year 1892 - February, 1892-June 24 th , 1892 - August 2nd , 1892 th September 15 , 1892 - March, 1893 - Years 1892-93 October, 1893 - June 20 th , 1893 - Year 1893 - Year 1893 June, 1893 - November 1893 - Year 1894 - March, 1894 - Year 1895 - Years 1895-96 - Year 1896 - September 16th , 1897 Year 1897 - April ih, 1898 - May 19th , 1898 - June 16th , 1898th nd June 17 , 1898 - June 22 , 1898 - July 25th , 1898 - July 30 th , th 1898 - November 6 , 1898 - November 11 th , 1898 - January 1ih, 1899 - March, 1899 - July, 1899 - Years 1899-1902 th September 15 , 1899 - Year 1900 - A Resume of the History 10.

MONETARY EVOLUTION DURING THE PERIOD: 1861-62 TO 1899·1900 Silver Rupee as the Sole Legal Tender-Advantages of a Uniform Currency - Movement for the Gold Standard in India - Silver as Token Currency - Gold Standard With or Without Gold Coins Currency Notes - The Market Autonomy of Currency Supply The Role of the Quantity Theory - Failure of Bimetallism; A Modern Parallel - Steps in Monetary Development - Monetary Development in India - From Silver Standard to Gold Exchange - The Currency Ratio - High-Powered Money - Trend Growth Rates - Money-Using Habit - Decline in Velocity Values - Gold as a Dominant Store of Value

237·246

11.

THEORETICAL BACKDROP AND DIFFERENT ANGLES ON THE CURRENCY HISTORY A Prelude to Herschell and Fowler - Background to Bimetallism - The Choice between Gold and Silver - The Reluctance in India to Give up Gold - Theoretical Rationale of Gold Preference by Indians - Effects of Rising and Falling-Drifts in Prices of Precious Metals - Consequences of a Falling Drift in the Price of Silver - The Falling Price of Silver and Effects on Trade - The Burden of Fixed Gold Obligations - The Role of the Imperial Power - The Indian Case - The Background to the HerscheO Committee - The Five Angles on Currency Reform in India - The British Government's Angle - The Government of India's Angle - The Angle of British Trade and Industry in India The Angle of Interests of Indian Trade, Industry and Indian People - The Alternative Scenario for India

247·257

12.

THE HERSCHELL COMMITTEE AND ITS REPORT The Prelude to the Committee: R.H.Hollingbery's Report - The Herschell Committee - Evidence of Witnesses - 1. J.L.Mackay 2. James Thorburn - 3. Charles MacDonald - 4. Henry Coke 5. Sir James Broadwood Lyall - 6. Mr.Henry William Bliss - 7. Jervoise Athelstane Baines - 8. Charles Edward Bernard - 9. Stephen A Ralli - 10. Charles Gairdner - 11. John Alexander

258·272

Beith - 12. Sir Theodore Hope - 13. William Sowerby - 14. Sir Raymond West - 15. William Fowler - 16. Hermann Schmidt 17. Franc Forbes Adam - 18. Thomas Jackson - 19. Dadabhai Naoroji - Abstract of the Herschell Committee's Report Recommendations of the Committee - Mint Closure Appendix 1: Extract From The Memorandum on The Sale of Council Bills and Telegraphic Transfers by Mr.F.W.Newmarch, Financial Secretary, Submitted to the Chamberlain Commission 13

THE FOWLER COMMITTEE AND ITS REPORT Background To The Fowler Committee-Terms Of Reference To The Fowler Committee - 1. J.L.Mackay - 2.J.E O'conor - 3. Allan Arthur - 4. James Fairbairn Finlay - 5. A.M.Lindsay - 6. Charles Stewart Cox - 7. Sir Walter Hely-Hutchinson - 8. Sir Edgar Vincent - 9. Sir Antony Patrick Macdonell - 10. Samuel Montagu - 11. Edward Clouston - 12. Lesley Charles Probyn 13. Lord Rothschild - 14. Earl Of Northbrook - 15. Sir Alexandar Mackenzie - 16. Alfred Marshall- 17. Alfred De Rothschild - 18. Henry Dunning Macleod - 19. The Rt.Hon'ble Leonard H. Courtney - 20. Major Leonard Darwin - 21. Stephen Augustus Ralli - 22. Walter Duncan - 23. The Rt.Hon'ble Lord Farrer - 24. John Matheson Macdonald - 25. W.H.Cheetham - 26. Donald Graham - 27. David Cruickshank - 28. Mr.Merwanjee Rustamjee - 29. R.C.Dutt - 30. The Hon.Sir John Lubbock - 31. Henry Bois - 32. Sir Roger Barclay - 33. Sir Robert Giffen - 34. The Rt.Hon'ble Lord Aldenham - 35. Granville Lowther Acworth - 36. Frank Forbes Adam - 37. Sir Robert Steel - 38. Henry Lewis Raphael - 39. Mr.William James Thomson (Senior) And Mr.Wiliiam James Thomson (Junior) - 40. Thomas North Christie And William Martin Leake - The Fowler Committee's Report Minutes Of Dissent

273-292

14.

THE TIME-COURSE OF KEY VARIABLES IN THE INDIAN SUB-CONTINENT DURING 1861-62 to 1899-1900 Scope - I. Production - Il.lncome - Ill.Trade - IV. Gold And Silver - V. Money - VI. Prices - VII. Public Finance - Conclusion Appendix 1 : Period-Wise Trends in Key Variables

293-310

15.

THE ECONOMY DURING THE PERIOD PRIOR TO THE FALLING EXCHANGE RATE (1861-62 to 1871-72) Production - II. Trade - III. Gold and Silver - IV. Money - V. Prices - VI. Public Finance - VII. Income - Conclusion

311-314

16.

THE COURSE OF THE INDIAN ECONOMY DURING THE PERIOD OF THE FALLING EXCHANGE RATE DUE TO THE FALLING GOLD PRICE OF SILVER (1871-72 to 1892-93) I.Production - II. Trade - III. Gold and Silver - IV. Money - V. Prices - VI. Public Finance - VII. Income - Conclusion

315-321

17.

THE COURSE OF KEY VARIABLES DURING THE POSTMINT-CLOSURE PERIOD TILL THE ADVENT OF THE GOLD EXCHANGE STANDARD (1893-94 TO 1899-1900) Production - II. Trade - III. Gold and Silver - IV. Money - V. Interest - VI. Velocity of Money - VII. Prices - VIII. Exchange

322-326

Rate - IX. Public Finance - X. Income - Conclusions

18.

LESSONS FROM THE CURRENCY HISTORY Did the Falling Gold Price of Silver Benefit the Indian Economy? - The Falling Exchange Rate and Prices of Foodgrains - Was the Transition to the Gold Exchange Standard Inevitable? - Was the Fowler Committee Hasty? - A Regulated or an Automatic Monetary System? - The Contemporary Significance of the th Events During the 19 Century Appendix 1: Some Indian Viewpoints on the Currency Developments In The Ninteenth Century

327-343

PART -III

19.

CORRELATION AND CYCLICALITIES I. Correlation among Trended Variables - Rainfall - Real Product Variables - Government Variables - Price Variables Money Variables - External Variables - Real Capital Stock - II. Correlation among detrended Variables - Rainfall-Real Product Measures - Government Variables - Price Indices-Money Variables - External Variables - III. Examination of Cyclicality Graphs of Cyclical Movements Appendix 1: Correlation among Variables without Correction for Trend Appendix 2: Correlation among Variables with Correction for Trend

347-371

20.

DETERMINANTS OF PRICE LEVEL AN ECONOMETRIC ANALYSIS Scope - I. Introduction - The Theoretical form of the Price Level Function - Periodization-Trends in Different Prices Series - Time Series used in Regression Exercises - II Price Level Behaviour with M1A as Independent Variable - Period 1861-62 To 1899-1900 - Period 1871-72 To 1899 - 1900-PERIOD 1861-62 to 1892-93 - Period 1871-72 To 1892-93 - The Effect of the Trend Factor - Regressions of First Differences of Variables Regressions with Quasi Stationary Values of the Variables Some Conclusions - III Price Level Determinants Analysed Through The Fisherine Approach - Period 1861-62 to 1899-1900 - Period 1871-72 to 1899-1900 - Period 1861-62 to 1892-93 Period 1871-72 to 1892-93 - Period 1861-62 to 1899-1900 Period 1871-72 To 1899-1900 - Period 1861-62 to 1892-93 Period 1871-72 to 1892-93 - Conclusion - IV Regression Exercises with M1S in Place of M1A - 1861-62 to 1899-1900 1861-62 to 1899-1900 - Period 1871-72 to 1899-1900 - Period 1861-62 to 1892-93 - PERIOD 1871-72 to 1892-93 - Period: 1861-62 to 1899-1900 - Period: 1871-72 to 1899-1900 - Period: 1861-62 to 1892-93 - Period: 1871-72 to 1892-93 - Regressions of First Differences of Variables - Period: 1861-62 to 1899-1900 - Period: 1871-72 To 1899-1900-Period: 1861-62 to 1892-93Period: 1871-72 To 1892-93 -Regressions with Quasi-Stationary Values of the Variables - Period: 1861-62 to 1899-1900-Period: 1871-72 to 1899-1900 - Period: 1861-62 to 1892-93-Period:

372-425

1871-72 to 1892-93 - Testing for Stationarity - V Analysis of Price Behaviour with Rupee Census Derived M1 C as an Independent Variable - Period: 1875-76 to 1899-1900 - Period 1875-76 To 1892-93 - Regression Exercises of First Difference of M1C-Period: 1875-76 to 1899-1900-Regressions of Residuals - 1.1875-76 to 1899-1900 - 2.1875-76 to 1892-93 - VI Some Comparisons - 1. Atkinson Series - 2. Harrison - 3.Vakil and Muranjan's series - 4. Goldsmith Series - VII Testing Marshall's Hypothesis - 1861-62 to 1899-1900 - 1871-72 to 1899-1900 1861-62 TO 1892-93 - 1871-72 to 1892-93 - VIII Testing of Milton Friedman's Hypothesis - Effect of Rainfall and Capital Stock on Output Appendix 1: Results of Roll over Regressions - Roll Over Regressions with M1C Appendix 2: The Course of Retail Prices and Wages

21.

DEMAND FOR MONEY I. Introduction-The Theory of Demand for MoneyII. Demand for Money (M = M1S)-1. Period: 1861-62 to 1899-1900-11 Period: 1871-72 to 1899-1900-111. Period: 1861-62 to 1892-93-IV. Period: 1871-72 to 1892-93-111. Demand for Money (M=M 1A) - Money Demand using M 1A as Money Demand for Money in First Differences of the Variables Introduction of the Trend as an Independent Variable (Log Form) - Regression of Residuals - Conclusion-Testing for Unit Roots in the Series

426-435

22

THE SUPPLY OF MONEY Introduction - Trends-Silver Imports - Factors Determining Silver Rupees Supply - The Determination of Stock of Silver Rupees Issued - The Determination of Money Supply - M1 S / M1ABeyond Conventional Regressions

436-447

23

INTEREST RATE AND ITS DETERMINATION Introduction - Data - Determination of Interest Rates: Short Term Rate - Determination of the Long Term Interest Rate Testing for Unit Roots in the Interest Rate Series

448-455

24.

THE DETERMINATION OF REAL NDP AND RELATED MATTERS Sectoral Growth Rates - I. Agriculture - II. Mining and Manufacturing - III. Railway Transport - IV. Banking - V. Trade - VI. Smail Industries and Services - VII. Animal Husbandry, Forestry and Fishing - VIII. Residual Government - IX. Overall Real NDP - Determinants of Real Net Domestic Product Period: 1885-86 1899-1900 - Testing the Classical Hypothesis on Income Determination - Sectoral Contributions to NDP - 1) 1861-62 to 1899-1900 - 2) 1861-62 to 1872-73 - 3) 1872-73 to 1892-93 - Sources of Growth Appendix 1: Trend growth rates in real NDP and related Magnitudes - Testing for Unit Roots in the Variables

456-467

25.

THE EXCHANGE RATE OF THE RUPEE AND RELATED TRADE MATTERS Introduction - Exchange Rate and Related Matters Propositions about the Behaviour of the Exchange Rate Trends in Magnitudes Related to the Exchange Rate and Related Trade Items - Trade Ratios - London Gold Silver Prices Ratio - Determination of Exchange Rate and Other Issues . Determination of the Exchange Rate - Exchange Rate and Export Prices - Exchange Rates and Exports - The Effects of Exchange Rate Changes on Export of Different Commodities The Effect of the Falling Gold Price of Silver and of the Falling Exchange Rate on Government Finances - Government of India's Policy of Induced Appreciation of the Exchange Rate Trade and the Balance of International Transactions - Balance of Trade - Was there a Private Capital Net Out Flow During 1871-72 to 1892-93? - Was There a Net Outflow of Capital? Testing for Unit Roots

468-491

26.

PUBLIC FINANCE Factors Determining Government Revenues and Expenditures Testing for Unit Roots

492-500

27.

THE GENERAL IMPACT OF THE DRAIN ON THE ECONOMY I The Theoretical Significance of Unrequited Exports-The Indian Case - The Significance of Naoroji's own Contribution - II. The Quantitative Dimensions of Home Charges - The Drain Theory as a General Theory - Classical Economics and the Drain Theory - Components of Drain - The Potential Loss Due to the Drain - Econometric Analysis of the Drain Approach Correlations - Plausible Hypotheses - Empirical Tests of the Effects of the Measures of Drain on the Course of Important Magnitudes Drain and Money Supply - Drain & and Price Index - Drain & Merchandise Exports - Drain and Net Exports - Drain & the Exchange Rate - Drain & Government Expenditure - Drain & Government Revenues - Drain & Price Index of Agricultural Commodities - Drain & Merchandise Imports - The Effect of Home Charges on the Silver Rupees Minted - Drain and the Present Setting in India

501-519

28.

EXERCISE IN ECONOMETRIC MODELLING OF THE ECONOMY Introduction - The Relationships in the Model - PeriodizationEstimation - Period 1861-62 To 1892-93 - Simulation Results Period 1861-62 to 1892-93 - PERIOD 1861-62 to 1899-1900 Simulation Results - Period 1892-93 to 1899-1900 - Period 1892-93 to 1899-1900

520-545

29.

THE THEORETICAL FRAMEWORK UNDERLYING THE APPROACH TO ECONOMIC HISTORY IN THE STUDY The Components of the Classical Framework - Modification of Income Determination Theory-Modification of Employment Theory - Modifications of the Theory of the Price Level Modification of Theory of International Trade - Implications to

546-556

Britain of the Stationary State Postulate and its Effects on British India Trade Relations - Explaining British Economic Policy to India - The Significance of Massive Unrequited Exports from India - Modifications to the Classical International Quantity Theory of Money - Modifications to Theory of Exchange Rate Adjustment Mechanism - The Significance of Gold Holding by India - Modification of Growth and Development Theory Modification of Interest Theory - Conclusion

30.

THE QUANTITY THEORY OF MONEY: A RESTATEMENT ALONG CLASSICAL LINES Introduction - Assumptions - Meaning of the Six Assumptions Formalisation of the Classical Approach - The Speed of Circulation - Velocity - The Background of the Changes in the Economy - The Quantity Theory Approach in the Light of the Indian Experience during the 19th Century - Conclusion

31.

SUMMARY Indian Economy around 1860 - Statistical Gaps and New Set of Time Series - The Changing Profile of the Indian Economy The Course of the Economy: Empirical Account - Monetary Evolution - Currency History - Correlation Analysis Determination of the price level - The Demand for Money Supply of Money - Interest Rates - Determination of Real NDP Public Finance - Exchange rate and trade - The General Impact of the Drain - Macro Econometric Model - Theoretical Approach and its Modifications Underlying the Study and Flowing from it

557-567

PART IV HISTORICAL TIME SERIES OF THE INDIAN SUB-CONTINENT 1835-36/1861-62 TO 1899-1900

593-684

Prices - Production - Trade and Balance of Trade - Gold and Silver - Money And Interest - Public Finances - Gross and Net Domestic Product Estimates - Gross Capital Stock, Population and other Data - Time Series of Important Magnitudes 1835-36 to 1860-61 -Indices-Historical Data, 1861-62 to 1899-00-Contents BIBLIOGRAPHY

685-711

INDEX OF AUTHORS

713-718

INDEX OF SUBJECTS

719-728

CHARTS

729-744

Chapter 1

INTRODUCTION During the last five decades or so important analytical developments have taken place in the spheres of monetary and macroeconomics. New theories have been propounded and tested in regard to the supply of and demand for money, the determination of national income, the relation between money, income and the price level, the impact of the price level changes, actual and expected, on the rate of interest, the relation between the short-term and the long-term rate, the behaviour of income velocity of money, the relation between nominal and real money balances and nominal and real national income, the impact of money supply changes on the growth rate, the relation between the international economy and the course of domestic money supply and prices, the role of trade in growth, the influence of domestic and international price level changes on the exchange rate and such matters. The traditional quantity theory of money has been transformed into alternative frameworks. There has also been a major revival of interest in looking at economic history from an analytical, monetary and macro-economic angle. The placement together of all available information on key economic magnitudes for a long stretch of the period of the 19th century followed by a detailed study of the economy of the Indian sub-continent from the angle of modern monetary and macroeconomic analysis, also from a quantitative angle, and in the light partly of the developments referred above is the goal of this work. The reference period is the 19th Century especially from 1835-36 to 1899-1900. But most of the detailed analysis is for the period from 1861-62 to 1899-1900. 1861-62 is the year from which the modern budgetary processes begin in India and we are able to get a prices' series from the early Sixties. The statistical series on various economic magnitudes start becoming available from 1861-62 or from slightly later years. The Indian economy started getting the full brunt of international influences of the changes in the prices of precious metals from around this period, especially from the early Seventies. The completion of the Suez Canal around this time opened up enormous new trade avenues. A massive programme of railway development begins from the early Sixties. In the light of the Famine Commission Reports, public works construction, particularly in irrigation, commences from around that time. This was also the period when Naoroji presented his estimates of national and per capita income and, modifying the received transfer theory, drew attention to the cumulative adverse effects of the Home Charges (the 'Drain') on the Indian economy. Indian poverty, he argued, was due to un-British rule. The critique by Naoroji and by others made the British rulers in India somewhat sensitive and in reaction efforts began in the monitoring of the effects of the British rule on the Indian economy. The beginnings of growth of modern India commences from the early Sixties. This period also sees, the rejection by some Indian thinkers of the classical hypothesis underlying laissez-faire and free trade for India, thanks to the seminal contributions of K.T.Telang and Mahadev Govind Ranade.

2

Money, Income, Prices in 19th Century India

From a monetary angle, the period witnesses highly intensive and equally motivated controversies on the currency standard. India was on a mono-metallic, Silver Standard. James Wilson had introduced currency notes from 1861-62. Gold coins were being imported but they were not in circulation as money. The Imperial Power, the Ruler of India, Great Britain, was on a gold standard. British administrators and finance members of the Viceroy's council as well as British trading interests in India were conscious of the need to go over from Silver to Gold. But there was also a strong support for bimetallism in India. The Mansfield Gold and Silver Commission had suggested Gold, Silver and Paper to be the sources of currency in India. Hectic correspondence ensued between Calcutta and London as to the ideal standard for India. There was a widespread world interest on the monetary issues and problems of India. India's share in world trade, easily more than 7 per cent, had become quite significant. India also was taking up about 25% of the silver production and a significant portion estimated at 10 to 15 per cent of the world gold production as well, the former for coinage and the latter for store of value. The rest of the world desired such a standard in India as would not aggravate the presumed shortage of gold. There were two Currency Committees appointed in this connection - the Herschell Committee in 1891 and the Fowler Committee in 1898. There was also a remarkably prescient monograph in 1875 by R.H.Hollingbery on the Consequences of the Depreciation of the Silver rupee and the Rationale of Going over to Gold. Since the Gold price of silver had started falling from 1871-72, and the Indian exchange was falling heavily, there was a great concern about the postulated falling capital flows and the future of trade. The Government was worried about the rising fiscal burden of home charges, which had been also anticipated by Hollingbery. A movement began towards the closing of mints for free coinage of Silver and for the eventual introduction of the Gold Standard. The two Committees referred to above were concerned with these issues. Indian currency history of this period has been very well surveyed and documented both in the published dispatches between the U.K Government and the Indian Government and the two Currency Committee reports containing written extensively on the historical developments regarding the currency standard. Foreign scholars like Edward Kemmerer and Seymoor Harris have also documented this period. Our objective is not to duplicate the work in these areas already presented to the public. But a fresh look has become necessary. From a modem monetary angle, there are severe gaps of information. There is no credible money supply series which can be harmonised with the other data and developments. The series on prices, trade and interest rates after they had been compiled, had to be related to the factors determining money supply and the demand for the same. The ~elation between money and prices, which forms so important a part of monetary economics, has not been examined, empirically as well as theoretically. Naoroji's theory of the Drain was cast in a general mould. The empirical counterpart for the same in an interconnected manner was lacking. Naturally we have been motivated with a view to filling the large gaps of information and to build a reasonably credible and homogenous set of

Introduction

3

time series on crucial magnitudes like money. It is only after we had bridged the information gap that we could have embarked upon an analytical study from a modem monetary angle and could have tried to throw some light on the issues referred to earlier. During the course of this work we were able to throw some more light on many other related areas. Our method is not primarily that of a historian; nor are we aiming at a comprehensive economic history, though we have presented enough material to reconstruct the latter. The focus is this study is primarily on money, income, prices and related trade, exchange and public financial matters. We have kept the great work of Milton Friedman and Anna Jacobson Schwartz on the American economy ("Monetary Trends in the United States and the United Kingdom - their Relation to Income, Prices, and Interest Rates 1867-1975", Chicago University, 1983 and "A Monetary History of the United States 1867-1960", Princeton - 1963), as well as similar but narrow studies for the U.K as lamp-posts to guide us but our theoretical perspective is largely classical. And we emerge with some modifications to the great classical theories as a result of our investigations. Our focus is slightly larger than that of Friedman and Schwartz. We had to construct and reconstruct a large number of time series, which could be taken for granted by them. Secondly, the period of our study underwent a monetary revolution in 1893. A new perspective in the light of the infonnation and the modified classical theoretical framework has become necessary. An important question that emerges at the close of this work is as to whether the change over from Silver to Gold was strictly called for in the light of important counter - factual evidence. Our study begins from 1861-62, the year in which James Wilson presented the first modem style Budget for India. As noted earlier, the data on price indices are also available from that year onwards. The Indian economy had come under the British Imperial throne and Queen Victoria had been declared the Empress of India from the year 1858. Data on foreign trade consisting of imports and exports, both of merchandise and precious metals, are available from some years earlier. But on a consolidated and standardised basis they are available from 1861-62 onwards. The results of the first Indian Census are available only from 1872 and with a rough classificatory scheme. Dadabhai Naoroji's estimate of national and per capita income, though on a truncated basis, since it largely excluded the tertiary sector, is available for the early 1860's. Information on railways, irrigation and other public works also becomes available from around that period. So also regarding posts and telegraphs. The Indian Famine Commission made a rough estimate of production of foodgrains and non-foodgrains for the year 1880-8l. Sir David Barbour also used the same for making his own estimate of per capita income. Statistical abstracts started giving information from early 1880's for agricultural area and from around late 1880's for agricultural production. The livestock data is also available from the early 1880's. Data in respect of the price of Silver, the price Gold, the Gold-Silver ratio are all available specially for London and New York from very early years, say from early 17th Century onwards. Though rough information on Gold and silver imports are available on a stock basis for some early years, the information on silver imported,

4

Money, Income, Prices in 19th Century India

silver used for striking of silver coins and silver rupees struck at the mints are all available from 1835-36 onwards. Information on re-coinage is also available. However we do not have a precise series of currency in circulation, though Atkinson made some efforts in this direction to work out a series of active rupee coins in circulation from 1835-36 onwards. But these data are subject to a number of assumptions concerning hoarding/melting by private individuals for ornaments. He had made no adjustments for gradual wear and tear and depreciation of the Silver rupees. The information regarding paper currency notes becomes available from its inception in 1861-62. The information concerning bank deposits is available only from early 1860's. Production data in respect of industries becomes only gradually available though both jute and textile industry existed prior to 1860's. Information regarding Joint Stock Companies is available only from early 1890's. Rough estimates of capital investment in public works were made by Richard Stratchey and Henry Thornton and are available for 1880. Data on interest rates are available both for the bank rate and for long-term yields on a continuous basis from the early Sixties. National income series are not available on a continuous basis. Findley Shirras resorted to the procedure of construction of an index for growth of business on the basis of the miscellaneous data that were available. This index begins from 1890-91. Later D.B. Meek also constructed an index of industrial activity for the period of the second decade of the 20 th Century onwards. Atkinson made elaborate efforts to build some time series on a number of magnitudes from early 60's onwards. Though he made estimates of income for two reference years 1875-76 and 1894-95, he did not aim at continuous series say from early 60's onwards. William Digby's data pertain to the late 1890's, mostly to the famine year of 1899. The period from 1861-62 to the end of the 19th Century is a sort of a grey or even dark period from the angle of empirical/quantitative monetary, macro-economic history. Such a history requires continuous series of money stock with its magnitudes, national income estimates at current and constant prices, foreign trade and balance of payments statistics, appropriate price indices, interest rates, and Government's revenues and expenditures along with their major components. We also need information regarding the prices of gold and silver, the gold silver price ratio and the stocks of gold and silver at periodic intervals. Precious metals played a very important role in this period as metallic currencies were the dominant form of money and almost every economy, including India, was an open economy. Our first task has been to equip ourselves with as many time series and on as homogeneous a basis as possible, and on the basis of the scouting for information from all quarters and sources of that, or pertaining to that, period. This has been a rather difficult task because books and reference sources of that period and in that period are not available in anyone library not even in the archives. The materials out of which the books and reports have been made in most cases have worn out. Statistical abstracts on a continuous basis are also not available at anyone place. With the dominant interest after Independence on current issues and current information, the storing of books and materials pertaining to economic history of century and a half ago has ceased to be of contemporary attention. It is obvious that, in course of time, the Indian economy will surely gain a measure of economic strength and it will

Introduction

5

look back to the past for building its history from a new angle. This type of angle is now possible with increased accessibility to, and availability of, computers that not merely store information but also handle large series from an analytical and econometric angle. We therefore decided to fill the inforn1ation gap pertaining to the period in respect of all major economic magnitudes. In the process we have been able to present a continuous set of historical and statistical series for nearly 160 important economic magnitudes or variables.

Some Background Features The following background features should be kept in mind in appraIsmg the economic history of the Indian sub-continent during the 19 th century. The 19th century was the period during which the British Government consolidated its sovereignty over the whole of the sub-continent. It is believed that by about late 1830s, the suzerainty of the British Government had been more or less established and certainly so by about early 1850s. Portions constituting British India were directly under British administration. The portions constituting Native States were indirectly under British rule with British residents appointed in most of the states. The Native States used to pay some annual tributes to Government of India, which was the instrumentality of the British administration in India. Queen Victoria was declared the Empress of the India in 1858. 2. Though the currency system was standardised and made uniform by 1835-36, financial administration of the Government of India particularly in fiscal matters was modernised only from 1861-62. Systematic presentation of statistical data on demographic, production and price matters commences only from the 1860s. Information regarding broad categories of trade, currency mintage, home charges, revenues and expenditures are available from mid 1830s. The information on prices begins from 1861-62. It is from the Census 1881 onwards that population data become more systematic. Agricultural data in respect of acreage and production are available only from early 1890s. 3. Silver rupee was the dominant form of currency from 1835-36 onwards. Gold mohurs were in informal use, may be, been till probably early Sixties. Gold sovereigns were imported but primarily for ornamentation and hoarding purposes Currency notes begin from 1861-62 onwards. Earlier, the leading Presidency Banks would issue their own notes but this power was taken away from them when once Government of India currency note was introduced. The maximum amount of bank notes that would have been issued prior to the induction of Government of India notes may not have been more than Rs.3 to 5 crores. 4. Throughout the 19th century, Britain was the leading economic power in the world. The British monetary system was anchored on the gold standard. Currency notes of Britain were fully backed by gold. But India was on the silver standard till 1893 from 1834-35. The dominant exchange rate for India was that between the rupee and sterling. For most of the period prior to 1861-62, the exchange rate was broadly around Rs.10/- per sterling. That was the rate in 1835-36 as well. Indian public finance data expressed in pound sterling were converted into rupees I.

6

5.

6. 7.

8.

Money, Income, Prices in 19th Century India

at the above rate of Rs.l 0/- per sterling. This practice continued till 1899-1900 from which year the statistical conversion rate seems to have become Rs.15/- per pound sterling. The rupee figures on public finance from early 70s to 1899-1900 would have over-estimated the exchange value of rupees per sterling since during this period the exchange was falling because of the falling gold price of silver. Even though the link with silver ceased in 1893, the exchange rate reached Rs.15/- per pound sterling (16 pence per rupee) only by 1898-99. The statistical data for the period suffers from deficiency of homogeneity of area and inadequate precision, a defect, which was getting rectified over the period. Britain was under the influence of free trade and laissez-faire policy. Free trade meant that the import and export duties had to be abolished or reduced in all countries irrespective of the stage of development. Belief in laissez-faire meant that Government had to withdraw itself from the direct and/or indirect role in economic, in especially commercial, activities. Barring minimal functions concerning maintenance of law and order, administration and justice, external security and spartan public works, Government had no role in the economy. Even central banking functions had to be performed by largely privately owned and directed central banks. There was, of course, the monopoly of note issue given to the central bank, but the volume of money supply had to be determined by market demand and levels of gold reserves. The cardinal goal was to maintain the exchange rate of the country in terms of gold. The working of the domestic economy had to sub-serve the above objective. In so far as India was concerned, the British administration followed the policy of free trade, removing or reducing import and export duties. Because of the heavy dependence upon rainfall, the Indian economy was prone to droughts and famines. The Government of India took the initiative in establishing and developing irrigation works, productive and protective. Famine-relief operations including provision of work at wage rates just close to subsistence, was part of the Government activities. But here the idea was that too liberal a provision and at higher wage rates could lead to higher population growth and to indolence. The Famine Commissions therefore kept the wage or the dole rate at minimal levels. The Government also had monopoly in forests and the controversial opium trade. These were sources of revenue. The Government took great initiative in railway development, also because it felt that this would facilitate movement of goods and reduce the incidence of famine. The railway development was also encouraged through private companies who were guaranteed minimal rates of return. This was a method devised to protect the companies against risk of losses and to encourage capital investment to take place in railways. Government took pioneering interest in development of telegraphs and postal services, though these did not yield commercial rates of return. But Government did not undertake any initiative for establishment and development of industries nor did the Government take the required initiative in the field of education, particularly primary education. Throughout the 19th Century English classical economics dominated economic thinking. Ricardo's "Principles of Political Economy and Taxation" was the

Introduction

7

leading theoretical work. Adam Smith's "Wealth of Nations" was very well known. John Stuart Mill's "Principles of Political Economy" was the most popular economic treatise. Indian scholars like Naoroji, R.C.Dutt, M.G.Ranade and others were well read in the leading economic works of that time. The monetary writings of Jevons were also well known in India. The Indian officials were well acquainted with the controversies concerning the Banking and Currency schools. International monetary economics was dominated by controversies concerning the standards, gold versus gold plus silver, and silver. The Economic Journal had commenced in the 1890's. Some articles on Indian economic matters used to appear from its inception itself. But it was the Journal of the Royal Statistical Society, which was the receptacle for publication of a number of important articles concerning India. The Calcutta Review and the Asiatic Review were also media for learned articles on economics. It is interesting to learn that the Finance Members of the Council of the Governor General in India were generally learned in economics. Richard Stratchey wrote a study on public works in India. Richard Temple also wrote on India. Charles Trevelyan was also well versed in economics. James Wilson, the first Finance Member, was reputed to be a good economist. Sir David Barbour was an authority on bimetallism. Many economists gave evidence before the Indian Committees. Henry Macleod, the English monetary economist wrote a book on Indian Currency. Hollingbery prepared a monograph in 1875, examining in detail the consequences of falling drift in the Gold price of Silver and anticipating a number of future developments including the collapse of bimetallism and the onset of the gold standard in a number of countries. J.T.Smith as early as in 1876 visualised a gold standard without a gold currency. Both A.M.Lindsay and L.Probyn came up before the Fowler Committee with novel schemes based on Ricardo's ideas. A most important event was the Government of India's proposal to reduce the relative volume of currency in circulation with a view to firming up the exchange rate. It was during the discussions before the Fowler Committee that the concept of an exchange standard emerged. We refer to these developments as symbolic of the nature of the learned discussion on intricate currency and trade matters of that time. India was an important trading country. Not only in England but both in the continent of Europe and in America, Indian currency and trade issues attracted wide attention. The Indian Currency Committee Reports themselves contained valuable comparative information on monetary system in different countries of the world at that time. 9. India's standpoint on monetary matters was represented from India predominantly by Anglo-Indian and resident-Britishers, as also British civil servants and officials. Dadabhai Naoroji, R.C.Dutt and Merwanji Dalal were the only three exceptions. In fairness, a number of British, resident in India and others, took up cudgels on behalf of India's interests, as they perceived it. The sittings of both the Herschell and the Fowler Committees were all in London, there was no Indian among the members. This practice changed by the time of the Chamberlain Commission in 1913.

8

Money, Income, Prices in 19th Century India

10. Our data and analysis pertains to the whole of the Indian sub-continent, though some data especially on public finance refer only to British India.

Chapter Scheme This volume is divided into four parts. Part I is concerned with the identification and filling of statistical gaps specially with the compilation of time series of NDP and related magnitudes and of Money stocks. These two variables are indispensable in any macro-economic study. After Introduction in Chapter 1 outlining the nature and scope of the study, Chapter 2 in Part - I brings out the major statistical gaps in the time series. There are two appendices, one on the new price indices and the other on the contributions of FJ.Atkinson, who can be considered as the pioneer in National Income Estimation in India on modern lines. Chapter 3 is concerned with the estimation of 2 sets of NDP series according to sectors with special notes in the 6 Appendices, three of which compare our estimates with those of Atkinson and Heston. We have reconstructed agricultural and food grains output series by means of the back-casting approach. An alternative estimate based on land revenue data is also presented. The text of the chapter contains a new time series on modern mining and manufacture. Chapter 4 which contains two appendices deals with the important theme of the estimation of two sets of time series of Money stocks with their components, one based on the cumulative net stock approach and the other on the cumulative net absorption approach. Comparisons with alternative, though not continuou~, series of Atkinson, Harrison, Goldsmith etc., are presented. Chapter 5 discusses the historical Rupee Census approach developed by Harrison to money stock estimation and its limitations; it presents a new estimate of Rupee Censusderived Money Stock series. It also contains an Appendix dealing with the methodology of Jevons in regard to estimation of gold coins in circulation in England. Chapter 6 presents time series, with notes on each concept, for 166 economic magnitudes for the period 1861-62 to 1899-1900. It also gives statistics regarding mean values, standard deviations and the coefficients of variation for these magnitudes along with log-linear regression derived trend growth rates for the magnitudes for the periods 1861-62 to 1899-1900; 1861-62 to 1871-72; 1871-72 to 1892-93 and 1892-93 to 1899-1900. The Appendix to this Chapter gives graphical representations of the course of 72 select variables for the above four periods along with their linear trends, classified under the following heads. 1. Population, Capital, Production and Income; (1-13) 2. Prices; (14-21) 3. Trade and Related Matters; (2239) 4. Silver Rupees, Money and Interest; (40-59) 5. Public Finances and Drain Measures; (60-72). Part II is concerned with the analytical history of the period from 1835-36 to 186162 and in more detail from 1861-62 to 1899-1900. Chapter 7 presents an account of Indian economy around 1860's with the help of time series from 1835-36 to 1861-62. Chapter 8 gives an account of the changing profile of the economy during 1861-62 to 1899 with an overview of the main developments during the whole period, with data for four benchmark years. Chapter 9 brings together from highly dispersed sources a detailed chronological account of the currency history of the nineteenth century and follows it up in Chapter 10 with a brief account of monetary evolution during this

Introduction

9

period, with attention to the currency proportion, the money multiplier, the cash reserve ratio, velocity movements, etc. Chapter 11 outlines a theoretical backdrop to the currency controversies and discusses the five angles on the currency issues. Chapter 12 begins with a full account of the remarkable report of R.H.Hollingbery in 1875 and then gives a brief resume of the events leading to the appointment of the Herschell Committee. After summarising the evidence of different persons before the Committee an abstract of the Report is given. After narration of the events before the constitution of the Fowler Committee, Chapter 13 presents in detail the evidence before the Fowler Committee. It gives a brief account of the developments in the period prior to the commencement of the falling drift in the gold price of silver and in the exchange rate (1861-62 to 1871-72); then it deals with the period of the falling exchange rate with the falling gold price of silver (1871-72 to 1892-93); thereafter it takes up the period after the closure of the mints till the advent of the gold exchange standard (1892-93 to 1899-1900). At the closing portion of Chapter 17, we give a year by year account of the course of the economy. This account is taken from a rare "Annals" of that period. Chapter 18 seeks to distil some important lessons of later significance from the currency and related experience of the period. The issues raised here are: did the falling exchange rate benefit India? Was the closure of mints strictly necessary? Could the Silver standard have been continued? What is the contemporary international significance of the nineteenth century events? This Chapter ends with an Appendix dealing with select Indian contributions to the currency issues of the 19th Century. References have been made to the works of J.C.Coyajee, B.R.Ambedkar, H.L.Chablani, S.K.Sarma, P.BJunnarkar, C.N.Vakil, S.K.Muranjan and others. These had all developed distinctive standpoints, thus establishing the rich tradition of Indian monetary economics. Part III is concerned with an empirical, quantitative, analysis of the course and behaviour of the crucial variables, supported by econometric evidence; it also deals with general issues flowing from the study and the refinement of classical theory; the quantity theory is recast in the light of the experience in price behaviour. Chapter 19 presents a discussion of the correlation matrices, both trended and detrended, along with graphical presentation of the movement of some variables. An effort is made to discover whether there were any cyclical changes. Chapter 20 scrutinises econometrically examined at length, by the aid of different techniques, the factors determining the price level with alternative money stocks among the independent variables. The classical Quantity Theory equation concerning the price level determination has been expanded to take into account rainfall and the exchange rate. Fisher's equation of exchange has been transformed to suit testing purposes. The Chapter also examines whether that determined the course of price level in India and in the UK, and whether money as such has any effect on output. Alternative time series have been compared in regard to their efficiency in accounting for the course of the price level. There are two appendices dealing with the result of rolling regression and the determination of retail prices of foodgrains. Chapter 21 deals with the factors determining the demand for money along Marshall-Friedman explanations. Here also alternative techniques are employed. The significance of the real balances has been

10

Money, Income, Prices in 19th Century India

tested. Chapter 22 deals with the alternative factors detennining the supply of silver rupees. The crucial role of the Council Bills in the supply of silver rupees is highlighted. It also examines factors detennining M1S/M 1A and the relationship between High-powered money, and the cash ratio and M1S/M1A. Chapter 23 is concerned with the behaviour of the short-tenn and the long-tenn rates of interest in India and the factors detennining each. A number of hypotheses concerning them are explained. A comparison of the two rates in India and the U.K is also presented. Chapter 24 deals with the detennination of the real GOP and inquires into the sources of GDP growth during the period. The classical theory of income-detennination is tested. Chapter 25 deals with the detennination of the exchange rate and related issues concerning imports and exports. The trends in exchange rate and related magnitudes are given. The effects of the exchange rate on exports and imports aggregate and commodity-wise, and on export and import price have been examined. We take up the issue of whether the induced decline in relative money stock in relation to output after the mint closure helped to move up the exchange rate. We then examine issues connected with balance of trade and seek to answer empirically the question of whether there was a net export of private capital during the period 1871-72 to 189293. Chapter 26 gives an account of Public Financial Issues and the factors detennining Government Revenues, Government expenditures, tax revenues etc. In all the above empirical chapters in Part III, the general four period points of reference have been kept. Chapter 27 reconsiders the Drain theory in the light of new quantitative and econometric evidence. Various measures of Drain have been presented and the different hypotheses associated with the Drain and its effects on the general economy have been empirically tested. Chapter 28 presents a macroeconometric model for the periods 1861-62 to 1892-93 and 1861-62 to 1899-1900. There are fourteen equations consisting of ten structural and four identities. We discover a structural break around 1893, when the mints were closed. Ex-ante hypothetical projections based on the 1861-62 to 1892-93 coefflCients for the period 1892-93 to 1899-1900 are presented. This yields a counterfactual scenario, and shows that had the mints not been closed, the course of the economy might have been probably along more prosperous lines. This finding links with our earlier appraisals of the course of the economy. Chapter 29 outlines the theoretical framework, generally underlying our study. The framework is the modernised classical theory. The essentials of this framework with respect to the theories of income detennination, money and prices, international trade, transfers, international money, interest rates, exchange rate, growth and development are briefly presented. Important modifications have been carried out in the early classical theory also in the light of the Indian economic situation in the 19th Century. Chapter 30 sets out in detail the classical quantity theory of money under various background situations and presents the required modifications and extensions to suit the Indian economy in the light of international situation. Chapter 31 briefly presents the summary and the main propositions emerging from this book. Part IV at the end of the narrative gives the full historical statistics under 13 blocks with explanatory notes and with select graphs. It also gives available statistical series from 1835-36 to 1861-62. The Datta Report on Price contains valuable infonnation

Introduction

11

from 1890-91 onwards. We have put together all the series from this Report for the period covered by the Datta Report and for a few years earlier. A comprehensive bibliography pertaining to the whole period of the latter portion of the British rule has been compiled and given at the end followed by 16 charts. Some observations about the econometric exercises conducted in Part III may not be out of place. Conventional multivariate single equation regression procedures have been followed except in Chapter 28, where a simultaneous equation model is presented. The results of usual tests have been given. These are subject to the well-known limitations of the OLS technique like errors of specification, errors in variables and small sample biases. Since we are utilizing the time series as the basis for the exercises, there may also be limitations arising from the Granger critique on account of probable differences in trends of the different variables included. Though we have tried OLS exercises by removing the trend, by concentrating on first differences of the variables and by using the time-eschewed-residuals, these may not be deemed enough. Therefore, we tried to attend to the problem by verifying the stationarity properties of the time series through standard tests. We are aware that more complicated econometric techniques can be used, but the whole researches in this area do not seem to have reached a settled stage. In the classical economic theory, whenever an independent variable varies, the dependent variable gets into equilibrium state without passage of time. Hence it is a moot point whether the error correction models are applicable in that case. The whole issue of the theoretical meaning of the error-correction models needs a thorough examination by itself. Each equation, in the absence of lagged exogenous variables, is deemed to the selfcontained within itself in that the exogenous variables determine subject to econometric procedural tests, the behaviour of the endogenous variable. Different values of the exogenous variables result in different values of the endogenous variable. The approach is of comparative statics. The larger the scale of the exogenous variables, the larger would be the determined values of the endogenous variable subject to the signs and magnitudes of the coefficients. Here time enters in fixing the scale of the exogenous variables. The questions asked are - are the exogenous variables independent of each other? Do they exhaust the probable determinants? Are the exogenous variables and the endogenous variables separate in terms of their identities? Is the empirical information unbiased with reference to the specification? Can we have an alternative set of exogenous variables, which can yield results satisfying higher tests of significance? Are the error terms correlated among themselves in the seqlience? And so on. If the comparative statics approach is what lies at the back of the economist's econometric testing, and we are eschewing lags, it seems the Granger Critique may not apply to the use of time series in regression exercises. The numbers at different time points are no different from the same in cross section single point of the observations. Even when we use first differences, the essence of the comparative statics approach remains. If we want to use lags, whose quantitative impact goes on diminishing, we have to take apprc1priate groups of periods in our observations and the comparative static approach could apply. The comparative dynamics approach takes into account larger and larger magnitudes of the exogenous variables. Each set of values of the different variables and the relevant value of the endogenous variable forms one observation. Growth can be handled from this angle without getting subjected to the Granger Critique. If these observations are tenable, the econometric exercises in this study may probably be free from the above critique.

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~----------~~PARTII~----------~ GAPS IN HISTORICAL STATISTICS NET DOMESTIC PRODUCT OF THE INDIAN SUBCONTINENT FOR THE PERIOD 1861-62 TO 18991900 ESTIMATION OF MONEY STOCK SERIES THE RUPEE CENSUS TIME SERIES OF MACRO ECONOMIC VARIABLES

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Chapter 2

GAPS IN HISTORICAL STATISTICS Changes in Methodology of Economic History Economic history has undergone a revolutionary change in its methodology. In earlier years economists used to provid~ quantitative information, wherever available, in order to elucidate and analyse economic change over long periods. History consisted of narration of events and their dating. In economic history, broad developments in key magnitudes like those pertaininr to agriculture, industry, labour, trade, money, prices, public finance and incomes would be presented and explained. There were also specialised histories pertaining to some of the variables. In the case of the Indian sub-continent also, scholars like C.N.Vakil (money and public finance), S.K.Muranjan (prices and banking), K.T.Shah (public finance and national income), Pramathnath Bannerjee (fiscal policy), J.C.Coyajee (currency), K.C.Mahindra (currency), Das Gupta (paper currency), Brij Narain (prices), B.F.Madon(currency),S.V.Doreswamy Iyer (currency), H.L.Chablani(currency), R. S.Sharma (currency), S.G.Panandikar (banking and fiscal policy), V.G.Kale (currency and tariffs), Parimal Ray, Durga Prasad (trade), B.R.Ambedkar (currency and finance), Rai Chaudhury (history), Nabendu Sen (money and finance), Arun Ghosh (prices), V.K.R.V.Rao, A.Heston, Mani Mukherji (national income), Dharma Kumar (economic history), Savyasachi Bhattacharya (colonial impact), George Blyn (agriculture), David Morris (transport), Daniel Thorner (railways), Alice Thorner (occupational changes), Arun Banerji (balance of payments), Amiya Bagchi (banking), K.N.Chaudhury (economic history), B.R.Tomlinson (Economic History), Dietmar Rothemund (Economic History), P.Gopalakrishnan, V.B.Singh, J.J.Spengler, A.D.Karmarkar, B.N.Ganguli, Bhabatosh Datta (history of Indian economic thought), S.Ambirajan (monetary management) and others apart from a number of distinguished authors mentioned in Tomlinson's "The Economy of Modem India", Cambridge - 1993, have presented valuable material and accounts of our history and also from specialist angles. Many of them have made efforts to present time series. But in present day economics, with the impact of the quantitative revolution, historical accounts depend upon interpretations of time series of different variables. In such interpretations, various hypotheses concerning the relationship among different variables are tested by means of econometric techniques. For example, Milton Friedman and Anna Schwartz in their seminal work on the monetary history of USA and UK have applied the quantitative technique primarily through the single regression approach and have reinterpreted aspects of economic history with the aid of new hypotheses. Peter Temin subjected their hypothesis concerning the impact of sudden reductions in money supply as the primary cause of the Great Depression of the 1930's to detailed scrutiny. Similarly various aspects of economic history of the U.S.A have been subjected to econometric study over long periods. (See the works of North and of Fogel). In this study which deals with the period from 1835 to 1900 and more intensively from 1861-1900, we are primarily concerned with macro economic magnitudes of

16

Money, Income, Prices in 19th Century India

money, income, trade, public finance, the exchange rate and prices, and the interrelationships among them.

Important Variables and Their Role During the period of study, narrow money (M1) consists of silver rupees, other small silver coins, copper coins, currency notes and private demand deposits of banks. Broad money (M3) consists also of fixed deposits with banks. The term Stock of Money is used because of the long durability of silver coins; besides the scope for withdrawal of money was limited. Silver coins, the dominant portion of money, when they came into existence, continued to remain as such unless they were worn-out by use or were converted into ornaments etc. Silver rupees were the most dominant portion of silver coins. These were unlimited legal tender. The public could give silver to the mints and obtain mint certificates, which would be redeemed in silver rupees by the treasuries. The bulk of silver imported was getting converted into silver rupees. From 1835-36 to June 1893, the economy was on a silver standard. Gold coins were not in circulation among the public except probably during the great cotton boom of the early and the late Sixties, when Gold bars were reported to have been used as media of exchange. The latter was the period when the Authorities wanted to reduce the money stock and interest rates had reached high levels. But the use of gold bars could have been only for a very limited period. Gold mohurs had been earlier demonetised in 1852 though they were brought back in the Sixties in the form of acceptability by the government. Analytically, money is a most important macro magnitude. In relation with velocity it would determine the magnitude of money demand for goods during the year. Given the supplies of goods, it would determine the level of prices. There would, of course, be other influences like the exchange rate, the state of the weather, the expectations concerning the prices and the interest rate. One objective of the study is to estimate money stock series (and income series) and relate them to prices. We have also to examine the nature of the demand function for money and the factors determining the supply of money. Monetary evolution has also to be studied. Another important macro-economic variable is National product or National income, gross and net, at factor cost and at market prices as well as per capita magnitudes of the same. The size of the national product magnitudes is important as a source of aggregate supply and of aggregate demand. The classical theory emphasises that aggregate capital stock and aggregate labour, working upon given stock of natural resources, enables national product to be produced. The unit period for accounting is the agricultural year. In India it would stretch from July of the current year to June of the next year. Agriculture is the most important activity in the economy, and on it are dependent related activities like animal husbandry. Generally forests and fishing along with mining are classified with agriculture and animc.I husbandry as primary activities. Agricultural production would be subject to the state of the weather, given the supplies of tools and implements and livestock inputs. Labour is also an important non-commodity input. During the period of our study, organic manure would be important but not chemical fertilisers nor pesticides. Ploughs, sickles, carts would be important

Gaps in Historical Statistics

17

instruments. Water supply would be dependent upon state of the monsoons and also from stored water sources like tanks and wells. Supplies through irrigation channels were becoming important in portions of India. Climatic variations were very frequent. Droughts would be represented by failure of rainfall, which would affect the flow of agricultural and related productions. Severe droughts will lead to famines, chiefly characterised by want of employment and want of subsistence supplies. Prices would also go up during famines, and during bumper harvest, prices would come down. Instability of agricultural production because of climatic upsets is an important feature during this period. Naturally, farmers would make efforts to store grains for the lean seasons. Land revenue was a very important source of taxation amounting to nearly 2% of GDP or about 4% of agricultural value added at market prices. Land revenues were being paid in cash. In order to pay land revenue, crops had to be sold. The requirement of money was partly for payment of tax in cash. The system of taxes in cash popularised the use of money. Generally there would be one crop in a year and when water supply was abundant, there would be two crops. A diversity of crops was grown in the country. The farmers would have been dependent upon trade and money lenders for loans for working capital requirement and for maintenance during lean periods. The bulk of the debt would have been for maintenance of human beings and cattle. The most important task is to estimate a production series of agricultural crops, as also of agriculture related activities. Agricultural products constitute the main source of direct and indirect consumption. Foodgrains and other food articles are the chief components of wage-goods. Producers of non-food crops would also exchange them for food products. Agriculture also was the chief source of supply of raw material for cloth production. Salt, sugar/gur and cloth (also kerosene) were important wagegoods. The flow of supply of wage-goods out of stocks and production enabled labour to subsist and to work. Hence the aggregate flows of wage-goods help to determine not only the output flows in the wage-goods activity but also in the other activities. During the period of our study mining and manufacturing activities in large and small industries had not yet become a chief component of national product. But the beginning of industrialisation occurs during period. Small industries were an important source of employment and supplies of products, specially in textiles. There was some substitution of the latter products by imports and supplies from large industries. Other industries which were important during the period were: engineering, jute and silk textiles, paper, breweries, wood products, leather products. Because of the reduction and abolition of import duties, domestic industry was getting adversely affected. The country depended upon imports for machinery and related supplies. The process of investment in real terms depended considerably on import of materials. Machinery imports were rising at a high rate during the period. Other components of national product were chiefly in the tertiary sector. Here the important source of tertiary activities were raiiways, postal and telegraphs, port services and government. Banking and financial services were in the early stages of development. Construction sector was mostly in the informal sector. We have tried to work out

18

Money, Income, Prices in 19th Century India

sectoral estimates of national product. The following are the sectors: agriculture, forestry, fishing, mining and manufacturing, small industries and services, railways, real estate and housing, banking and finance and residual government. A key macro magnitude is the level of prices. We have specially worked out a number of new prices series like the price index of wage-goods, a new general price index, export prices index and import prices index, index numbers of agricultural and non-agricultural products' prices. (In view of the important trade relations with Britain since the two countries were in different standards we have also constructed an index of Gold prices of commodities in India.) We have also worked out a general deflator with appropriate weightages for commodities and services. We have also indices of prices of gold and silver. The London gold-silver ratio is an important magnitude; the period witnesses a fall in drift in the Gold price of silver. We have tried to examine the causes for the fall by relating it to the ratio of Gold stock to Silver stock in the world. An important macro category is that of investment. We have worked out a series of gross capital stock by utilising the data on Government capital expenditure and relating the latter to gross investment. We have linked the series to our estimates of growth of gross capital stock for the 20th century based on the consumption of steel, cement and machinery. We have worked out ratios of gross investment to GDP at market prices. Gross investment is important as it figures in some theories as a source of explanation of the level of national income via multiplied influence of investment demand on national product. India was an integral part of the world economy during this period. It was an important exporter of raw materials, agricultural products and minerals. It imported largely luxury consumer goods, metal products, textile products, machinery and stones. It normally exported more than it imported. The net exports paid for the drain payments and also enabled imports of treasure. India was a leading importer of silver and gold. Gold was imported for non-monetary-circulation purposes. India was also a debtor to the rest of the world. She was a net importer of foreign capital. We have information on several magnitudes connected with trade, like exports of merchandise; imports of merchandise net exports; import and exports of treasury. We have been able to work out series of nominal and real trade magnitudes. The balance of trade arcounts have been worked out primarily for the trade and public sector transactions. A full length estimation of balance of payments series has been attempted recently by Arun Banerji. We have tried to put together available data on trade and have constructed special price indices of exports and imports with suitable weights. The period witnesses a falling drift in the Gold price of silver and in the exchange rate of the rupee with sterling. Data on all these have been compiled. We have aggregate data on public finances: specially on public revenues, public expenditures and public debt. The public finances were affected by the exchange rate because of the drain payments. Fortunately useful information is available on macrocategory of finances like government revenues and government expenditures; we have also estimates of the drain or home charges. We have used three measures of

Gaps in Historical Statistics

19

drain, that of C.N.Vakil; that of K.T. Shah and that of Arun Banerji. The drain is a very important determinant of a number of other key magnitudes.

Information Gaps The compilation and the putting together and the computation of historical time series is one of the chief objectives of the study. In our journey, we found a number of gaps of such series concerning crucial economic magnitudes. The most serious gap pertains to the money stock and its magnitudes. There is no dependable time series concerning: 1. 2. 3. 4.

Silver rupees and silver coins in circulation, Demand and time deposits, High powered money, and M1 (narrow money) and M3 (broad money).

The estimation of money stock series has been an important empirical objective of the study. We have worked out three money stock series - one by accumulated net stock approach, the second by the cumulated net absorption approach and the third by the rupee census methodology. The three money stock series are close to each other for comparative periods. The data regarding bank deposits are available only from 1870 onwards. For early years we obtained special information regarding deposits of the Bank of Bengal, Bank of Madras and the Bank of Bombay from the Chairman of the State Bank of India, who took special pains to collect the above data. We have made some adjustments for the information regarding the other banks for the years prior to 1870-71. On the basis of some information available in the Chamberlain Commission's Report and material attached to it, 55% of the Presidency Banks' deposit are deemed to be Demand Deposits. As regards the other banks, on the basis of the information contained in S.K.Muranjan's "Modem Banking", for the early years of this century, we placed 25% of other Banks deposits as demand deposits. In demand deposits we have preferred to exclude Government deposits in the Presidency Banks. There is some ambiguity about the M 1 nature of Government deposits. The information regarding cash with banks has been taken from Banking and Monetary Statistics (BMS) published by Reserve Bank. Data are available only from 1870-71. The values of the money multiplier, the currency ratio and the net worth ratio have been computed by us. Though there are point-year estimates of Real National Product (NDP) and a series thereof from early 1870s, there is no NDP series for the whole period and both at current and constant prices; there are no series concerning the components of the NDP for this period in its entirety. As regards prices, we have the Government of India price series as well as that of FJ.Atkinson. But both the series are not completely comprehensive in regard to the general as well as subsets series. There is no series of the weighted index of prices of exported articles and of prices of imported articles. There is also no series of agricultural and non-agricultural prices. There is also no series of the index of prices

20

Money, Income, Prices in 19th Century India

of wage-goods. In the absence of weighted index number series for imported articles and exported articles, the time series concerning real (constant prices) series of imports of merchandise and exports of merchandise are not available. Index numbers of Indian prices published by order of the Governor General in Council by Department of Commercial Intelligence and Statistics of Government of India cover the period from 1861 to 1939. The index numbers are: 1. Exported articles (28 articles and un-weighted). 2. Imported articles (11 articles and un-weighted). 3. General index for all (39 articles again unweighted) 4. Weighted index number (100 articles, the weights as given by F.J.Atkinson) 5. Index number of the retail prices of the foodgrains (rice, wheat, jowar, bajra, gram, barley and ragi again unweighted) The publication also contains time series concerning the average price of bar silver at Bombay and average rate of exchange per rupee in terms of pence. It also contains information of comparable index numbers of prices of UK, Canada, US, France and Australia. Most of the quotations for the articles in the index numbers ofIndia seen to have been pooled at Calcutta followed by Bombay. The exported articles consisted of foodgrains, sugar, tea, oil seeds, jute, cotton, coal, saltpeter, indigo etc., The index number for imported articles consisted of sugar, salt, cloth, iron, copper, coal and kerosene oil. In the Atkinson index, food articles had a weightage of 60, raw produce of 29, and manufactures of 11. The articles were of staple products of India; imported articles did not get their importance. The index number of wholesale prices in Calcutta (end of July 1914 = 100) included sugar, tea, other food articles, oilseeds, mustard oil, raw jute, jute manufactures, raw cotton, cotton manufactures, other textiles, hides and skins, metals, other raw and manufactured articles and building materials. Within each group of commodities several articles are included and the general index of simple unweighted average price relatives of different groups. As mentioned earlier, we have constructed special index numbers of prices of wage-goods, prices of agricultural and of non-agricultural commodities, prices of export articles, prices of import articles, all with suitable weights. There is a general deflator. Appendix 1 to this chapter gives an idea of the new prices series constructed by us. There is no series of long-term interest rates for the whole period though a series of annual averages of bank rates is available. There are no time series of capital stock and of gross investment. There is no series of agricultural production and of manufacturing production for the whole period. There is also no series of balance of payments data on the current account though data regarding merchandise trade and gross and net treasure imports are available. It is, obviously, difficult to work out, in terms of both historical, analytical and quantitative methods, in the absence of missing series, an account of the progress of the economy and its people. The great controversies regarding the currency and the standards have to be reinterpreted in the light of the comprehensive information with the above gaps being filled. This is the

Gaps in Historical Statistics

21

reason why we began first with the construction of an inventory of historical data in the form of time series regarding the economic magnitudes. We have tried to fill the gaps in information referred to earlier for the entire period 1860-61 to 1947-48 but in this study we are concerned with the period 1861-62 to 1899-1900. In order to make the study comprehensive from the time angle, we have also provided historical time series wherever available from 1835-36 to 1860-61. Part IV of this work provides the full statistical information on all the related magnitudes in the form of time series with notes on the methodology of derivation of some of them and the sources of data.

Time Series of Economic Magnitudes from 1835-36 to 1860-61 We have tried to pool together as much information as we could obtain from different sources regarding the time series of important variables from 1835-36 onwards to 1860-61. Data regarding merchandise exports have been taken from Atkinson's articles in 1897 on silver prices in India in the Royal Statistical Society's journals. This paper is also the source of time series of net import of gold, active circulation of silver rupees and index number of food prices. The time series regarding net silver imports, silver received into the mints and silver coinage minted have been taken from Government of India's volumes of financial statistics. Information regarding Government of India's revenue and expenditures have been taken from the financial Statistics volumes of the Government of India. Information on land revenue has been taken from K.T.Shah's book on "Sixty Years of Indian Finance". Information on Central Government balances in India has been taken from Atkinson's paper referred to earlier. Information on rupee data and sterling data has been taken from BMS. Information on total debt is taken from Government ofIndia's Financial Statistics. As information on data is from two different sources, total debt does not tally with the aggregate of rupee data and sterling data. Small differences exist. Information on the price of silver has been taken from an American publication. The time series on the exchange rate is taken from the appendix to the Fowler Committee report. The information on the rate of discount in England and the Sauerbeck index number of prices for UK is taken from articles in the Royal Statistical Society's journal. Appendix at the end of the Text gives more details regarding the historical time series worked out along with the sources for the same. F. 1. Atkinson was the statistical advisor to the Government of India during the late Nineties. He was a fellow of the Royal Statistical Society. He provided important information in a number of his papers published in the above journal. He was a pioneer in National Income Studies in India. A note on his contribution is given in the Appendix 2 to this chapter. In view of cardinal importance of a series on NDP and of and series on Money Stock, the next two chapters aim at filling the gaps in regard to these two magnitudes.

22

Money, Income, Prices in 19th Century India

Appendix 1 COMPUTATION OF A NEW SET OF PRICE INDICES By order of the Governor General in Council, the Department of Commercial Intelligence and Statistics, Government of India used to publish "Index Numbers of Indian Prices". This publication contains index numbers series (with 1873-74=lOO) of 1. Exported articles, an unweighted composite of the index numbers of prices of 28 commodities. 2. Imported articles, unweighted composite of index numbers of 11 imported articles. 3. Unweighted Composite General Index number of both exported and imported articles. 4. A weighted index number of the composite of the prices series of 100 articles. 5. An unweighted index number of price series of retail prices of foodgrains (rice, wheat, jowar, bajra, gram, barley and ragi). All these index numbers are available for the period 1861 (1861-62) to 1939 (1939-40). The volume also contains information on the prices of bar silver in Bombay and rates of exchange from 1873-74 to 1939-40. F.J .Atkinson constructed a weighted index number for 100 articles from 1861 (1861-62) to 1908 (1908-09). His index number series appeared in the Journal of the Royal Statistical Society of March 1897, June 1898, March 1903, September 1909. The Government of India's general weighted index number introduced some modification in the number of commodities included and in the relative weights. Details of this are given in the K.L.Datta Committee's Report on the "Enquiry into the rise of prices in India", Vol-I (Calcutta-1914). In this Report the appendix C concerns the "Construction ofindex Numbers and the calculation of weights". As compared to Atkinson's weights there are some changes in the weights given by the Prices Committee. It has included provision for metals and building materials. The Atkinson general weighted index number does not include salt, metals and saltpetre. The prices series for some commodities were not complete for the entire period from 1861-62 to 1899-1900. We have preferred to construct a new general composite index number with weights for 38 commodities based on the individual index number series for the same. The new price index termed VNPINDXW with 1873-74=100 may be compared with the Government of India's general weighted price index. Though the two series are similar there are yet slight differences.

The Weighted Index of Export Articles The Government of India's number of export articles is unweighted. It is necessary to compute a weighted index of export articles. We have taken the weights from H. Venkatasubbiah "Foreign Trade of India - 1900-1940", Bombay - 1946, Tables A and B, pages 28-29. The weighted prices index of export articles is termed VEXTRIIXW, with 1873-74=100.

The Weighted Index of Import Articles Based on the weights from H.Venkatasubbiah's book referred to above and the prices series contained in "Prices in India", we have constructed the weighted index of import articles. This is termed as VIMPPRIXW.

Gaps in Historical Statistics

23

Appendix 2 STATISTICAL CONTRIBUTIONS OF F. J. ATKINSON FJ.Atkinson, who was a Statistical Advisor to the Government of India in 1890's, published four articles in the Journal of the Royal Statistical Society, dealing with prices, wages, rainfall and income in the then Indian subcontinent. The first article titled "Silver Prices in India" appeared in March 1897. It contained pooled information on Rupee Prices of a number of commodities as also index numbers of groups of commodities in the period dealt from 1861 to 1895. Atkinson also discusses causes of fluctuations in prices during this period. He works out a series on the volume of rupees in circulation. He also gives information on index numbers of wages of several categories of labour from 1873 to 1895. The appendix to the article contained valuable information bearing on the contributions of different commodities to the value of production and the relevant weights for the same. The article also works out index number of rainfall in India from 1861 to 1895. An important contribution was the construction of an index of rainfall for the country. The second article on "Rupee Prices in India - 1898 to 1901" appeared in the March 1903 issue of Journal of Royal Statistical Society. It carries information till 1901 regarding prices, rainfall, wages, rupee circulation etc., with some amendments for some of the earlier figures up to 1900-01. A third article titled "Rupee Prices in India - 1870-1908" appeared in September 1909 issue of Journal of Royal Statistical Society. This updates the data of the earlier articles with relevant collections for the figures of earlier years. Table 2 contains index number of prices according to different categories with 1868-78 as base = 100 from 1868 to 1908. Table 9 in the article contains information on the index number of wages in India according to those of agricultural labourers, industrial labourers, general labourers, professionals, domestic services, commerce and also others. This article examines the causes for the then high level of prices in India. The article updates data on Rupee Circulation. Since the reference period of our study is from 1861 to 1903-04, the information contained in Atkinson's paper on prices and wages has proved extremely valuable. By making use of the index number of Indian prices published by the Department of Commercial Intelligence and Statistics of the Government of India, we have worked out with 1871 = 100, a series of index numbers of prices of rice, wheat, jawar, ragi, gram, barley, bajra and other grains, vegetables, sugar, spices, meat, food articles, tea, coffee, cotton, indigo, opium, tobacco, oilseeds, coal, raw wool, raw silk, hides and skins, timber and the group of raw produce and materials, cotton goods, jute goods, oils, silk, manufactured hides and silk, shellac and the group of manufactured commodities from 1861 to 1903. We have compiled a general index number series with weights for food articles = 60% and raw produce etc., = 20% and manufactures = 20%. The index of agricultural commodities is worked out comprising food articles and raw produce. Composite prices index that we have worked out based on the Atkinson data is our general purposes prices series for our period.

24·

Money, Income, Prices in 19th Century India

As regards wages, from Atkinson we have worked out index numbers of wages with 1883-84 = 100 for agriculture, industry, (from 1883-84 only) and services. The period covered reaches up to 1903-04. We have no dependable information for the period prior to 1873-74. We have also worked out a series of average wages, from 1873-74 to 1903-04 for the period earlier of 1873-74. We do not have dependable inforn1ation. However on the basis of the scraps of information contained in Mani Mukharjee's articles dealing with from 1857 to 1956 for some intervening years, we have taken index number of wages to 1861. By applying the ratio of 72:28 for commodities and services, we have worked out a general deflator with 1948-49 as basis. Thus we have a general deflator with 1948-49 basis = 100 for the period from 1861 to 1903-04. Atkinson published a very important article in the June - 1902, issue of the Journal of the Royal Statistical Society dealing with "A Statistical Review of the Income and Wealth of British India". This is the most important source for later estimates of national income in India by other writers. It is also the first systematic effort to apply the modem national income concept to the Indian economy. It also pioneered the dual approach to estimation even now current; some items were estimated by the value added approach and some by the distribution of income method. Atkinson made estimates for 1875-76 and 1895-96. We have referred to his estimates in the Chapter 3, dealing with our estimate of Net Domestic Product series for India. Atkinson's dual approach to estimating national income seems to have influenced Robertson and Bowley in their A Scheme for an Economic Census of India, published in 1934. They commended the above approach in view of the statistical difficulties in obtaining estimates of incomes/earnings of all classes of workers in India. The Government ofIndia's National Income Committee's provisional and final Reports in 1950-54 also adopted the dual approach. The product approach was applied to agriculture, mining and manufacturing, but in regard to small enterprises and professions as well as other services, the incomes/earnings approach was adopted. Even do this day the dual approach continues. This should be a tribute to the pioneering contribution of Atkinson.

Chapter 3

NET DOMESTIC PRODUCT OF THE INDIAN SUB·CONTINENT FOR THE PERIOD 1861·62 TO 1899·1900 Some Concepts From the macro-economic angle income categories like gross and net domestic product, gross and net national product, at current and constant prices, at factor cost and at market prices, at the aggregate level of the national economy, are extremely important. The aggregate of value added in different activities/industries in the domestic economy, before deduction of depreciation, is the gross domestic product at factor cost. If we deduct depreciation from this we get the net domestic product at factor cost. If we add indirect taxes to GOP and deduct subsidies we get GOP at market prices. Ifwe deduct depreciation from this we get NOP at market prices. Ifwe add net income received from abroad to NOP at factor cost, or deduct from NOP at factor cost net payments made to the rest of the world, we get National Income. Adding depreciation to this we get Gross National Income or Gross National Product. In modem National Income analysis, we include both the net value added in commodities and the net value added in services. In the early days economists used to take into account only the value added in the goods sector, sometimes including in the latter, the value added in the transport sector. This approach was based on the assumptions that only (physical) goods were "productive" and services were not. This methodology has been given up in recent times. K.T. Shah, in his "Wealth and Taxable Capacity of India", makes a strong defence of the physical goods approach to national product. (In recent years Piero Sraffa, in his "Production of Commodities by means of Commodities", revived a dichotomy in production between basic goods and non-basic goods. The former enter as inputs directly or indirectly into the production of themselves and of all other commodities. The measure of production is in terms of a standard composite commodity, which includes only basic goods. If we treat agriculture and related commodities as the only basics or wage-goods as the only basics, the non-basic goods as above do not enter into the composite. But the whole of production is measured. Most services may be treated as non-basics). There are still some controversies dogging the measurement of national income and its welfare significance. We estimate the value added in the Government sector by largely taking the salaries and wages in that sector. Is it proper to consider the government's contribution in this form as equivalent to utilities produced for the public? The measure of national income generally takes market values of services performed but many services particularly in the household sector and in the farming sector are not evaluated at all. In a growing economy, the proportion of market-valued services goes on rising. Often, there is substitution in favour of the latter against in-household performed services. The growth of national income may exaggerate real growth of utilities. Further, many sectors counter the pollution and diseconomies caused by other activities. Special diseases and ailments occur in the processes of production.

26

Money, Income, Prices in 19

th

Century India

Counter-activities against these are also included in national income. There is also the question of whether it is proper to include defence activities in national income. Sometimes production of "bad goods" takes place like that of opium. Conventional National Accounting would include such goods. In what follows we skirt these problems. However, during the period of our study, India was under the British rule. British interests and British well being were deemed to be of greater significance in resource allocation in India than the interest and well being of Indian people. One viewpoint was that a portion of India's annual national income was subjected to a process of drain to Britain. As this portion was equivalent to a quarter of the savings of India, sometimes even to half of the latter, in the absence of drain, the growth rate year by year was kept lower than would have been the case otherwise. Assuming a capitaloutput ratio of 1.5: 1, this would have implied a reduction in the annual growth rate by one percentage point and above each year. At the same time, the drain took the form of higher level of taxation of Indian people, than would have been the case in the alternative. What we are measuring would be the results of production in an economy, historically and then currently, being subjected to the drain process. One should therefore be careful in attributing welfare significance to the national income measure of a country subjected to Imperial exploitation. We must remember that not merely would the cake of the size of national income have been larger, but the cake itself would have been more palatable, had the drain process not existed. The estimation of the different categories of domestic product and national income requires vast amount of information even for a given year. If we want to work out time series of these categories, sequential information on different categories and magnitudes has to be available for long periods and on a homogeneous basis. Very few countries have been able to work out long period series of National Product and related categories. The measure of national income is necessary if we have to ascertain the absolute per capita income in any given year. If this can be compared with the per capita income of other countries we get a rough measure of differences in wellbeing, subject to the caveats mentioned earlier. If we are able to obtain a time series of National Income and related categories and also of population we can work out the per capita income series and try to find out whether the country has improved its wellbeing and also ascertain the rate at which such an improvement is taking place. National income measures enable us to relate Government revenues, tax revenues and Government expenditures to them. The discussions of taxable capacity are meaningless without national income measures. National income and related data are important in our study because we want to bring the income and related series to relation with money stock series. There are a number of theories concerning the determination of the price level and of its course. National income data are very necessary here in this connection and in related matters. There are supply-based and demand-based theories of determination of National Income and we have to find out which of the theories is relevant in our context.

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

27

Dadabhai Naoroji's Estimate For the period under our study, 1861-62 to 1899-1900, we do not have continuous time series on income magnitudes and derived by economists contemporaneous with the times. We have point-date estimates and some of them on the goods basis. Dadabhai Naoroji was the earliest in India to make a rough estimate of National Income for 1867-1870 and per capita income and by indirect means. He had excluded most of the services from his estimate. His estimate pertained only to British India. At the time of his estimate, very meager data were available. There was no estimate of agricultural production or of industrial production. Dadabhai Naoroji had to resort to indirect means like the ratio of agricultural produce to land revenue collections in order to obtain an account of the value of agricultural production. He had also problems in netting his estimates. Information regarding non-agricultural sources of income was rather meager. But looking to the absolute paucity of relevant information, his was a pioneering effort. His hunch of a stable relation between land revenue collections and agricultural product around his time was original and brilliant. If only he could have worked out a credible ratio between National Income and agricultural value added, he could have improved upon his estimate. Dadabhai Naoroji's interest in National Income and per capita income arose from his passionate desire to demonstrate the colossal absolute poverty of India. He wanted to show that this absolute poverty was due to the un-British rule of India by the British Government who was the Imperial power over India. Dadabhai Naoroji attributed this to the consequences of the cumulative effects of the long-obtaining yearly drain of wealth from India. The drain consisted of interest and amortisation payments on debt incurred in the past on behalf of India, such debt also getting highly exaggerated, salaries and payments and other expenditures of the office of the Secretary of the State for India in London as also pensions for the British personnel who had served in India and portions of current defence expenditures allegedly getting incurred for India. Since even a portion of rupee debt had been owned by foreigners, servicing payments for the same also augmented the drain. These were all on the public account but, there was also a drain on account of the servicing burdens arising from the flow of foreign private capital. Naoroji identified the drain with the year by year net exports of India after deducting net treasure imports. The problem was not about the net exports being the net invisibles in the balance of payments, which had to be paid by the country as a result of its capital and other liabilities. Naoroji's point was that the very existence of such large liabilities was the accumulated result of the annual drain and such payments in the past. Naoroji first estimated agricultural income by means of the average ratio of agricultural income to land revenue. Land revenue data were available. He added information on select industries and other activities to the agricultural income and providing for margins he made a rough estimate of national and per capita income for the late 60s of the 19th century. Naoroji's estimate of per capita income was 2 pounds or 40 shillings; Naoroji converted this at Rs.l 0 per pound and made India's per capita income Rs.20 in 1867-68 at the then current prices. But the actual exchange rate during his relevant year was Rs.l 0.35 per pound. On that basis the per capita income would have been Rs.20.70 (the practice then by officials was to adopt Rs.I0 as the

28

Money, Income, Prices in 19th Century India

equivalent of one pound in presenting the rupee figures of pounds). To repeat, he had excluded almost the whole of value added from services. Sometime thereafter he made a more detailed estimate for the early 70s (1870-71). The figure of 40 shillings was substantiated. However, the exchange rate then was Rs.l 0.67 per pound, hence in rupee terms, the per capita income was 21.34. Dr. V.K.R.V.Rao, in his "An Essay On India's National Income, 1925-29" published in 1939 by George Allen & Unwin Limited, London, has critically examined Naoroji's estimates. He makes a number of ad hoc adjustments and corrects Naoroji's figure to Rs.23.24 for the period 18671870. If we accept Dr.Rao's procedure, and make adjustments for the current exchange rates, instead of Rs.23.24, the per capita income would become Rs.25.69.

Barbour, Digby and Curzon David Barbour and Evelyn Baring, and Lord Curzon later also made point-dated estimates for later years. (Vide C.N. Vakil, Financial Developments in Modern India, 1860-I 924, pp 517-518). Barbour, after estimating agricultural income from production data, as given by the Famine Commission of 1880-85, estimated nonagricultural income on a rather crude basis. Barbour valued foodgrains production at Rs.50 per ton and non-foodgrains production at Rs.30 per ton. As non-agricultural population was 34 % of total population, he estimated product here at about 50 % of that of agriculture. He placed the latter at Rs.350 crores and non-agriculture at Rs.175 crores. The total income was placed at Rs.535 crores. Dividing this by the population of 19.46 crores, he obtained a per capita income figure of Rs.27 for early 1880s. Lord Curzon later (1902) followed the practice of Barbour and took into account the Famine Commission's estimate of agricultural production for 1898. Curzon placed the per capita income at about Rs.30. William Digby in his famous book titled "Prosperous India" made a more detailed estimate for 1898-99. Digby also excluded the bulk of services. But Digby was meticulous about the categories of nonagricultural product incomes. Digby placed India's per capita income in 1898-99 (partly affected by famine) at Rs.18; for 1899-1900, a severe famine year, he placed per capita income at Rs.12.60. Dr.Rao in his above mentioned book, has considered Digby's figures as gross underestimates. Digby was also inspired by the same passion as Naoroji, to show that the British had grossly neglected their responsibility to improve the economic state of India.

Atkinson's Modern Approach However, Fred 1. Atkinson, the distinguished Statistician-Adviser to the Government, attempted a more systematic and comprehensive estimate of production and income at the aggregate level. He was a fellow of the Royal Statistical Society and his papers were published in the Journal of the Royal Statistical Society. The Article titled "Silver Prices in India" was published in the March 1897 issue of the Journal. In this he provided, for the first time, an estimate of the production and manufactures of India for the year 1893-94. He provided estimates of quantities as well as values of production of different items. He wanted to utilise the data on values of production after aggregating them to derive the weights for working out an index number of prices. The commodities, he included, consisted of both agricultural and

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

29

non-agricultural items as well as a number of industrial items. For example, his list included rice, wheat, ragi, bajra, maize, barley, other grains and pulses, sugar, spices, miscellaneous items, orchards and gardens, meat, ghee, tea, coffee, cotton, jute, indigo, oil seeds, fodder, cotton goods, jute goods, flour, edible oils, products of other factories, coal, raw silk, raw wool, raw and tanned hides and skins and manure. These commodities were grouped under 3 sections. 1. Food, 2. Non-food crops, and commercial crops and 3. Industries. Atkinson's estimate of gross value of production of agricultural commodities was Rs.817.36 crores for the areas of British India. We have to deduct the usual 1/6th for seed, wastage etc. The net value added in agriculture comes to about Rs.682 crores for the Indian sub-continent. This is the figure for 1893-94 and has been taken by us as the benchmark base year, estimate of net value added for agricultural production in India. After working out indices with 1893-94 as 100, we then interpolate this the above figure of Rs.682 crores and then work out the net value of agricultural output at 1893-94 prices and then convert these to current prices and to 1948-49 prices in our detailed estimate of net output in agriculture. (Please see Appendix 1 to this chapter for details of Atkinson's 1893-94 estimate and our adjustment of the same for deriving NDP for the sub continent for 1893-94). It may be noted that the ratio of land revenue collections in 1893-94 to the net value added of agricultural output in that year works out to 26.7 per cent. (For the Vakil-Muranjan estimate it works out to 23.83 per cent, and for Heston's estimate it works out to 21.06 per cent). (If we assume that the share of gross surplus in value added would have been on an average 50% which is very high, the burden of land revenue would have been about 50% of surplus. Probably, the share of surplus in value added would have been about 30% or even less since the share of wages would surely have been at least 70% of value added. This would mean that the land revenue was eating up more than 80% of the surplus. There is room for the view that the burden of land revenue was often eating into necessary costs of production.). However, Atkinson did not work out National Income estimate for 1893-94. But, in an article published in the same Journal in June 1902, he made a detailed statistical review of "Income and Wealth of British India". Here he made an estimate of income of the country by mixing two approaches. He utilised the product approach for agriculture and personal incomes-derived approach for non-agricultural activities. He took two reference years 1875-76 and 1895-96, separated by a 20 years gap. (The second reference here seems to have been 1894-95, though Atkinson refers to the two reference years as 1875 and 1895. Rao takes the second reference here as 1895-96.) This provided Atkinson a span of two decades to examine the effects of administration on the development of India. He utilised the data of the Censuses of 1881 and 1891 in order to make estimates of workers in non-agricultural sector. He was careful to add incomes from profits and interest to the aggregate of the products and the aggregate of wages/salaries. He deducted agricultural taxes etc., from agricultural products in order to avoid double counting, since he had taken incomes in Governmental services separately. It must be stated that his estimate was probably the closest corresponding to modem income approach. He had taken into account the

30

th

Money, Income, Prices in 19 Century India

value added both in goods as well as in services. But in his 1902 article he did not give details of crop-wise and item-wise data specially regarding agriculture for the two reference years, though he had given these data for 1893-94. It may be mentioned that Atkinson also should be given credit for working out an index number series of rainfall for the whole of the country (vide his article in March 1897 of Journal of Royal Statistical Society). Atkinson also made an estimate in his 1902 article of the growth of categories of capital/wealth in India by taking into account point-figures for 1875-76 and 1894-95. (Atkinson must be complimented for taking issue with the estimate of Harrison regarding money supply and its growth. Atkinson thought that Harrison had produced virtually stationary figures of silver rupees in circulation. As these figures could not be reconciled with the considerable growth in income and wealth that was taking place, he made his own estimate of silver rupees and currency series, with some assumption concerning hoarding and conversion of silver rupees into jewelry etc.). Atkinson took into account the rise in prices between 1875-76 and 1895-96 and obtained a deflated estimate of per capita income in the two years. He came to the conclusion that per capita real income had increased over this period. We have given in Appendix 2 to this chapter, an account of Atkinson's estimates for the two years adjusted for the whole of the Indian sub-continent. We have made slight revisions of his estimates. We have thus three check estimates of NDP from Atkinson, for 1875-76, 1893-94 and 1895-96. Since we have worked out our own series NDP and related estimates for the entire period, these check estimates are useful for comparative purposes. Dr. V.K.R.V. Rao in his book "An Essay on the National Income of India" has made some ad hoc criticisms of Atkinson's estimates and also has made some corrections to them. Whereas Atkinson placed per capita income in 1875-76 at Rs.27.3 and that in 1894-95 at Rs.39.5, Dr.Rao has corrected the figure for the latter year to Rs.31.5. Dr.Rao considers that Atkinson should not have included mendicants in his category of services and had overestimated the price increase between 1875-76 and 1895-96. There was no reason why Atkinson should have treated mendicants as equal to unproductive beggars. Mendicancy around that time probably was not deemed as unproductive. Mendicants received regularly alms and charities because those who gave alms to them derived some intangible benefits or utilities. Actually the year 1895 in Atkinson probably refers to 1894-95 and not 1895-96 as Rao had taken. The 20 years interval ends with 1894-95. The price increase during the interval between 1874-75 and 1894-95 comes close to Atkinson's estimate. What is most puzzling is that Atkinson did not attempt a time-series of National Income, say even for the period 1875-76 to 1895-96. He was in possession of more statistical information than anyone else at that time. He could have easily constructed the time-series. Dr.Rao, who wrote later in early 30's, too could have attempted a time-series for the second half of the 19th century. At the same time, Rao had more access to information of that period than others did. Mere ad hoc adjustments on an arbitrary basis were probably not enough. But it must be said to the credit of Atkinson that the dichotomous approach, which he adopted, has continued in India till today.

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

31

Mukherjee and Heston Mani Mukherjee in his book on National Income in India deals in Chapter 2 with growth of national income in India during the 19th century. He makes some pointdated estimates for the period. There is no basis given for the same. For 1860 he has an estimate of national income of Rs.3,250 crores at 1948-49 prices (about Rs.227 crores at the then current prices). In the Cambridge Economic History oflndia Volume II c.1757 -c.1970, edited by Dr. Dharma Kumar, there is a long paper by Alan Heston of the Pennsylvania University on National Income. In his paper making use partly of Mukherjee's estimates and of some more data for the period, Heston provides an estimate of Net Domestic Product at 1946-47 prices for the Indian sub-continent and by sectors for the period from 1884-85 to 1899-1900. He has point-dated estimates for 1868-69, 1872-73 and 1882-83. There is no estimate for 1883-84. The sectors included are agriculture, animal husbandry, forestry, fishing, mining, manufacture, small scale industry and services, house rent, and government. There is a provision for foreign earnings, which are negative throughout (consisting of home charges). The important point about his series is that there is very slight change in the share of net product of agriculture. It improves from 51.1 % in 1868-69 to about 52.6% in 1898-99. For 18991900 it is 48.19%. We have separately given in Appendix 3, a note on Heston's estimate. There are a number of difficulties in accepting his estimate of income series from our angle. The period from 1861-62 to 1899-1900 witnessed considerable expansion in railways, trade, irrigation, industrial activity, flow of foreign capital etc. Non-agricultural activities should have expanded their value added at a higher rate than in agriculture. Consequently the relative share of agriculture in NDP should have come down. This would not be reflected in the pattern in the occupational distribution which sees little change in the proportions, except in regard to trade, commerce and transport. Further at current prices the estimates of income by Heston would be too low in relation to the money in circulation indicating a rather low velocity of circulation than could probably be normally expected. Anyway, the Heston series is not available on a continuous basis from 1861-62 to 1884-85, for nearly half of the period of our study. Appendix 3 compares our estimates with those of Heston. We are constrained to make fresh estimates of Domestic Product and related series for the whole period at current and 1948-49 factor costs and market prices. We have also estimated per capita income at current and at 1948-49 prices. We have two sets of esti!llates based on two methodologies for deriving the contribution from Agriculture. Further, we have also made an estimate on the income methodology for non-agricultural and allied sectors for the period 1861-62 to 1899-1900; we have used average incomes of different categories of workers from the data given in the Atkinson article of 1902. The three estimates are close to each other. The third estimate is not used by us in the regression studies. We primarily use the first estimate.

The Methodology of Estimation of NDP For the period from 1899-1900 to 1949-50, we had worked out in early 50s detailed sector wise estimates of net value added in different activities of the Indian

Money, Income, Prices in 19th Century India

32

Economy at 1948-49 prices. The methodology had taken the National Income Committee Report of 1948-49 as the basis. We had constructed crop-wise and industry-wise production and value added data; for a number of other activities we had worked out index number series of physical indicators. We were able to work out quinquennial series of sector-wise net products and aggregate net products first for undivided India and'then for the Indian Union. (We later converted the estimate into a yearly series). We had with us the quinquennial estimates of sectoral net products and aggregate net product for 1899-1900 to 1903-04. We have chosen the average of Net Domestic Product/Net Value Added in different sectors for the period 1899-1900 to 1903-04 as the base for computing the year by year Net Domestic Product/Net Value Added from the different sectors other than the Agricultural sector. The index numbers of physical or related indicators have been worked out for the period 1861-62 to 1899-1900 as the base. Correspondingly, we are able to equate the average value added in terms of rupees crores with the average index number for the period. We then work out the net value added/net domestic product of the sectors for the whole period at 1948-49 prices. We give in Table 3.1 the average value added in rupees crores at 1948-49 prices for the different sectors for the period 1899-1900. Table 3.1: THE QUINQUENNIAL AVERAGE NET DOMESTIC PRODUCT IN INDIA FOR THE PERIOD 1899·1900 1.

Agriculture

3054

(Rs.Crs) 43.99%

a.

Crops

2664

5.40%

b.

Animal Husbandry

c. d.

327

0.66%

Forestry

40

0.37%

Fisheries

23

2.

Mining & Manufacturing

3.

Small Industries & Services

4.

Commerce. Transport & Communication: a.

5.

Railways

b.

Banking and Insurance

c.

Trade and Other Transport

104

1.71%

1537

25.38%

76

1.25%

6

0.09%

841

13.88%

Other Services: a.

Government Administration and Other Government

203

3.35%

b.

House Property

234

3.86%

We now outline briefly the procedures followed by us for working out sectoral estimates.

Agriculture There is no series of agricultural outputs from 1861-62 onwards. Information on estimated agricultural area and crop production is available form 1892. The Datta Committee also has figures of agricultural and foodgrains productions only from 1891-92. George Blyn has an estimate on value of crop production from 1891-92. (Sumit Guha, in his edited work Growth, Stagnation or Decline? Agricultural

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

33

Production in British India, Oxford, 1992, has reproduced select tables from George Blyn's "Agricultural Trends in India, 1891-1947"). Method-I is outlined below. Data on land revenues collected on an early basis are available for the whole period. We have blown up these data for the entire Indian subcontinent. The index of land revenue collections can be treated as a rough proxy for area under cultivation. This is subject to the assumption that the land revenue demand per acre had remained unchanged throughout the period. Nearly 30% of land had been under Zamindari permanent-settled tracts. In regard to the rest of the land area settlements could not be opened for 20 to 30 years. Except in the Punjab and some other tracts there were no revisions during this period. We do not find evidence to support the hypothesis of R.C.Dutt before the Fowler Committee that land revenue collections were sensitive to the course of the price level. There is no highly significant correlation between the land revenue collections and agricultural prices or even the general price index. We may proceed on the assumption that by and large the growth of land revenue would roughly correspond to the growth of the area under cultivation. The figures of land revenue per acre given in Atkinson's article do not show any significant change between 1875-76 and 1894-95. It would, however, not be proper to give 100% weight to growth in land revenue corrections as a proxy for area. In each year, the rainfall would determine the area under actual sowing. We have to give some weight for rainfall variations. Atkinson has constructed an index of rainfall covering the period, which is helpful. No information on productivity growth per acre is available. Some improvement in productivity howsoever small, would be taking place. This is so because the area under irrigation was going up. If productivity is constant, production would vary with the index of area under cultivation adjusted for rainfall variations. We regressed land revenue and rainfall and productivity on Blyn's data on crop production. The unexplained portion in the regression exercise was attributed to the productivity change. This helped us to derive the weights for area, rainfall and productivity. The weights which we have adopted are 50% for land revenue, 30% for rainfall, and 20% for productivity per acre. On this basis we have three time series: 1. For area under cultivation as corresponding to land revenue collections. 2. The index of rainfall, and 3. The index of productivity per acre. With the weights as given earlier, we are able to obtain a composite index of agricultural production. By utilising Dr. Thingalaya's indices of agricultural prices for the period 1861-62 to 1952-53, we are able to obtain the value added at current prices in agriculture and the same in 1948-49 prices. We may mention that had we taken the index of land revenue collections as 100% proxy for the index of agricultural production, with some adjustment for rainfall index, we would have obtained a higher growth rate of agricultural production. The Table 3.2 gives the steps involved in the derivation of value added in agriculture at current and at constant prices. 1893-94 is the benchmark year here also. The value-added in that year in agriculture is Rs.682 crores for the Indian subcontinent at that year's prices.

th

34

Money, Income, Prices in 19 Century India Table 3.2: Derivation of NDP from Agriculture at Current and at Constant Prices - Method I

Index of Area under cultivation Year

1893=100 WT=50%

1 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899

2 76.47 76.07 78.03 77.28 78.43 73.33 78.02 77.64 82.35 80.78 80.39 83.52 52.35 83.13 84.31 77.64 77.64 87.45 85.49 82.74 85.88 85.49 87.45 85.49 88.23 90.18 90.58 90.19 93.72 94.11 93.72 97.64 100.00 99.60 102.74 90.19 100.39 107.45 101.17

Index of Rainfall

Index of crop productivity

1893=100 WT=30%

1893=100 WT=20%

3 90.83 91.66 87.50 72.50 81.66 76.66 86.66 67.50 80.83 83.33 81.66 85.00 74.16 87.50 88.33 7083 72.50 91.66 84.16 75.00 81.66 83.33 82.50 83.33 85.00 88.33 86.66 81.66 88.33 86.66 75.83 93.33 100.00 94.16 76.66 71.66 79.16 8000 85.33

4 98.01 98.07 98.13 98.19 98.26 98.32 98.38 98.45 98.51 98.56 98.63 98.69 98.75 98.82 98.88 98.94 99.00 99.06 99.12 99.19 99.25 99.31 99.38 99.44 99.50 99.56 99.62 99.68 99.74 99.81 99.87 99.94 100.00 100.05 100.12 100.18 100.25 100.31 100.38

Composite Agflcultural Index of mdexof value added agricultural at 1893 prices agricultural pflces 1893= output (Rs.Crs) 100 1893=100 5 85.00 84.50 85.12 76.90 83.25 79.16 84.57 78.99 85.00 84.92 84.22 86.93 83.05 87.46 88.27 79.78 80.30 90.91 87.73 83.65 87.15 87.46 88.27 87.48 89.51 91.31 90.03 89.33 93.14 92.86 89.47 96.68 100.00 89.00 94.20 86.43 93.86 97.56 88.00

6 579.7 5762 580.5 524.4 567.7 539.8 576.2 538.7 579.7 579.1 574.3 592.8 566.4 596.4 6020 544.0 547.6 619.9 598.3 570.4 594.3 596.0 602.0 596.0 610.4 6226 620.8 609.2 6352 633.3 610.1 659.3 682.0 668.3 642.4 589.2 640.1 665.3 659.5

7 57.83 56.73 62.59 83.45 80.89 150.04 86.08 69.17 83.45 7942 66.98 69.17 70.64 83.81 76.49 70.64 92.96 103.21 103.94 8418 69.91 66.98 66.61 77.23 75.76 74.30 71.37 75.76 88.21 89.30 83.81 97.00 10000 96.26 87.47 92.96 123.71 95.89 84.12

Agflcultural Agricultural net value net value added at added current 1948·49 prices prices (Rs.Crs) 8 9 335.24 2359.57 326.87 2342.72 363.33 2360.04 437.61 2132.00 459.21 2308.09 567.00 2194.60 478.70 2344.85 372.61 2190.07 483.75 2356.57 489.92 2354.44 384.66 2335.00 410.03 2410.12 400.10 2302.80 2424.77 499.84 490.46 2447.42 384.28 2211.92 509.04 2226.60 639.79 2520.41 612.51 2432.23 480.16 2319.28 415.47 2416.25 399.20 2424.77 400.99 2447.42 460.75 2425.31 462.43 2481.78 462.59 2531.90 443.06 2496.17 461.52 2476.72 560.3 2582.48 565.53 2574.49 511.32 2480.72 639.52 2680.52 682.00 2772.42 643.30 2717.01 561.90 2611.79 547.72 2396.27 2602.20 791.86 637.95 270503 504.89 2439.96

NOTE: Column 1 refers to the years 1861-62 to 1899-1900 Column 2 refers to the Index of the Area under cultivation with 1893-94=100. Behind that is the index of land revenue collections. Column 3 IS the index of Rainfall again 1893-94=100. Column 4 is the index of productivity of area with 1893-94=100. The weights for area, rainfall and productivity are 50%, 30% and 20%. Column 5 is the composite index of agricultural output denved by applying the above weights to columns 2,3 and 4. Column 6 is the series of agricultural value added at 1893-94 agricultural prices. As noted earlier, the value added of Rs.682 crores for 1893-94 prices is derived from Atkinson's 1897 article in the Royal Statistical Society's Journal. Atkinson's paper takes into account all agricultural crops. We have made deductions for stocking, inputs etc. Column 7 gives the weighted agricultural prices index with 1893-94=100 and is taken from Dr. Thmgalaya's dissertation. Column 8 is agricultural value added at current pnces. Column 9 is the conversion of column 8 into agricultural value added at constant (1948-49) prices by making use of the general index of weighted agricultural pnces With 1948-49=100. This is also taken from Dr. Thingalaya's dissertation.

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

35

We have also separately worked out an estimate of foodgrains production and agricultural production for the whole period - 1861-62 to 1899-1900 by regression exercises and the back-casting technique of projections. (Method II). We first made area under foodgrains and that under all crops as a function of land revenue and rainfall. By backcasting, we were able to obtain figures of area under foodgrains and under all crops. Next we made foodgrains production and agricultural production a function of area under foodgrains and under all crops. We backcasted production in foodgrains and agriculture to 1861-62. We checked the figures of productions for the Famine Commission's estimate for 1881-82. The results more or less tallied. We may note that agricultural prices/foodgrains prices have very low correlation with land revenue. In regression exercises they are not significant. The base regression exercise utilises the available data on area, land revenue collections and outputs for the period 1891-92 to 1899-1900. The back-casting technique is rather new in the form in which we have applied; a note on this is given in Appendix-4. The figures of agricultural value-added derived from the above method has been utilised in the aggregation of net domestic product of all sectors in Method-II. This is an alternative to the conventional method of deriving agricultural output described above.

Animal Husbandry We have a point-date estimate for agricultural livestock from the livestock censuses of the period. We have information on agricultural livestock for some years (1868-69, 1873-74, 1876-77, 1896-97). We have utilised the trends contained between the point-data in order to work out a series of agricultural livestock for the entire period. This includes products like meat, milk, raw hides and skins etc. By taking the average for 1868-69, 1873-74, 1876-77, 1896-97 as the base we have been able to work out the net value added in this sector.

Forests We had to utilise the data on revenue from forests even in C.N. Vakil's "Financing Developments of Modern India" and linked this with the average for our detailed estimate of value added in forestry for the period 1899-1900 to 1903-04. Thus we obtained a series of value added in forestry for the whole period.

Fishing We had to utilise the base data of the average for 1899-1900 to 1903-04 and proceed backwards along the index number of the agricultural value added.

Mining and Manufacturing The methodology here is to construct an index number of mining and manufacturing by making use of individual index numbers of productions in different industries. We have pooled together available data on production in different industries from the earliest year or from 1861-62. The information is collected from several sources: Government of India Statistical Abstracts, Vakil and Muranjan' s "Currency and Prices in India" and from Government of India's Statistical Publications dealing with industry. We were able to build time series of index numbers for 5 industries - cotton textiles, jute, coal, silk and engineering. We have given weights to them as follows: 54%, 31 %, 2.5%, 2.2% and 10.3% respectively. For some industries, we had to adopt indirect measures to take the data from 1861-62.

36

Money, Income, Prices in

19th Century India

The base is 1900-1901=100. We give in Table 3.3 the index number of individual industries as well as the composite index of mining and manufacturing. Table 3.3: Index Number of Mining and Manufacturing (1861-62 to 1899-1900) YEAR Cotton Textiles Jute Textiles (54) Weights -> (31)

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

11.61 11.67 11.72 10.7 10.11 12.5 15.74 17.11 18.96 23.87 16.93 18.96 18.24 22.19 19.07 19.85 21.65 19.78 22.72 28.00 29.37 33.72 39.36 44.00 47:50 53.65 58.11 65.61 74.48 87.06 86.11 86.48 90.30 99.07 104.09 96.07 109.41 123.70 107.33

1.84 1.90 1.97 1.61 3.77 2.06 1.65 1.87 1.84 1.48 1.77 1.90 2.32 5.58 9.55 7.68 13.16 16.74 20.58 19.74 26.16 27.90 29.16 32.19 31.74 33.90 38.19 40.32 42.48 42.90 46.32 18.06 50.19 61.35 63.94 75.52 79.39 82.39 90.97

Coal (2.5)

Silk (2.2)

32.00 36.00 4.00 4.40 4.80 7.20 6.80 4.40 7.20 8.80 8.40 6.80 10.80 12.40 11.20 19.60 28.00 20.40 18.40 20.40 20.00 22.80 26.40 28.00 26.00 27.60 31.20 34.00 38.80 43.20 46.80 50.80 51.20 56.40 70.80 77.20 81.20 92.00 102.00

75.45 65.91 60.00 68.64 70.45 76.36 91.82 95.00 109.55 85.00 90.91 107.73 115.91 115.45 96.09 990.90 85.45 94.55 118.64 83.19 112.27 104.09 86.36 81.82 81.82 122.27 96.36 111.36 113.18 127.27 108.18 138.64 117.27 143.18 107.73 96.36 106.36 79.55 119.55

Engineering Composite Index (10.3) (rounded)

46.99 60.68 78.35 64.17 72.72 25.05 26.60 26.60 15.92 16.50 11.26 13.01 22.72 30.97 52.32 36.89 35.73 32.14 40.39 38.35 49.32 55.73 57.18 55.15 53.40 69.90 66.99 59.90 67.28 65.53 61.94 69.91 61.07 84.08 80.00 84.95 73.20 65.24 76.99

4 4 5 4 4 12 14 15 15 17 13 15 16 20 20 20 22 22 26 28 32 35 29 42 43 50 53 57 64 71 71 73 74 86 88 88 96 103 99

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

37

SmaJl/ndustries and Services The two sectors are put together. We have largely followed the Heston series for obtaining an index number with 1899-1900 = 100.

Trade This sector would consist of internal trade and foreign trade. We do not have information and certainly not on a continuous basis on aspects related to internal trade. But we have full information on foreign trade. During the period under our study, both internal and foreign trades were closely related. As noted earlier foreign trade expanded because of the opening of the Suez Canal, the growth of railways and transport in the country and the increase in the marketed surplus of the commodities. We proceeded with the assumption that internal trade would bear a constant ratio to foreign trade. We have information on the unweighted export prices and unweighted import prices. We worked out an average of the two and derived the series of foreign trade prices. We have information on total trade at current prices and converted this series to constant prices with the earlier mentioned export-import price index. After working out an index number with 1899-1900=100, we related the average of the income from trade for this quinnquenial period to the average index number of the real volume of trade and derived a time series of the latter for the whole period. Table 3.4 gives the relevant information. Table 3.4: NDP from Trade

Year

Imports of merchan dise (Rs.Crs)

Exports of mercha nadise (Rs. Crs)

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883

22.32 22.63 27.14 28.15 19.60 29.04 35.70 35.89 32.93 34.47 32.09 31.87 33.82 36.22 39.89 37.44 44.49 37.80 44.17 53.12 42.11 52.00 55.28

36.14 47.86 65.63 68.03 65.49 41.86 50.87 5306 52.47 55.34 63.21 55.25 54.91 56.36 58.09 61.01 65.22 60.94 67.21 74.58 81.97 83.49 88.18

Total Merchan d,se Trade (Rs.Crs)

Average of Export and Import Price IIldice; (73-74 = 100)

Average of Export and Import Price Indices (99-04 =100)

Trade at Constant Prlce.1 ( 1899-00 to /90304 = 100) (Rs.Crs)

58.49 70.49 92.77 96.17 95.09 70.90 86.58 88.95 85.40 89.81 9530 87.12 88.73 92.58 96.98 98.45 109.69 98.74 111.38 127.70 124.08 135.49 143.46

91.50 91.50 103.00 117.50 11250 118.00 113.00 100.50 102.50 100.00 91.50 96.00 100.00 100.50 92.50 90.50 99.00 99.00 97.50 99.00 92.50 90.00 86.00

90.68 90.68 102.08 116.45 111.49 116.94 111.99 99.60 101.58 99.10 90.68 95.14 99.10 99.60 81.67 89.69 98.11 98.11 96.63 98.11 91.67 98.19 85.23

64.65 77.73 90.86 82.58 85.29 60.62 77.3 89.34 86.97 89.47 103.65 90.07 87.36 91.33 103.79 105.16 106.52 99.32 110.63 127.23 140.50 152.93 165.22

Index of Trade at Constalll Prices with (1899-00 to 190304 = 100) 30.67 36.88 43.11 39.18 40.47 28.76 36.68 42.39 41.27 42.45 49.18 42.74 41.45 43.33 49.25 49.90 50.54 47.13 52.49 60.37 66.67 72.57 78.40

NDP from Trade at 1948-49 Prices (Rs.Crs)

257.93 310.16 362.55 329.50 340.35 241.84 308.47 356.49 347.08 357.00 413.60 359.44 348.59 364.40 414.19 419.65 425.04 396.39 441.44 507.71 560.69 610.31 659.34

th

Money, Income, Prices in 19 Century India

38

Table 3.4: NDP from Trade (Continued)

Year

1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 18991900

)

Exports of mercha nadise (R.I. Crs)

Total Merchan dl.le Trade (Rs.Crs)

55.70 55.66 61.78 65.00 69.44 69.20 71.98 69.43 66.28 77.02 73.53 72.93 76.10 73.66 72.11

83.26 83.88 88.47 90.54 97.05 103.46 100.23 108.17 106.60 106.50 108.91 114.33 103.98 97.63 112.80

138.96 139.54 150.25 155.55 166.49 172.66 172.20 177.61 172.88 183.52 182.44 187.26 180.09 171.29 184.91

87.00 83.00 8650 88.50 95.00 97.50 97.50 93.50 96.50 100.50 97.00 99.00 105.50 150.50 91.00

86.22 82.25 85.72 87.71 94.15 96.63 96.63 92.66 95.63 99.60 96.13 98.11 104.55 104.06 90.18

158.13 164.89 171.58 174.09 173.70 175387 175.05 188.45 176.85 184.19 189.78 190.79 172.17 164.51 204.95

Index of Trade at Constant Prices with (/899-00 to 190304 = 100) 75.03 78.24 81.42 82.61 82.42 83.45 83.06 89.42 83.92 87.40 90.05 90.53 81.70 78.06 97.25

75.30

109.08

184.38

93.50

92.66

199.00

94.43

Imports of mercha ndise (Rs.Crs

Average of Export and Import Price indices (73-74

=

100)

Average of Export and Import Price Indices (99-04 =100)

Trade at Constant Prices (/899-00 to 190304 = 100) (Rs.Crs)

NDP from Trade at 1948-49 Prices (Rs Crs)

631.00 657.99 684.74 694.75 693.15 701.81 698.53 752.02 705.76 735.03 757.32 761.35 687.09 656.48 817.87 794.15

Railways Information regarding freight in terms of millions of tons carried by the railways is available though not for the earlier years; for the latter the information regarding the number of miles of track opened each year is substituted. By linking the two we were able to work out an index number of physical output from the railways with the quinquennium 1899-1900 to 1903-04 = 100. Since we have the net value added from railways on the average for this quinquennium we worked backwards to estimate the net value added in railways at 1948-49 prices for the entire period.

House Property We have some rough information from the census for the period. Utilising this as a basis and deriving the implicit trends we obtained an index number series for the whole period. This is linked to the average value added in the form of rents during 1899-1900 to 1903-04 at 1948-49 prices. We thus derived an index number series of rents at 1948-49 prices. Banking The real deposit series for the whole period has been constructed and this has been linked to our estimate of income from banks during 1899-1900 to 1903-04 at 1948-49 prices.

Residual Government We have estimation of Government expenditure for the period. We exclude from this home charges. We then converted the resultant figure by using the general deflator at 1948-49 prices. We have linked this to our estimate of value added in Government during 1899-1900 to 1903-04 at 1948-49 prices.

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

39

Net Product Totals According To Sectors We now bring together the net value added in different sectors and also the aggregates. We have two measures of value added in agriculture. Consequently, we have two totals of aggregate NOP. Table 3.5 gives the relevant figures. We also give indices of sectoral value added figures and of the aggregate NOP. These figures pertain to the Indian Union area.

Year

1 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

Table 3.5: Sector-wise Net Domestic Product Estimates (Indian Union) at 1948-49 Prices New value added in Agriculture Index of Agriculture In 48-49 Index of First Method Agriculture agricultural prices Agriculture (Rs. Crs) (1873 = 100) Second Method (1873 = 100) (Rs. Crs) 2 4 3 5 1934.85 102.48 1932.13 105.19 1921.03 101.75 1934.76 105.33 1935.23 102.50 1920.70 104.56 1748.24 92.60 1715.28 93.38 1892.63 100.24 1854.60 100.97 1799.57 95.31 1690.69 92.04 1922.78 101.84 1910.06 103.98 1795.86 9512 165962 90.35 1932.39 102.35 1921.38 104.60 1930.64 102.26 1922.09 104.64 1914.70 101.41 1893.25 103.07 1976.30 104.67 1997.28 108.73 1888.05 1836.87 100.00 100.00 105.31 2021.26 1988.31 110.04 2006.88 106.29 2057.58 112.02 181377 96.07 1701.81 92.65 182557 96.69 1722.97 93.80 206674 109.46 2159.15 117.55 199443 105.63 2025.48 110.27 185520 101.00 1901.81 100.73 1981.33 104.94 2001.49 108.96 1988.27 105.31 2014.96 109.70 2006.88 111.23 106.29 2043.09 1988.75 105.33 2014.96 109.70 2035.06 107.79 2090.15 113.79 2075.91 118.19 109.95 2170.98 2046.86 2157.52 117.46 108.41 2030.91 2086.48 107.57 113.59 2117.63 112 16 2240.59 121.98 2111.08 111.81 2227.12 121.25 2034.19 10774 1890.50 102.92 219803 116.42 2227.96 121.29 120.41 2278.19 124.03 2273.38 2227.95 118.00 2430.64 132.33 2141 67 113.43 2275.92 123.90 1964.94 104.07 1839.51 100.14 2133.80 113.02 2626.00 142.96 2218.12 117.48 2623.98 142.85 2000.77 2112.87 105.97 115.03

th

40

Money, Income, Prices in 19 Century India Table 3.5: Sector-wise Net Domestic Product Estimates (Indian Union) at 1948-49 Prices~Continued) Year

Animal Husbandry (Rs. Crs)

1

6

1861·62 1862 1863 1864 1865-66

188.90 191.26 193.61 196.03 198.48 200.94

1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881

203.45 193.44 208.52 211.07 213.66 216.27 206.60 221.47 223.92 202.35 228.86 231.35

Forest (Rs. Crs)

Index of Index of Fisheries Forestry Fisheries (Rs. Crs) (1873 =100) (1873 =100)

8

9

10

11

91.43 92.58 93.71 94.88 96.07

6.72 6.52 7.76 8.64 8.84

42.00 40.75 48.50 54.00

16.68 16.77 16.95

90.65 91.14 92.12 93.10

97.26 98.48 93.63 100.93 102.16 103.42

6.72 7.56 10.08 10.72 10.92 13.48

104.68

14.76

100.00 107.20 108.38 97.94 110.77 111.98 113.21 114.46

16.00 13.88 18.52 15.76 14.52 12.40

55.25 42.00 47.25 63.00 67.00 68.25 84.25 92.25 100.00 86.75 115.75 98.50 90.75 77.50

115.73 117.12 119.43

14.72 18.48 22.72 24.60 27.12

92.00 115.50 142.00

1886 1887 1888 1889 1890-91

251.62 256.40 261.27 266.24 271.27 276.41 281.67

121.79 124.10 126.46 128.87 131.30 133.79 136.34

24.20 26.72 27.56 28.20 32.20 33.88 33.04

151.25 167.00 172.25

1891 1892 1893 1894 1895-96 1896

287.00 292.46 297.99 303.68 307.38 281.99

138.92 141.56 144.24 146.99 148.78 136.49

33.68 32.20 36.00 33.26 36.60 35.76

1897 1898 1899-1900

313.85 323.73 292.00

151.91 156.69 141.34

31.76 39.36 38.52

1882 1883 1884 1885-86

233.90 236.48 239.10 241.98 246.75

Index of Animal Husbandry (1873 = 100) 7

153.75 169.50

176.25 201.25 211.75 206.50 210.50 201.25 225.00 207.88 228.75 223.50 198.50 246.00 240.75

17.13 17.22 17.40 17.49 17.67 17.85 18.03 18.12 18.30 18.40 18.48 18.66 18.75 18.85 18.94 19.03 19.11 19.30 19.48

93.59 94.57 95.05 96.03 97.01 97.99 98.48 99.46 100.00 100.43 101.41 101.90 102.45 102.93 103.42

19.66 19.75 19.84 20.02 20.20 20.29 20.47 20.56

103.86 104.89 105.87 106.85 107.34 107.83 108.80 109.78 110.27 111.25 111.74

20.74 20.92 21.01 21.19 21.28 21.46

112.72 113.70 114.18 115.16 115.65 116.63

21.64 21.73 21.91

117.61 118.10 119.08

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

41

Table 3.5: Sector-wise Net Domestic Product Estimates (Indian Union) at 1948-49 Prices(Continued) Year I

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

Index of Small Index of Small Mining and Mining and Industries and Industries and Manufacturmg Manufacturing Services Services (Rs. Crs) (Rs. Crs) (1873 = 100) (1873 = 100) 12 13 14 15

3.50 3.73 4.12 3.48 3.81 10.33 12.17 12.89 13.13 14.97 11.40 12.85 13.73 17.25 17.85 17.09 19.25 19.02 22.60 24.05 27.97 30.98 33.80 36.61 37.94 43.73 46.32 50.14 55.72 61.97 61.83 63.85 65.06 74.90 77.23 79.96 83.51 90.07 86.68

25.49 27.17 30.01 25.35 27.75 75.24 88.64 93.88 95.63 109.03 83.03 93.59 100.00 125.64 130.01 124.47 140.20 138.53 164.60 175.16 203.71 225.64 246.18 266.64 276.33 318.50 337.36 365.19 405.83 451.35 450.33 465.04 473.85 545.52 562.49 582.37 608.23 656.01 631.32

1055.45 1061.75 1068.21 1074.67 1081.12 1087.73 1094.34 1067.41 1107.56 1114.17 1120.93 1127.85 1102.69

1139.22 1144.91 1089.83 1156.28 1162.12 1167.96 1173.8 1179.64 1185.48 1191.48 1198.24 1206.23 1210.23 1218.22 1222.06 1230.21 1238.36 1246.66 1250.5 1258.8 1266.94 1275.4 1222.72 1287.54 1291.54 1228.25

Railways (Rs. Crs)

Index of Railways (1873 = 100)

16

17

95.72 96.29 96.87 97.46 98.04 98.64

0.79 1.17 1.72 2.53 3.73 4.91

11.14

99.24 96.80 100.44 101.04 101.65 102.28

5.14 4.94 5.79

100.00 103.31 103.83 98.83 104.86 105.39 105.92 106.45 106.98 107.51 108.05 108.67

7.09 8.14 7.62 11.24 1585 14.18 15.32 18.14 22.92 25.74

109.39 109.75

32.85 33.98 35.06 38.88 38.6 38.62 39.26 45.13 45.5 56.47

110.48

110.83 111.56 112.30 113.06 113.40 114.16 114.90 115.66 110.89 116.76 117.13 111.39

5.95 5.82 5.91

29.66 28.92

57.37 55.02 57.57 61.87 69.01

16.50 24.26 35.68 52.61 69.25 72.50 69.68 81.66 83.92 82.09 83.36 100.00 114.81 107.48 158.53 223.55 200.00 216.08 255.85 323.27 363.05 418.34 407.90 463.33 479.27 494.50 548.38 544.43 544.71 553.74 636.53 641.75 796.47 809.17 776.02 811.99 872.64 973.34

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42

Money, Income, Prices in 19 Century India Table 3.5: Sector-wise Net Domestic Product Estimates (Indian Union) at 1948-49 Prices (Continued) Trade and other Transport LRs.Crs)

1 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

18 257.93 310.16 362.55 329.5 340.35 241.87 308.47 356.49 347.08 357.00 413.60 359.44 348.59 364.4 414.19 419.65 425.04 396.39 441.44 507.71 560.69 610.31 659.34 631.00 657.99 684.74 694.75 693.15 701.81 698.53 752.02 705.76 735.03 757.32 761.35 687.09 656.48 817.87 794.15

Index of Trade and other Transport (1873 100)

=

19 73.99 88.98 104.00 94.52 97.64 69.39 88.49 102.27 99.57 102.41 118.65 103.11 100.00 104.54 118.82 120.38 121.93 113.71 126.64 145.65 160.85 175.08 189.14 181.01 188.76 196.43 199.30 198.84 201.33 200.39 215.73 202.46 210.86 217.25 218.41 197.11 188.32 234.62 227.82

Real Estate and Housing (Rs.Crs)

20 186.21 186.96 187.71 188.46 189.23 189.98 190.75 191.52 192.27 193.02 193.79 194.73 194.94 195.15 195.41 195.64 195.88 196.11 196.34 196.58 196.81 197.14 194.33 200.88 202.73 204.6 206.48 208.35 210.22 212.09 213.96 214.22 214.5 214.76 215.04 215.3 215.3 215.56 215.81

Index of Real Estate and Housing (1873 100)

21 95.52 95.91 96.29 96.68 97.07 97.46 97.85 98.25 98.63 99.02 99.41 99.89 100.00 100.11 100.24 100.36 100.48 100.60 100.72 100.84 100.96 101.13 99.69 103.05 104.00 104.96 105.92 106.88 107.84 108.80 109.76 109.89 110.03 110.17 110.31 110.44 110.44 110.58 110.71

=

Index of Banking and Banking and Finance Finance (Rs.Crs) I{1873 100

=

22 0.66 1.16 1.10 1.03 0.99 0.86 1.05 1.44 1.71 2.02 2.50 2.05 1.71 1.70 1.61 2.02 1.56 1.57 1.99 1.99 2.33 2.36 2.49 2.60 2.75 3.29 3.44 3.35 4.60 4.73 4.65 4.20 4.81 5.21 5.17 4.50 4.01 5.19 5.59

23 38.60 67.84 64.33 60.23 57.89 50.29 61.40 84.21 100.00 118.13 146.20 119.88 100.00 99.42 94.15 118.13 91.23 91.81 116.37 116.37 136.26 138.01 145.61 152.05 160.82 192.40 201.17 195.91 269.01 276.61 271.93 245.61 281.29 304.68 302.34 263.16 234.50 303.51 326.90

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

43

Table 3.5: Sector-wise Net Domestic Product Estimates (Indian Union) at 1948-49 Prices (Concluded) Year

I

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

Residual Index of RealNDP Index of Real Real NDP at 48- Index of Real Government Residual at 48-49 prices - NDP at 48-49 49 prices NDP at 48-49 (Rs.Crs at I (Rs.Crs at Government prices -I (Rs.Crs at 1948- prices -/I (1873 1948-49 (1873 = 100) 1948-49 prtces) (1873 = tOO) 49 prtces) = 100) prices) 24 25 26 27 28 29

99.21 99.21 101.42 104.48 100.75 91.8 106.74 124.99 115.65 122.13 125.58 129.82 128.62 123.34 150.28 147.74 120.81 116.83 123.44 139.36 156.74 155.19 156.74 152.68 160.29 168.9 171.82 165.34 167.35 158.22 164.17 155.66 164.51 175.66 179.33 169.38 156.98 183.01 190.72

77.13 77.13 78.85 81.23 78.33 71.37 82.99 97.18 89.92 94.95 97.64 100.93 100.00 95.89 116.84 114.87 93.93 90.83 95.97 108.35 121.86 120.66 121.86 118.71 124.62 131.32 133.59 128.55 130.11 123.01 127.64 121.02 127.90 136.57 139.43 131.69 122.05 142.29 148.28

3750.90 3799.72 3880.38 3674.19 3837.15 3652.11 3869.94 3776.73 3952.67 3979.92 4033.58 4058.28 3926.42 4091.34 4199.85 3933.84 4022.47 4235.65 4231.17 4237.51 4409.55 4481.53 4568.25 4535.25 4638.80 4734.23 4737.59 4735.94 4856.90 4858.87 4858.16 4982.93 5116.59 5137.34 5077.82 4738.12 4962.44 5268.05 4943.41

9553 96.77 98.83 93.58 97.73 93.01 98.56 96.19 100.67 101.36 102.73 103.36 100.00 104.20 106.96 100.19 102.45 107.88 107.76 107.92 112.30 114.14 116.35 115.51 118 14 120.57 120.66 120.62 123.70 123.75 123.73 126.91 130.31 130.84 129.32 120.67 126.39 134.17 125.90

3748.18 3813.45 3865.85 3641.23 3799.12 3543.23 3857.22 3640.49 3941.66 3971.37 4012.13 4079.26 3875.24 4124.29 425055 3821 88 3919.87 4328.06 4262.22 4190.90 4429.71 4508.22 4604.46 4561.46 469389 4829.30 4848.25 4791.51 4979.86 4974.91 4714.47 5012.86 5121.40 5340.03 5212.07 4612.69 5454.64 5673.91 5055.51

96.72 98.41 99.76 93.96 98.04 91.43 99.54 93.94 101.71 102.48 103.53 105.26 100.00 106.43 109.68 98.62 101.15 111.68 109.99 108.15 114.31 11633 118.82 117.71 121.13 124.62 125.11 123.64 128.50 128.38 121.66 129.36 132.16 137.80 134.50 119.03 140.76 146.41 130.46

44

th

Money, Income, Prices in 19 Century India

NDP of Indian Sub·Continent The procedure we have adopted is to first work out an estimate of sectoral and aggregate value added for the Indian Union and then to apply the relevant multiplier for the latter to derive the aggregate value added measures for the Indian subcontinent. The multiplier adopted is 1.22. The estimated domestic product for Pakistan areas has been taken as 17.5% of that of the Indian Union. The estimated domestic product of Burma has been taken as 4.5% of that of the Indian Union. A detailed note on the above basis will appear in Volume II. We now present figures of NOP of the Indian sub-continent along with figures of GOP at factor costs and at market prices. All these estimates are at current and constant (1873-74) prices. We also present estimates of per capita income at current and constant prices.

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

45

Table 3.6: Net Domestic Product (Measures I and II) of Indian Union Territories and Indian Sub-Continent - Real and Nominal and GOP and also Per ca pita figures and Indices

Year

1 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

SubSub- Continent Sub- Continent Continent Sub- Continent Sub- Continent Sub- Continent NOPCurrent NOPCurrent (Rs. Crs at (Rs. Crs at (1873 = 100) (1873 = 100) Prices (Rs. Prices (1873 = 1948-49 1948-49 prices) Crs) 100) prices)

2 4576.09 4635.66 4734.07 4482.51 4681.33 4455.58 4721.32 4607.61 4822.25 4855.50 4920.97 4951.10 4790.23 4991.44 5123.82 4799.29 4907.41 5167.49 5162.03 5169.76 5379.64 5467.47 5573.27 5533.01 5659.34 5775.76 5779.86 5777.85 5925.42 5927.82 5926.96 6079.17 6242.25 6267.55 6194.94 5780.51 6054.18 6427.03 6030.96

3 95.53 96.77 98.83 93.58 97.73 93.01 98.56 96.19 100.67 101.36 102.73 103.36 100.00 104.20 106.96 100.19 102.45 107.88 107.76 107.92 112.30 114.14 116.35 115.51 118.14 120.57 120.66 120.62 123.70 123.75 123.73 126.91 130.31 130.84 129.32 120.67 126.39 134.17 125.90

4 4572.78 4652.41 4716.34 4442.30 4634.92 4322.74 4705.81 4441.39 4808.82 4845.07 4894.79 4976.70 4727.79 5031.64 5185.67 4662.69 4782.24 5280.23 5199.91 5112.90 5404.25 5500.03 5617.45 5564.99 5726.54 5891.75 5914.86 5845.64 6075.43 6069.39 5751.65 6115.69 6248.11 6514.84 6358.72 5627.49 6654.66 6922.17 6167.72

5 96.72 98.41 99.76 93.96 98.04 91.43 99.54 93.94 101.71 102.48 103.53 105.26 100.00 106.43 109.68 98.62 101.15 111.68 109.99 108.15 114.31 116.33 118.82 117.71 121.13 124.62 125.11 123.64 128.50 128.38 121.66 129.36 132.16 137.80 134.50 119.03 140.76 146.41 130.46

6 656.21 664.75 706.32 701.06 752.29 793.09 803.10 730.77 820.27 770.08 705.67 738.70 721.41 803.62 753.20 729.49 893.15 992.16 929.16 832.33 812.33 814.65 841.56 879.75 899.83 895.24 895.88 941.79 1013.25 1013.66 1025.36 1167.20 1161.06 1121.89 1096.50 1092.52 1295.59 1182.57 1097.63

7 90.96 92.15 97.91 97.18 104.28 109.94 111.32 101.30 113.70 106.75 97.82 102.40 100.00 111.40 104.41 101.12 123.81 137.53 128.80 115.38 112.60 112.93 116.66 121.95 124.73 124.10 124.18 130.55 140.45 140.51 142.13 161.79 160.94 155.51 151.99 151.44 179.59 163.93 152.15

th

46

Money, Income, Prices in 19 Century India

Table 3.6: Net Domestic Product (Measures I and II) of Indian Union Territories and Indian SubContinent - Real and Nominal and GDP and also Per ca ita figures and Indices (Continued)

Year

1 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

SubSubSubSubContinent per SubSubContinent Continent Continent Continent NDP Continent NDP capita Income per capita NDPCurrent NDP Crr.Pric (Rs. At current Income (1873(Rs. At (1873-74 = (1873-74 = Prices 100) prices) 74 = 100) current prices) 100) (Rs. Crs)

8 655.74 667.16 703.68 694.78 744.83 769.45 800.46 704.40 817.98 768.43 701.91 742.52 712.01 810.09 762.29 708.73 870.37 1013.80 935.98 823.18 816.04 819.51 848.23 884.83 910.52 913.22 916.80 952.84 1038.90 1037.87 995.04 1174.21 1162.15 1166.16 1125.49 1063.59 1424.10 1273.68 1122.52

9 92.10 93.70 98.83 97.58 104.61 108.07 112.42 98.93 114.88 107.92 98.58 104.29 100.00 113.78 107.06 99.54 122.24 142.39 131.46 115.61 114.61 115.10 119.13 124.27 127.88 128.26 128.76 133.82 145.91 145.77 139.75 164.92 163.22 163.78 158.07 149.38 200.01 178.89 157.66

10 25.67 25.91 27.43 27.11 29.01 30.48 30.75 27.87 31.17 29.19 26.68 27.85 27.18 30.25 28.32 27.41 33.53 37.22 34.83 31.17 30.39 30.19 30.90 32.00 32.42 31.95 31.70 33.02 35.20 34.90 35.00 39.80 39.54 38.16 37.26 37.09 43.93 40.06 37.13

11 94.44 95.32 100.91 99.75 106.75 112.13 113.14 102.54 114.69 107.38 98.16 102.48 100.00 111.31 104.20 100.84 123.37 136.94 128.15 114.66 111.81 111.05 113.67 117.71 119.27 117.56 116.61 121.47 129.51 128.40 128.78 146.44 145.47 140.41 137.08 136.44 161.63 147.38 136.60

12 25.65 26.00 27.33 26.87 28.73 29.57 30.65 26.87 31.09 29.12 26.54 28.00 26.83 30.50 28.67 26.63 32.68 38.03 35.09 30.82 30.53 30.37 31.14 32.18 32.80 32.60 32.44 33.40 36.09 35.73 33.97 40.04 39.58 39.67 38.25 36.10 48.29 43.14 37.97

13 95.61 96.93 101.86 100.17 107.08 110.22 114.26 100.15 115.88 108.56 98.93 104.37 100.00 113.69 106.85 99.27 121.81 141.78 130.79 114.90 113.81 113.19 116.09 119.96 122.28 121.51 120.91 124.52 134.54 133.20 126.62 149.26 147.52 147.87 142.57 134.58 180.01 160.83 141.54

SubContinent percapitB Income (Rs. At 194849 DricesJ

14 179.00 180.67 183.83 173.36 180.55 171.22 180.79 175.74 183.27 184.03 186.06 186.69 180.48 187.92 192.68 180.33 184.25 193.87 193.51 193.57 201.27 202.59 204.62 201.23 203.90 206.16 204.49 202.56 205.86 204.10 202.33 207.31 212.57 213.20 210.51 196.22 205.30 217.71 204.00

NDP of the Indian Sub-Continent for the period 1861-62 to 1899-1900

47

Table 3.6: Net Domestic Product (Measures I and II) of Indian Union Territories and Indian Sub-Continent Real and Nominal and GDP and also Per capita figures and Indices (Continued)

Year

I

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

SubSubSubContinent per Continent Contment per per capita capita Income capita Income (1873-74 = Income (1873-74 (Rs.48-49) = 100) 100)

15 99.18 100.10 10186 96.06 100.04 94.87 100.17 97.37 101.54 101.96 103.09 103.44 100.00 104.12 106.75 99.91 102.09 107.41 107.22 107.25 111.52 112.25 113.37 111.49 112.97 114.23 113.30 112.23 114.06 113.08 112.11 114.86 117.78 118.13 116.64 108.72 113.75 120.63 113.03

16 178.87 181.32 183.14 171.81 178.76 166.12 180.20 169.40 182.75 183.63 185.07 187.66 178.13 189.43 195.00 175.20 179.55 198.10 194.93 191.44 202.19 203.80 206.24 202.39 206.32 210.30 209.26 204.94 211.07 208.97 196.35 208.56 212.77 221.62 216.08 191.03 225.66 234.48 208.63

17 100.41 101.79 102.81 96.45 100.35 93.26 101.16 95.10 102.60 103.09 103.90 105.35 100.00 106.34 109.47 98.35 100.80 111.21 109.43 107.47 113.51 114.41 115.78 113.62 115.82 118.06 117.48 115.05 118.49 117.31 110.23 117.08 119.45 124.41 121.30 107.24 126.68 131.63 117.12

Gross Domestic Product at Current Factor Cost (Rs. Crs)

18 666.83 670.13 712.72 706.31 757.54 802.31 812.70 740.50 835.25 780.96 715.13 74433 729.09 818.98 768.56 743.57 909.79 1007.52 954.76 854.09 825.13 83257 858.20 897.67 934.39 922.12 918.92 955.87 1033.73 1031.58 1042.00 1185.12 1177.70 1139.81 1115.70 1111.72 131223 1203.05 1146.27

Gross Domestic Product at Current Factor Cost (1873-74 = 100)

Gross Domestic Product at Current Factor Cost (Rs. Crs)

Gross Domestic Product at Current Factor Cost (1873-74 = 100)

19 91.46 91.91 97.76 96.88 103.90 110.04 111.47 101.56 114.56 107.11 98.08 102.09 100.00 112.33 105.41 101.99 124.78 138.19 130.95 117.15 113.17 114.19 117.71 123.12 128.16 126.48 126.04 131.10 141.78 141.49 142.92 162.55 161.53 156.33 153.03 152.48 179.98 165.01 157.22

20 666.36 672.54 710.08 700.03 750.08 778.67 810.06 714.13 832.96 779.31 711.37 748.15 719.69 825.45 777.65 722.81 887.01 1029.16 961.58 844.94 828.84 837.43 864.87 902.75 945.08 940.10 939.84 966.92 1059.38 1055.79 1011.68 1192.13 1178.79 1184.08 1144.69 1082.79 1440.74 1294.16 1171.16

21 92.59 93.45 98.67 97.27 104.22 108.20 112.56 99.23 115.74 108.28 98.85 103.96 100.00 114.70 108.05 100.43 123.25 143.00 133.61 117.40 115.17 116.36 120.17 125.44 131.32 130.63 130.59 134.35 147.20 146.70 140.57 165.65 163.79 164.53 159.05 150.45 200.19 179.82 162.73

th

48

Money, Income, Prices in 19 Century India

Table 3.6: Net Domestic Product (Measures I and II) of Indian Union Territories and Indian Sub-Continent - Real and Nominal and GDP and also Per capita figures and Indices (Concluded) Gross Gross Gross Gross Domestic Domestic Domestic Domestic Product at Product at Product at Current Year Product at Current Market Current Market Current Market Market Prices (1873-74 Prices (Rs. Prices (Rs.) Prices (1873Crs) = 100) 74 = 100) 1

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

22 680.15 683.69 726.16 720.90 772.00 816.00 828.57 756.37 850.86 797.98 731.77 761.23 746.63 836.64 786.61 761.49 928.09 1026.59 974.73 874.83 845.87 851.26 877.02 917.25 954.23 942.73 940.04 978.65 1057.79 1056.54 1067.60 1210.98 1203.30 1169.12 1147.19 1141.93 1342.69 1234.79 1177.50

23 91.10 91.57 97.26 96.55 103.40 109.29 110.97 101.30 113.96 106.88 98.01 101.96 100.00 112.06 105.36 101.99 124.30 137.50 130.55 117.17 113.29 114.01 117.46 122.85 127.81 126.27 125.90 131.08 141.68 141.51 142.99 162.19 161.16 156.59 153.65 152.94 179.83 165.38 157.71

24 679.68 686.10 723.52 714.62 764.54 792.36 825.93 730.00 848.57 796.33 728.01 765.05 737.23 843.11 795.70 740.73 905.31 1048.23 981.55 865.68 849.58 856.12 883.69 922.33 964.92 960.71 960.96 989.70 1083.44 1080.75 1037.28 1217.99 1204.39 1213.39 1176.18 1113.00 1471.20 1325.90 1202.39

25 92.19 93.06 98.14 96.93 103.71 107.48 112.03 99.02 115.10 108.02 98.75 103.77 100.00 114.36 107.93 100.48 122.80 142.19 133.14 117.42 115.24 116.13 119.87 125.11 130.89 130.31 130.35 134.25 146.96 146.60 140.70 165.21 163.37 164.59 159.54 150.97 199.56 179.85 163.10

NDP of the Indian Sub-Continentforthe period 1861-62 to 1899-1900

49

Real Income of India and Undivided India 6500 log gr rt = 0 94 %

6000

RNDPUI48

5500 co~ 00 ..,.

5000

OJ ~

U C2

4500

I

1 1

I 4000

-~

3500

-L---t-r-"r-r-t~ r -T-'--'

I

1861

1867

-,

+-,- T -, ,--'

1873

I ~rT'

T T+ . - '-'. T

1879

1885

r -\-

~ ~r --,,-1

1891

1897

Rainfall and Real Income from Agriculture

E c:c. .,. ::: 00

2300

T

2200

-i

2100

~

~

~

u

5

----~----

---

---~~-

---

-------- ----

--~-T

128

I I

136

...

~

\

RNFX

\

120

I

~

112

2000

104

g

.

00

0

S. D ---> C. V ---> G rts (%)

1861-1900

1.42

4.07

2.46

-1.50

1.50

-1.50

1.78

1.00

-0.78

1861-72 1872-93

-1.22 2.23

1.39 3.17

-0.52 -1.75

052 1.75

-0.52 -1.75

-2.54 -0.72

-0.38

0.53

1.76

-1.77

1.76

3.80 2.39 2.49

1.26 1.67

1893-1900

5.85 5.43 2.43

1.80

-0.70

Money, Income, Prices in 19th Century India

128

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

IMP TJ £>,'P_T_Y

47 2.96 2.99 338 354 3.47 3.22 3.90 4.31 3.51 3.92 3.98 3.79 4.11 3.93 4.49 4.48 437 334 4.12 5.55 4.55 5.59 5.77 5.56 5.35 6.00 634 6.51 5.99 6.24 5.98 5.01 5.85 5.76 584 6.13 5.03 5.36 5.90

48 4.79 632 8.17 8.57 7.67 4.64 5.55 637 5.59 6.29 7.85 6.58 6.67 6.11 6.71 730 6.41 538 6.28 7.79 8.85 8.97 9.20 831 8.06 8.60 8.83 9.09 8.96 8.69 931 8.05 8.09 854 9.16 8.37 6.66 8.39 8.55

NETEXJJ NETTRIMJJ

49 1.86 333 4.79 5.02 4.21 1.42 1.66 2.06 2.08 2.37 386 2.78 256 2.18 2.22 2.82 2.04 2.04 2.15 2.24 4.30 3.38 3.43 2.75 2.71 2.59 2.49 2.59 2.97 2.50 3.33 3.04 2.24 2.77 3.32 2.25 1.64 3.03 3.00

1.90 2.56 2.45 1.38 052 1.20 1.12 1.70 1.38 039 1.18 063 0.46 0.71 0.36 0.89 1.19 0.27 0.62 0.79 1.86 1.34 1.24 1.18 1.38 0.91 1.19 1.13 1.54 1.39 0.73 0.61 1.07 0.11 0.90 -0.07 0.91 0.82 1.02

IMP T Y EXP T Y NETEX T Y NETTRIM T Y

Mean ---> S.D ---> C.V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

NETDISENG

51

50

12.36 8.65 823 8.65 9.35 12.6 11.82 13.81 14.32 14.87 13.49 14.16 14.53 1653 13.85 19.88 16.47 18.68 21.05 21.07 16.89 21.3 22.3 17.09 25.11 24.58 2505 20 26.43 20.1 24.83 25.64 26.43 33.05 29.92 27.27 26.18 26.86 28.58

NETDISENG REQFEX AVFEX FEX GAP

52 12.36 8.65 8.23 8.65 9.35 12.6 11.82 13.81 1432 14.87 13.49 14.16 14.53 16.53 13.85 19.88 16.47 18.68 21.05 21.07 16.89 21.3 22.3 17.09 25.11 24.58 25.05 20 26.43 20.1 24.83 25.64 26.43 33.05 29.92 27.27 26.18 26.86 28.58

53 50.32 52.9 59.62 59.61 67.67 57.3 60.87 66.36 61.78 56.99 58.7 51.87 56.06 62.52 60.24 72.78 77.4 67.51 78.65 84.62 79.43 87.86 91.51 88.66 9736 102.01 109.21 109 118.83 119.53 116.52 122.17 130.42 128.49 125.78 130.24 148.99 145.27 123.12

54 39.9 48.9 65.85 68.78 65.6 69.82 43 52.13 55.72 56.72 57.6 63.17 56.15 60.83 59.6 63.15 64.52 73.2 67.89 73.68 7695 85.89 87.44 83.56 86.99 93.57 101.95 10293 113.23 104.19 116.14 1 L833 116.73 121.26 1243 122.94 129.23 143.83 112.76

55 10.42 4.00 -6.23 -9.17 2.07 -12.52 17.87 14.23 6.06 0.27 1.10 -11.30 -0.09 1.69 0.64 9.63 12.88 -5.69 10.76 10.94 2.48 1.97 4.07 5.10 1037 8.44 7.26 607 5.60 1534 038 3.84 13.69 7.23 1.48 730 19.76 1.44 10.36

NETDISENG NETDISENG REQFEX AYFEX FEX GAP

4.77 1.09 2283

7.53 1.34 17.79

2.77 0.83 30.00

1.05 0.57 54.13

1928 6.60 34.23

19.28 6.60 34.23

88.16 29.92 33.93

83.29 27.72 33.28

4.87 7.43 152.81

1.82 2.90 2.46 0.43

1.05 0.36 1.74 -0.27

-0.03 -2.64 055 -0.68

-9.50 2.86

3.05 4.94 2.77 0.06

3.05 4.94 2.77 0.06

2.83 1.17 4.03 1.28

2.74 0.86 3.68 1.06

036

Time Series of Macro Economic Variable

129

Table 6.1: Various Time Series (Continued) Year

MERIMPJJ NMEXJJ TRIMPJJ 57 58 59 2.96 1.83 207 2.99 2.85 3.33 3.38 4.79 3.02 2.87 3.54 5.02 421 3.37 3.47 4.04 1.74 3.22 1.46 390 0.67 1.99 4.32 1.79 3:51 2.14 1.55 3.92 2.05 0.87 398 2.89 1.63 3.79 0.70 3.73 2.60 0.94 4.11 2.03 1.06 3.93 2.02 0.87 4.49 4.48 2.47 1.85 1.91 4.08 1.92 3.34 2.42 0.97 4.12 1.57 1.25 5.55 1.47 1.09 5.30 2.75 1.45 5.60 3.21 1.55 5.77 2.91 1.45 556 2.75 1.58 5.35 2.71 1.59 6.00 256 1 52 6.34 2.49 1.87 6.51 2.59 1.83 2.01 5.99 2.97 2.38 6.24 2.45 1.92 5.98 3.33 2.29 5.01 305 5.85 2.24 2.05 576 2.77 1.72 5.84 1.84 3.31 2.16 6.13 2.25 3.36 5.03 1.64 3.03 3.44 5.36 5.54 3.00 1.87

NEXJJ

NEDISENGJJ

60

61

MEREXP_T_Y MERIMP_T_Y NMEXJ_Y TRIMP_T_Y

NEXJ_Y

MEREXPJJ

56 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900 Mean ---> S.D ---> C.V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

4.79 6.32 8 17 8.57 7.67 7.26 4.57 6.11 5.65 5.96 6.87 7.52 6.71 5.96 6.51 6.95 6.00 5.76 5.69 7.02 8.05 881 8.68 8.31 8.06 8.60 8.83 9.09 896 8.69 9.31 8.05 8.09 8.54 9.16 8.37 6.66 8.39 8.54 7.47 1.30 17.47

4.78 1.09 22.79

2.69 0.88 32.66

1.84 0.70 37.96

1.00 -066 1.87 -0.28

1.80 2.91 2.48 -0.09

-0.02 -5.44 0.86 -0.68

0.55 -8.66 3.68 4.00

-0.24 0.48 1.77 2.15 0.84 2.31 -078 -020 0.60 1.18 126 3.04 1.67 0.98 1.15 0.62 0.01 1.45 0.31 0.38 1.30 1.66 1.46 1 17 1.12 1.03 0.62 0.75 0.96 0.07 1.42 0.76 0.19 1.06 1.48 0.08 -1.72 -0.42 1.13 0.85 0.88 103.87

-1.80

1.64 1.14 102 1.09 1 10 140 1.29 1.66 1.53 1.69 1.68 1.69 1.76 1.79 1.60 2.38 1.62 1.65 1.97 2.20 1.82 2.29 2.33 1.71 2.41 2.39 2.44 1 87 2.29 1.74 2 14 1.94 2.01 2.59 2.40 2.20 1.79 2.00 2.24 NEDISENG_T_Y

1.86 0.42 22.37 159 3.52 1.08 -0.24

RBILJJ 62 0.97 -0 15 -0.19 -0.20 -0.30 0.33 -0.32 0.05 -0.03 0.10 -0.14 0.05 -027 0.19 -0.47 0.44 -0.34 0.00 0.20 0.39 -0.32 0.17 0.14 -036 0.44 0.09 0.10 -0.40 0.31 -0.25 0.04 -0.21 -0.11 0.12 0.10 -0.07 -0.03 0.07 000 RBIL_T_Y

0.00 0.29 7777.50

LSP

63 88.2867 90.9965 92.8322 94.5804 90.9965 91.958 90.1224 89.2483 88.2867 86.5385 90.1224 982517 100 91.958 865385 85.5769 84.7028 78.4091 74.8252 79.2832 76.5734 75.6993 73.8636 68.5315 64.8601 62.1503 61.2762 63.1119 64.8601 64.8601 64.8601 61.2762 61.2762 56.7308 55.8566 54.9825 55.8566 57.6923 61.2762 LSP

76.39 14.22 1861 -1.57 -0.34 -2.32 -0.43

Money, Income, Prices in 19th Century India

130

Table 6.1: Various Time Series (Continued) Year

LG_S LG_S,(

IPSILX

65 97.46 96.44 96.56 96.56 97.07 96.95 97.90 9796 98.09 97.90 97.96 98.28 100.00 101.65 104.20 112.34 108.14 112.72 115.65 113.42 114.63 114.82 117.18 117.11 121.88 130.60 132.89 138.30 138.80 124.94 131 62 148.98 166.54 205.09 198.41 193.00 215.52 220.36 216.03

66 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 93.19 93.75 95.81 89.56 75.5 73.44 73.44

64 1861-62 15.32 1862 15.16 1863 15.18 1864 15.18 1865-66 15.26 1866 15.24 1867 15.39 1868 15.4 1869 15.42 1870-71 15.39 1871 15.4 1872 15.45 1873 15.72 1874 15.98 1875-76 16.38 1876 1766 17 1877 1878 17.72 1879 18.18 1880-81 17.83 1881 18.02 18.05 1882 1883 18.42 1884 18.41 1885-86 19.16 1886 20.53 20.89 1887 1888 21.74 1889 21.82 1890-91 19.64 1891 20.69 1892 23.42 1893 26.18 1894 3224 1895-96 31.19 1896 30.34 1897 33.88 1898 34.64 1899-1900 33.96

PGINDX

67 9763 97.42 97.69 97.58 97.76 109.27 108.47 10843 108 1 111 8 96.67 98.25 100 119.79 103.35 114.43 102.93 112.87 123.16 123.18 117.97 120.2 114.41 121.55 134.69 140.97 147.2 156.92 149.24 138.92 150.1 159.97 153.64 175.29 167.98 162.39 161.95 124.84 14623 PGINDX

WSTG

68 224 230 236 242 248 254 260 266 272 278 284 290 295 299 304 309 315 321 326 331 336 341 346 351 356 361 366 371 377 383 389 396 404 413 423 433 444 458 473 WSTG

WSTSIL

69 5139 5174 5209 5244 5279 5322 5365 5408 5451 5494 5557 5620 5683 5738 5800 5868 5931 6004 6078 6153 6232 6318 6407 6489 6581 6674 6770 6879 6999 7125 7262 7415 7580 7745 7913 8070 8230 8399 8567 WSTSIL

R_GST_SST

70

R_GST_SSTX SlUMP

71 4.36 4.45 4.53 4.61 4.70 4.77 4.85 4.92 4.99 5.06 5.11 5.16 5.19 5.21 524 5.27 5.31 5.35 5.36 5.38 539 5.40 5.40 5.41 5.41 5.41 5.41 539 539 5.38 5.36 5.34 533 533 5.35 5.37 5.39 5.45 5.52

LG_S LG_SX

IPSILX

Mean ---> 20.09 127.79 S. D ---> 6.06 38.52 C. V ---> 30.14 30.14 G rts (%) 1861-1900 2.11 2.11 1861-72 0.16 0.16 1872-93 1.74 1.74 1893-1900 4.91 4.91

97.30 7.14 7.34

124.95 23.79 19.04

333.46 67.28 20.18

6389.03 1012.94 15.85

5.19 0.31 5.93

-0.41 0.00 0.00 -4.84

1.46 1.02 2.23 -2.31

1.78 2.37 1.55 2.51

1.33 0.77 1.34 2.05

0.45 1.60 0.21 0.46

83.97 85.64 87.28 88.90 90.50 91.94 93.36 94.75 96.13 97 48 98.45 99.41 100.00 100.38 100.97 10144 102.31 103.00 103.33 103.63 103.86 103.98 104.03 104.20 104.21 104.20 104.15 103.90 103.77 103.55 103.19 102.88 102.68 102.73 102.98 103.36 103.93 105.05 106.36

72 9.09 1255 12.80 10.07 18.67 696 5.59 8.60 7.32 0.94 6.52 0.72 2.50 4.64 4.60 1.60 7.20 14.70 4.00 7.90 390 5.40 7.50 6.40 7.20 11.60 7.20 9.20 9.20 10.90 14.20 9.00 12.90 13.70 6.30 6.60 5.90 8.50 4.00

R_GST_SST R_GST_SSTX SlUMP

9989 5.93 5.93

SIUMPST

73 100.65 109.74 122.29 135.09 145.16 163.83 170.79 176.38 184.98 192.30 193.24 199.76 200.48 20298 207.62 212.22 213.82 221.02 235.72 239.72 247.62 251.52 256.92 264.42 270.82 278.02 289.62 296.82 306.02 315.22 326.12 340.32 349.32 362.22 375.92 382.22 388.82 394.72 403.22 SIUMPST

7.86 3.99 50.72

249.43 84.50 33.88

0.73 0.45 1.60 -13.84 7.12 0.21 0.46 -12.19

3.12 6.77 2.69 2.41

Time Series of Macro Economic Variable

131

Table 6.1: Various Time Series (Continued) Year

SILRECMINT SILRECMINTST SILRUP

74 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

75 8.89 11.36 969 9.32 14.50 5.81 4.32 5.84 673 1.07 4.21 1.96 2.71 4.75 4.80 2.00 7.90 17.30 96.60 9.60 330 3.00 600 3.80 6.70 9.40 4.90 11.20 7.50 8.70 12.90 6.50 12.30 440 0.10 0.30 0.70 1.30 0.60

12222 131.11 14247 152.16 161.48 17598 181.79 186.11 191.95 198.68 199.75 20396 205.92 208.63 213 38 218.18 220.18 228.08 245.38 34198 351 58 354.88 357.88 363.88 367.68 37438 38378 388.68 39988 40738 41608 428.98 435.48 447.78 452.18 452.28 452.58 453.28 454.58

76 7.07 9.25 11.48 10.36 1451 6.12 4.31 4.21 7.47 1.72 1.69 3.98 2.37 4.90 2.55 6.27 1618 7.21 10.26 4.25 2.09 6.43 3.66 5.79 10.29 462 10.79 731 8.55 13 16 5.55 12.69 4.81 0.09 0.29 0.57 0.99 0.70 2.23

SILRECMINT SILRECMINTST SILRUP

Mean ---> S. D ---> C. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

SILRUPST

77 115.22 122.29 131 54 143.02 153.38 167.89 174.01 17832 18253 190.00 191.72 193.41 197.39 199.76 204.66 207.21 213.48 22966 236.87 24713 251.38 253.47 25990 263.56 26935 279.64 284.26 295.05 302.36 310.91 324.07 32962 342.31 347.12 34721 347.50 348.07 34906 349.76 SILRUPST

SILCOINST

78 130.50 141 86 151.55 160.87 175.37 181.18 18550 19134 19807 199 14 20335 205.31 20802 212.77 217.57 219.57 227.47 24477 34137 350.97 354.27 35727 36327 36707 37377 383.17 38807 39927 406.77 415.47 428.37 434.87 447.17 451.57 45167 451.97 45267 453.97 45457

SILRUPMINTST

79 12423 194.92 194.92 19492 19492 194.92 194.92 194.92 194.92 194.92 194.92 194.92 194.92 199.27 20237 20647 219.96 22961 238.48 245.70 24626 253.41 255.72 260.57 270.4 7 27567 28453 291.61 299.08 310.84 317.26 327 73 32960 329.60 32960 329.60 329.60 329.60 339.32

SSCMINT

80 1627 25.85 20.93 2491 10.17 1885 1483 19.90 2163 30.71 5.17 39.15 36.22 47.37 44.03 47.79 23.68 2105 17.68 407 29.76 49.99 27.18 24.31 18.84 57.61 62.71 5448 55.54 26.19 47.09 6108 67.14 9.46 29.27 57.34 49.92 28.04 92.42

SILCOINST SILRUPMINTST SSCMINT

8.54 15.06 176.42

299.30 115.18 38.48

6.07 4.20 69.13

244.46 7272 29.74

307.23 11404 37.12

249 II 57.87 23.23

3432 19.72 57.44

-4.08 -14.93 3.94 -38.49

3.58 5.03 4.25 076

-4.30 -16.54 5.35 -16.59

2.75 5.33 2.69 062

3.45 435 416 0.47

2.00 2.05 2.61 0.29

2.70 -4.56 4.12 5.00

Money, Income, Prices in 19th Century India

132

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

SSCMINTST

81 641.63 667.48 688.41 713.32 723.49 742.34 757.17 777.07 798.70 829.41 834.58 873.73 909.95 957.32 1001.35 1049 14 1072.82 1093.87 1111.55 1115.62 1145.38 1195.37 1222.55 1246.86 1265.70 1323.31 1386.02 1440.50 1496.04 1522.23 1569.32 1630.40 1697.54 1707.00 1736.27 1793.61 1843.53 1871.57 196399

RECOIN

RECOINST

82 0.78 0.10 0.08 0.43 0.13 0.06 0.07 0.06 0.09 0.09 0.03 0.06 0.04 0.06 0.03 0.02 0.07 0.07 0.07 0.16 0.64 0.70 0.51 0.25 0.46 0.06 0.47 0.51 0.31 0.09 0.19 0.18 0.20 0.06 0.29 0.64 0.61 0.33 0.91

83 23.21 23.31 23.39 23.82 2395 24.01 24.08 2414 24.23 24.32 2435 24.41 24.45 24.51 24.54 24.56 2463 24.70 24.77 24.93 25.57 26.27 26.78 27.03 27.49 27.55 28.02 28.53 28.84 28.93 29.12 29.30 29.50 29.56 29.85 30.49 31.10 31.43 32.34

SSCMINTST RECOIN RECOINST

Mean ---> S.D ---> C. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

1190.16 394.43 33.14

0.25 0.25 97.36

26.46 2.66 10.07

2.95 2.59 2.95 2.45

4.14 -19.01 10.80 25.71

0.83 0.50 1.04 141

RUPNETEXP

RUPNETEXPST

TREACASHB

84

85

86

0.68 0.88 -0.73 0.92 -2.18 0.55 1.41 -0.38 095 1.72 0.67 122 1.65 1.41 1.91 2.79 1.10 1.62 1.74 1.42 1.09 0.88 1.00 1.86 0.78 1.06 1.36 1.48 1.45 1.26 1.58 2.36 1.59 1.24 1.16

RUPNETEXP

1679 17.67 16.94 17.86 15.68 16.23 17.64 1726 18.21 1993 20.60 21.82 23.47 24.88 26.79 29.58 30.68 32.30 34.04 35.46 36.55 37.43 38.43 40.29 4107 42.13 43.49 44.97 46.42 47.68 49.26 5162 53.21 54.45 5561

RUPNETEXPST

17.89 17.87 16.73 12.67 12.22 1174 10.79 9.84 9.81 12.69 17.09 19.57 17.33 13.26 14.54 14.28 11.57 12.40 13.64 11.93 1244 14.01 13.14 11.32 10.92 12.08 11.35 12.40 11.65 12.30 14.15 13.56 14.97 21.98 17.37

SCPCR

87 3.69 2.94 2.09 2.93 1.91 4.34 5.28 392 5.35 6.46 4.19 4.34 2.29 4.17 4.00 3.65 5.72 3.79 4.44 7.34 6.94 8.26 6.14 696 7.30 7.21 9.51 8.40 8.50 17.94 14.30 17.54 22.41 2270 17.94 13.75 14.51 15.15 5.24

TREACASHB SCPCR

COPCOMINT

88 15.07 15.03 28.91 23.17 26.93 14.36 2.64 9.02 0.61 2.50 1.10 1.45 11.10 1057 12.34 14.86 6.66 7.08 1.86 0.90 10.72 13.74 10.58 8 14 11.71 17.03 1015 20.45 17.83 16.63 13.11 12.95 12.01 821 17 69 18.76 4.92 8.01 COPCOMINT

1.13 0.86 7659

32.47 13.10 40.33

13.76 2.85 20.70

8.04 5.69 70.78

11.55 7.02 60.81

0.54

1.61 4.11

-3.48 -1.38

4.88 746 7.18 -14.31

8.53 -7.36

Time Series of Macro Economic Variable

133

Table 6.1: Various Time Series (Continued) Year

COPCOMNTST

89 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

233.97 249.00 277.91 301.08 328.01 342.37 345.01 354.03 354.03 354.64 357.14 358.24 359.69 370.79 381.36 393.70 408.56 415.22 422.30 424.16 425.06 435.78 449.52 460.10 468.24 47995 496.98 507.13 527.58 545.41 562.04 575.15 588.10 600.11 608.32 626.01 644.77 649.69 65770 COPCOMNTST

Mean ---> S. D ---> C.V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

444.59 116.53 26.21 2.31 4.21 2.27 2.00

RTB

90 IH9 17.65 12.36 1234 13.59 10.23 11.42 9.46 13.58 15.46 21.52 18.40 1359 13.60 15.22 11.39 11.93 11.07 11.70 11.56 11.12 1143 10.94 10.69 10.89 11.22 11.95 10.84 1100 7.78 9.75 8.35 1200 10.89 10.66 8.88 9.08 8.92 6.00 RTB

11.96 3.05 2550

RPCR

91 3.69 2.94 209 2.93 1.91 4.34 5.28 3.92 535 646 4.19 4.34 2.29 4.17 4.00 3.65 5.72 3.79 445 7.34 6.94 8.26 6.14 6.96 7.30 721 9.51 840 8.50 17.94 14.30 17 54 22.41 22.70 17.94 13.75 14.51 15.15 5.24 RPCR

RTBPCR

92 21.58 20.59 14.45 15.27 15.50 14.57 16.70 13.38 18.93 21.92 25.71 22.74 15.88 17.77 19.22 15.04 17.65 14.86 16.15 1890 18.06 19.69 17.08 17.65 18 19 1843 21.46 19.24 1950 2572 24.05 25.89 34.41 33.59 28.60 22.63 23.59 24.07 1124 RTBPCR

8.04 5.69 70.78

20.00 5.11 25.53

488 -1.46 -0.03 746 -2.81 7.18 -5.39 -14.31

0.95 1.59 0.95 -10.62

NETEXPSR

NETEXPSRST

NOTISSU

93

94

95

0.70 0.90 -0.70 0.90 -2.20 0.50 1.40 -0.40 0.90 1.70 0.70 1.20 1.60 1.40 1.90 1.00 1.00 1.62 1.73 0.89 070 070 0.70 075 0.70 0.80 1.36 0.85 0.90 0.90 0.95 1.17 0.40 1.40 1.10 1.60 1.50 2.00 1.40 NETEXPSR

18.30 19.20 1850 19.40 17.20 17.70 19.10 18.70 19.60 21.30 22.00 23.20 2460 26.00 27.90 28.90 29.90 31.50 33.20 34.10 3480 3550 3620 3700 3770 3850 3990 40.80 41.70 42.60 43.60 44.80 45.20 46.60 4770 49.30 50.80 52.80 54.20 NETEXPSRST

3.69 493 535 7.43 690 8.09 9.07 9.96 10.47 10.44 13 17 II 14 9.25 11.24 1100 11.62 13.57 11.42 12.36 13.40 13.91 14.51 1276 1458 14.17 13.88 16.42 15.74 15.77 25.69 24.08 26.40 30.41 30.70 25.94 23.75 24.76 28.20 28.74 NOTlSSU

NOTCIR

96 3.69 4.93 5.35 743 690 8.09 9.07 9.96 10.47 10.44 13.17 11.14 925 9.66 9.27 1026 11.00 970 11.03 11.59 10.51 II 12 10.50 1273 12.31 1190 14.49 1327 12.02 15.59 16.54 19.48 16.84 19.06 2010 18.76 1786 20.37 22.10 NOTCIR

DDBNK

97 0.45 2.37 2.52 2.72 2.49 2.24 2.60 2.54 2.64 3.69 2.57 3.81 2.80 3.17 3.48 3.01 4.38 3.98 4.16 5.86 3.31 4.12 4.32 4.98 630 5.84 7.30 7.15 7.42 12.27 12.56 12.03 11.78 12.89 13.47 13.06 11.87 12.36 13.20 DDBNK

0.94 0.75 79.77

33.08 11.45 34.62

1525 7.59 49.73

12.26 4.49 36.67

6.10 4.12 67.60

-I 69 11.77

3.17 1.40 3.17 2.86

4.28 11.12 3.53 -0.61

3.15 11.12 2.21 1.87

5.92 9.57 6.67 0.73

Money, Income, Prices in 19th Century India

134

Table 6.1: Various Time Series (Continued) Year

TOTDEPBK MINS

98 1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

1.67 8.76 8.15 10.05 9.2 8.53 9.79 9.35 9.78 12.51 1446 15.49 13.4 10.78 11.6 10.25 1274 12.66 13.72 16.14 14.13 14.51 14.89 16 18.25 19.35 21.57 23.1 23.63 34.94 36.25 36.14 35.66 39.54 41.44 40.05 38.11 39.58 41.95

99 81.45 89.37 107.52 117.72 135.49 130.24 138.6 145.54 141.64 135.69 130.57 133.81 134.8 134.17 130.48 136.01 145.38 152.98 165.16 166.86 155.31 157.12 156.32 160.98 164.3 163.84 168.3 172.15 173.42 182.27 18756 194.03 183.78 179.89 180.47 179.06 167.87 162.36 174.2

TOTDEPBK MINS

Mean ---> S.D ---> c.v ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

19.70 151.71 11.92 25.98 60.50 17.12 5.22 11.53 4.94 1.69

1.43 4.82 1.75 -1.89

MIAAB

100 85.45 9737 116.52 126.72 144.49 141.24 148.6 155.54 152.64 146.69 141.57 144.81 148.8 148.17 142.48 151.01 164.38 164.98 177.16 171.86 166.31 168.12 169.32 173.98 178.3 177.84 185.3 189.15 192.42 203.27 207.56 216.03 201.78 198.89 201.47 189.06 180.87 175.36 190.2

RCAD2MI

101

126.24 136.01 120.62 130.27 136.55 149.13 15167 143.51 140.24 136.65 133.81 143.65 14767 141.40 150.55 158.22 173.98 169.95 190.60 170.58 171.91 174.13 151.71 15366 162.45

MIAAB RCAD2MI

165.02 29.22 17.70 1.48 4.92 1.81 -231

149.88 18.35 12.24

SILCIRUI

102 72.98 78.04 96.24 103.51 121.28 115.43 121.71 127.77 124.35 117.28 110.22 114.07 116.92 114.71 111.50 116.56 124.05 132.97 142.89 141.89 133.61 135.03 135.03 135.25 141.52 141.74 141.95 147.02 149.65 148.65 152.51 156.36 149.08 141.02 140.02 140.23 130.95 122.89 130.38 SILCIRUI

127.62 18.87 14.78 1.08 4.44 1.58 -2.93

MGLD

MATK

LlNTIND

SINTIND

AVG I LIND

103 45.00 51.00 61.00 72.00 85.00 89.00 91.00 9400 98.00 93.00 89.00 90.00 87.00 90.00 87.00 90.00 100.00 103.00 107.00 108.00 106.00 107.00 107.00 109.00 11300 111.00 111.00 112.00 117.00 120.00 126.00 138.00 136.00 130.60 128.00 120.00 120.00 115.00 112.00

104 56.00 63.00 73.00 86.00 99.00 105.00 10600 10900 113.00 107.00 101.00 101.00 101.00 105.00 101.00 90.00 100.00 104.00 108.00 109.00 105.00 103.00 103.00 104.00 110.00 111.00 113.00 114.00 116.00 119.00 121.00 128.00 121.00 123.00 128.00 130.00 129.00 126.00 141.00

105

106

107

MGLD

MATK

LINTIND

101.76 107.23 2101 17.15 20.65 16.00 1.78 7.12 1.82 -3.12

1.26 6.29 1.00 1.24

3.54 3.64 3.73 3.67 3.64 3.61 3.7 37 373 3.86 3.93 3.91 3.95 4.17 4.2 4.3 4.15 3.91 4.04 4.02 4.09 4.19 4.1 4.11 4.04 4.04 4 3.78 3.76 3.53 3.26 328 3.56 3.69 3.55 3.66

4.1 5.1 5.5 8.6 7 9.1 5 6 6 5.7 4.7 5 3.9 6.2 5.7 6.7 8.4 5.4 6.4 4.6 5.3 6.6 6.8 6.4 5.4 6 5.6 5.5 7 5.8 3.1 3.5 4.9 5.3 4.3 5.7 7.9 8 5.9 SINTIND

4.5 4.5 4.5 4.6 4.6 4.6 4.6 4.6 4.6 4.5 4.4 4.4 4.4 4.4 4.3 4.3 4.3 4.1 4.1 4.1 4.1 4.1 41 4.1 4.1 4.1 4.1 4.1 4.3 4.1 4.1 4 4 3.5 3.5 3.5 3.5 3.5 3.5 AVG I LIND

3.83 0.26 6.78

5.85 1.34 22.98

4.17 0.35 8.38

0.11 0.35

-0.17 0.30 -0.61 9.03

-0.68 -0.04 -0.36 -1.91

Time Series of Macro Economic Variable

135

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

AVG I_LENG

UKSINT

UKLINT

108

109

110

45 4.5 4.6 47 4.7 4.9 4.9 4.7 4.6 4.6 4.6 4.7 4.5 4.5 4.4 4.4 44 4.4 4.2 4 4 4 4 3.9 38 3.8 3.5 3.4 3.4 3.4 3.5 3.4 3.2 3.3 3.1 3.3 3.2 3.1 3.1

47 3.56 3.14 226 2.62 359 2.14 2.53 3.05 3.55 322 257 2.4 2.33 265 2.53 2.85 2.88 277 176 232 1.18 0.96 1.56 192 2.62 3.35

3.24 3.24 3.2 3.16 3.15 3 15 308 3.05 3 2.99 2.97 297 3.02 2.98 2.95 2.97 2.81 267 2.7 2.65 2.61 3.52 2.39 2.28 2.25 228 2.36

AVG I LENG UKSINT UKLlNT

Mean ---> S.D ---> C.V --'-> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

4.03 0.59 14.72 -1.27 0.22 -1.67 -0.99

2.63 079 30.10

8.40

M3

111 033 1.68 1.25 193 177 82.67 95.76 113.15 125.05 142.20 136.53 14579 152.35 14878 144.51 142.46 14549 145.40 141.78 138.60 14325 153.74 161.66 174.72 177 14 16613 16751 166.89 172.00 176.25 177.35 182.57 188.10 189.63 204.94 211.25 218.14 207.66 206.54 M3

TD

112 81 87 105 115 133 1.71 1.93 1.78 1.88 3.39 2.54 3.82 3.21 3.54 3.14 3.40 5.28 5.18 5.65 7.37 7.41 6.99 7.23 8.25 9.65 9.99 11.51 1252 13.10 19.08 20.72 20.87 20.80 22.90 24.64 23.99 23.41 24.15 25.90 TD

11M

113 99.45 97.35 97.66 97.69 98.16 128 136 143 139 132 128 130 132 131 127 133 141 149 161 161 152 153 152 156 158 158 161 165 166 170 175 182 172 167 167 166 156 150 161 HM

CR

114 926 8.48 7.47 6.75 6.30 98.28 98.12 98.25 98.14 97.28 98.03 97.15 97.92 97.64 97.33 97.79 96.99 97.40 97.48 96.49 9H7 97.38 97.24 96.91 96.17 9644 9566 95.85 95.72 93.27 93.30 9380 9359 92.83 9254 92.71 92.93 9239 92 42 CR

I'ELMINS

115 8.83 7.78 6.90 6.27 5.91 6.92 661 572 6.63 6.49 6.17 6.28 6.11 6.87 6.63 6.14 7.00 7.41 6.48 5.73 5.96 5.92 6.13 622 6.34 6.28 609 6.20 6.66 6.33 6.19 6.82 7.16 7.09 6.92 6.94 8.73 8.28 7.32 VELMINS

I'ELMIAAB

116 10.34 971 8.35 7.67 7.04 6.38 6.17 5.36 6.15 6.00 569 5.80 5.53 6.23 6.08 5.53 6.19 6.87 6.04 557 557 554 5.66 5.76 5.84 5.79 553 5.64 6.00 567 5.60 6.13 6.52 6.42 6.20 657 8.10 7.66 6.71

VELSILCO

117 10.34 9.71 8.34 7.67 7.04 7.81 7.53 6.52 7.55 7.50 7.31 7.37 7.04 8.04 7.76 7.17 820 8.52 7.49 6.74 693 689 7.10 7.41 7.35 7.26 7.22 726 7.72 776 7.62 8.47 8.83 9.05 892 8.86 11.19 10.94 9.78

VELMIAAB VELSILCO

2.88 139.82 22.77 14483 0.34 61.29 33.30 23.31 11.78 43.84 146.25 16.09

84.66 29.98 35.42

6.68 0.74 11.08

6.40 1.12 17.51

8.01 1.13 14.13

9.76 1.42 67.12 -49.94 1.26 9.57 2.15 274

4.21 33.99 -0.19 -0.19

0.14 -2.46 -006 219

-036 -6.07 -0.12 2.61

0.37 -302 0.11 3.23

-342

1.31 4.21 1.55 -2.09

Money, Income, Prices in 19th Century India

136

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900 Mean --->

S.D ---> c.v ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

GOVRECU GOVEXPCU RSURDEF CSURRD

TLR

TIN

TCUS

TSALT

TSR

118 119 120 121 44.05 44.1 -0.05 0 43.33 43.5 0 1.83 45.04 44.96 0.08 0 45.85 46.04 -0.19 0 49.07 46.31 2.76 0 42.12 -2.52 44.64 0 4853 50.14 -1.61 0 -4.51 4926 53.41 0 50.9 53.38 -248 0 51.41 51.1 0.31 0 50.11 48.61 1.5 0 50.22 50.64 -0.42 0 5496 -5.36 -5.78 49.6 50.57 54.5 -3.93 0.99 60.43 5877 2.56 1.66 60.93 -2.18 -0.88 58.75 62.02 65.56 -3.54 2.11 65.18 2.13 63.05 -0.3 68.43 69.66 -1.22 1.16 74.29 77.92 -3.63 5.69 75.68 72 08 -4.53 3.59 70.27 69.6 0.67 0.06 71.84 69.96 1.87 -2.94 70.69 71.07 -0.38 -3.5 -2.8 5.2 74.46 77.26 77.15 0.17 0.71 77.33 8078 -2.02 2.61 78.75 81.69 81.65 0.03 -2.23 82.47 85.08 1.08 2.61 85.74 -4.09 82.05 3.68 89.14 88.67 0.46 -0.12 90.17 91 -0.83 -2.3 90.56 92.11 -1.54 12.1 0.69 -4.68 95.18 94.49 98.37 96.83 1.53 -4.68 -1.7 -1.73 94.12 95.83 96.44 101.8 -5.35 8.88 101.52 97.56 3.96 -2.27 102.68 98.53 4.15 -8.44 GOVRECU GOVEXPCU RSURDEF CSURRD 68.95 69.31 -0.32 -0.14 19.23 18.65 2.56 3.74 27.89 26.90 -792.17 -2742.04

122 19.5 19.4 19.9 19.7 20 18.7 19.9 19.8 21 20.6 20.5 21.3 21 21.2 20.2 21.5 19.8 19.8 22.3 21.8 21.1 21.9 21.8 22.3 21.8 22.5 23 23.1 23 23.9 24 23.9 24.9 25.5 25.4 26.2 23.9 25.6 27.4 TLR 22.03 2.17 9.84

123

124

125

126

2.45 1.66 2.85 1.76

2.38 1.84 2.65 1.26

0.79 0.60 0.75 1.11

2 1.8 1.4 1.2 0.69 0.02 0.65 0.5 1.1 2 0.8 0.58 0.02 0.03 0.91 0.01 0.01 0.1 0.1 0.7 0.5 0.5 0.5 0.5 0.5 0.5 1.3 1.4 1.5 1.59 1.6 16 1.6 1.7 1.8 1.8 1.8 1.8 1.9 1.00 0.68 67.58

2.8 24 2.3 2.2 2.2 2 2.5 2.6 2.4 2.6 2.5 2.6 2.6 2.6 2.7 2.4 2.6 2.3 2.2 2.5 2.3 1.2 1.1 1 1.2 1.2 1.3 1.3 1.5 1.7 1.7 1.6 1.6 3.8 5 4.4 4.6 4.8 4.6 TCUS 2.43 1.06 43.41

4.5 5.2 5 5.5 5.3 5.3 5.7 5.5 5.3 6.1 5.9 6.1 6.1 6.2 6.2 6.3 6.4 6.9 7.2 7.1 7.3 6.1 6.1 6.5 6.3 6.6 6.6 7.6 8.1 8.5 8.6 8.6 8.2 86 8.8 8.4 8.5 9.1 8.7 TSALT 6.79 1.29 18.95

4.09 -6.09 15.79 2.34

0.31 0.31 -3.82 15.87

1.56 2.04 1.45 0.62

TIN

TEX

127 1.6 1.7 18 2 2 1.8 2.2 2.2 2.2 2.3 23 2.3 2.2 2.3 2.4 2.5 2.4 2.6 2.8 3.1 3.4 3.6 3.8 4 4.1 4.3 4.5 4.7 4.8 4.9 5.1 5.2 5.3 5.5 5.7 5.6 5.4 5.7 5.7 TSR TEX 3.10 3.49 106 1.43 34.10 40.87 1.6 1.4 1.6 1.9 1.9 1.7 2.1 2.3 2.3 2.5 2.4 2.6 2.7 2.7 2.1 2.2 2.5 3 3 3.1 3.1 3.2 2.9 3.2 3.4 3.3 3.4 3.6 3.9 4 4.4 4.7 4.6 4.6 4.6 5 5.3 4.8 3.4

2.92 5.38 2.92 -1.84

3.62 3.56 4.69 1.11

Time Series of Macro Economic Variable

137

Table 6.1: Various Time Series (Continued) rear

1861-62 1862 1863 1864 1865·66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 18n 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

TTR

128 32 31.9 32 325 32.09 29.52 33.05 32.9 34.3 36.1 34.73 35.68 34.82 35.31 35.8 34.01 34.88 40.87 41.38 40.77 42.21 39.83 40.71 40.58 41.72 4374 44.4 45.56 48.01 48.8 49.24 50.69 51.02 53.85 56.5 53.15 55.35 58.19 56.1

TTR Mean ---> S.D ---> C.V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

KTSIiC

129 5.24 9.46 4.8 4.82 501 6.98 7.08 8.22 79 8.54 8.04 8.33 8.18 8.54 8.77 1546 15.87 16.77 17.47 17.33 17.35 17 32 18.45 17.52 18.42 19.81 2183 21.96 21.5 20.64 22.86 26.16 26.1 28.76 27.45 2621 25.3 2448 24.51

KTSHC

CNVIiC

130 8.04 8.02 8.03 8 14 906 9.88 10.55 11 99 12.16 13.12 12.97 13.49 13.41 141 1431 15.79 2221 16.84 1742 1732 17 36 17.32 IS.42 17.52 18.41 19.81 21.86 21.99 2144 20.7 22.91 26.11 26.07 28.76 27.45 26.22 25.32 24.48 24.53

CNYHC

BANIiC

131 7.11 6.73 617 646 7.41 777 917 8.97 8.75 9.73 9.12 9.4 9.53 9.42 9.94 11.59 11.43 1207 12.05 1338 13.78 1355 16.43 14.02 15.29 1671 18.7 18.79 18.47 17.6 2003 23.48 23.26 254 23.81 22.67 21.99 22.64 22.89

BANHC

TERMITUK

132 102.82 103.75 104.8 106.17 107.06 107.93 108.91 109.98 111.25 112.35 113.54 114.77 116.27 117.73 118.87 120.19 121.49 122.69 12449 126.36 128.14 130.33 132.31 1345 136.36 13863 140.55 143.19 145 17 1472 149.21 151.58 154.44 156.08 158.99 161.94 164.61 166.01 168.76

CBTRUK

133 549 555 560.9 570.3 577.5 583.9 5898 593.6 5982 604.1 613.8 623.8 638.9 653.2 665.2 679.7 6942 704.5 722 740 758.2 780.3 798.7 820.8 836.8 851.2 867.9 8887 9107 933.3 952.4 9763 10003 1019.7 1048.7 1081.7 1106.9 1121.7 1150.1

COVRE T )'

134 648 6.34 6.20 6.36 6.36 5.16 5.86 651 5.98 644 685 660 6.64 604 7.68 7.72 6.68 6.35 7.02 849 8.95 8.25 8 19 771 780 820 8.38 8.35 8.04 8.12 8.35 7.45 7.53 8.14 857 8.24 7.18 8.22 8.72

cavx

T

r

135 6.48 6.36 6.19 6.39 6.00 5.47 6.05 7.06 6.27 6.40 6.64 6.65 7.36 6.51 7.47 8.00 7.06 6.14 7.15 891 8.52 8.1S 798 7.75 8.10 8.18 8.59 8.34 7.80 7.77 8.31 751 7.65 8.08 8.44 8.39 7.58 7.90 8.37

LR T Y

136 2.87 2.84 274 273 2.59 2.29 240 262 2.47 2.58 2.80 2.80 2.81 2.53 2.57 2.82 2.13 1.93 229 2.49 249 257 2.49 2.43 2.28 2.39 2.45 2.36 2.17 2.26 225 1.97 2.07 2 18 221 2.29 178 2.07 2.33

SLTD T l'

137 066 0.76 069 0.76 069 0.65 0.69 0.73 0.62 0.76 0.81 0.80 0.82 0.74 0.79 083 0.69 067 0.74 0.81 0.86 0.72 0.70 071 0.66 0.70 0.70 0.78 0.77 0.80 0.81 071 0.68 0.74 0.77 0.74 0.63 0.74 0.74

TERMITUK CBTRUK GOYRE T Y GOYX T Y LR T Y SLTD T Y

41.39 8.38 20.25

1588 7.61 47.94

17.53 6.12 34.91

1425 5.94 41.67

130.24 20.07 15.41

780.05 185.57 23.79

7.34 0.98 13.35

7.39 0.91 12.28

2.42 0.27 11.26

0.73 0.06 7.91

1.68 1.06 1.83 1.65

4.69 4.22 5.20 -1.44

3.21 594 2.68 -1.40

370 4.22 422 -0.95

1.33 0.98 1.40 154

203 1.08 224 2.38

095 0.18 1.10 1 35

0.87 0.36 090 0.85

-072 -088 -1.00 070

0.05 056 -0.29 0.21

Money, Income, Prices in 19th Century India

138

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

TXR T Y

138 4.70 4.67 4.41 4.51 4.16 3.62 3.99 4.35 4.03 4.52 4.75 4.69 4.66 4.22 4.55 4.47 3.76 3.98 4.25 4.66 4.99 4.68 4.64 4.42 4.37 4.64 4.72 4.66 4.54 4.62 4.61 4.19 4.24 4.61 4.93 4.65 4.12 4.71 4.76

KTSHC T Y

CNVHC T Y

BANHC T Y

139

140

141

0.77 1.38 0.66 0.67 0.65 0.86 0.85 1.09 0.93 1.07 1.10 1.09 1.10 1.02 1.11 2.03 1.71 1.63 1.79 1.98 2.05 2.03 2.10 1.91 1.93 2.10 2.32 2.24 2.03 1.95 2.14 2.16 2.17 2.46 2.39 2.30 1.88 1.98 2.08

TXR T Y KTSHC T Y

Mean ---> S.D --->

1.18 1.17 1.11 1.13 1.17 1.21 1.27 1.59 1.43 1.64 1.77 1.77 1.80 1.69 1.82 2.07 2.39 1.64 1.79 1.98 2.05 2.03 2.10 1.91 1.93 2.10 2.33 2.25 2.03 1.96 2.15 2.16 2.17 2.46 2.39 2.30 1.89 1.98 2.08 CNYHC T Y

1.05 0.98 0.85 0.90 0.96 0.95 1.11 1.19 1.03 1.22 1.25 1.23 1.28 1.13 1.26 1.52 1.23 1.18 1.24 1.53 1.63 1.59 1.87 1.53 1.60 1.77 1.99 1.92 1.75 1.67 1.88 1.94 193 2.17 2.08 1.99 1.64 1.83 1.94 BANHC T Y

XADGOVREV

142 43.42 44.53 44.18 45.02 46.32 4254 49.58 5025 51 55 53.99 51.90 52.91 53.22 54.90 52.39 69.03 71.51 79.01 82.25 89.37 91.27 86.37 88.22 87.87 97.91 106.42 111.84 119.77 12328 113.78 127.65 144.45 14944 174.39 173.13 156.26 150.74 67.60 68.64 XADGOYREY

XADGOVEX

143 43.82 43.03 44.48 45.53 44.91 45.45 50.72 53.04 51.34 52.39 48.68 51.01 55.15 54.47 52.39 67.16 76.43 76.42 83.73 93.74 86.94 85.54 77.31 88.35 101.61 106.17 114.72 119.71 119.50 108.88 126.99 145.78 151.98 173.11 170.44 159.08 159.11 64.95 65.86

XADBSURDEF

144 -0.04 1.50 -0.30 -0.50 1.41 -2.91 -1.14 -2.79 0.21 1.60 3.22 1.90 -1.93 0.43 0.00 1.87 -4.92 259 -1.48 -4.37 4.33 0.84 10.90 -0.48 -3.70 0.25 -2.88 0.06 3.78 4.90 0.66 -1.33 -2.54 1.28 2.69 -2.82 -8.38 2.65 2.78

XADSTDT

145 32.12 31.86 26.33 26.15 26.97 28.56 29.72 31.22 35.22 3763 44.99 39.01 39.02 46.12 47.32 55.40 59.68 6003 70.87 71.46 68.19 68.61 68.14 69.30 73.81 84.23 84.14 95.03 98.19 104.41 107.40 106.68 108.11 114.01 113.90 113.88 117.27 119.77 179.47

XADGOYEX XADBSURDEF XADSTDT

c. V --->

4.46 0.31 6.91

1.63 0.58 35.44

1.84 0.39 21.15

1.48 0.39 26.01

86.33 39.79 46.08

86.15 40.22 46.69

G rts (%) 1861-1900 1861-72 1872-93 1893-190G

0.18 -0.42 0.09 1.24

3.19 2.74 3.46 -1.85

1.71 4.46 0.93 -1.81

2.20 2.74 2.47 -1.36

3.43 2.19 4.78 -11.57

3.40 1.97 4.80 -12.07

0.19 3.27 1735.81

70.11 36.07 51.45 4.60 3.34 4.71 5.04

Time Series of Macro Economic Variable

139

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

XADRUDT

146 105.14 105.56 99.72 99.73 99.71 102.11 10341 103.79 109.42 113.13 122.39 114.96 115.29 122.95 127.36 134.93 142.46 146.86 162.38 167.25 166.97 169.26 171.64 173.75 174.52 185.67 191.95 20662 211.63 218.43 222.27 222.76 233.35 234.29 234.34 238.33 248.99 246.74 313.42

XADCENSTDT

147 32.28 31.96 26.44 26.28 27.16 29.70 30.76 32.28 36.31 40.15 46.70 41.12 41 87 5004 52.53 64.82 68.87 72.76 85.19 85.97 82.24 84.32 83.68 86.14 97.06 11590 119.48 139.31 142.28 138.55 153.80 170.90 178.38 20887 200.46 189.04 183.29 179.89 179.47

XADRUDT XADCENSTDT

Mean ---> S. D ---> C. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

XADTODT

148 137.42 137.52 126.16 126.01 126.87 131.81 13417 136.07 14573 153.28 16909 156.08 157.16 172.99 179.89 19975 211.33 219.62 247.57 253.22 249.21 253.58 255.32 259.89 271.58 301.57 311.43 345.93 353.91 356.98 376.07 393.66 411.73 443.16 434.80 427.37 432.28 426.63 492.89 XADTODT

XGOVR T Y XGOEX T Y XSTDT T Y

149 5.75 5.88 5.50 5.67 5.43 4.72 5.41 6.03 5.49 6.14 6.44 6.30 6.46 5.95 6.05 826 7.03 6.97 7.68 934 9.86 9.28 9.21 8.77 9.41 10.34 10.91 11.22 10.68 9.87 10.99 10.91 11.35 13.67 13.86 12.58 10.29 5.03 5.38

150 5.81 5.68 5.54 5.73 5.26 5.04 5.54 6.37 5.47 5.95 6.05 6.07 6.70 591 6.05 8.04 7.51 6.75 7.82 9.80 939 9.19 8.07 882 9.76 10.32 11.19 11.22 10.35 9.44 10.93 1101 11.54 13.57 13.65 12.81 10.86 4.83 5.16

151

XTODT T Y

152

4.26 4.21 3.28 3.29 3.16 3.17 3.24 375 3.75 4.28 5.59 4.64 474 5.00 5.47 6.63 5.87 5.30 6.62 7.47 7.36 7.37 7.11 6.92 7.09 8.19 8.21 8.90 8.50 9.05 9.24 8.06 8.21 8.94 9.12 9.17 8.00 891 14.07

XGOVR T Y XGOEX T Y XSTDT T Y

18.21 1815 15.70 15.87 14.87 14.62 14.65 16.33 15.52 17.42 21.00 18.58 19.09 18.76 20.78 23.91 20.78 19.39 23.12 26.46 26.91 27.25 26.65 25.94 26.09 2931 30.38 32.41 30.65 3096 32.37 29.73 31.27 34.73 34.82 3441 29.51 31.74 38.65 XTODT T Y

RNDPAG48 J

153 1934.85 1921.03 1935.23 1748.24 1892.63 1799.57 1922.78 179586 1932.39 1930.64 1914.70 1976.30 1888.05 1988.31 2006.88 1813.77 1825.57 2066.74 1994.43 1901.81 1981.33 1988.27 2006.88 1988.75 2035.06 207591 204686 2030.91 2117.63 2111.08 2034.19 2198.03 2273.38 2227.95 2141.67 1964.94 2133.80 2218.12 2000.77 RNDPAG48 I

165.73 55.98 33.78

9375 5931 63.26

259.48 114.20 44.01

8.21 2.61 31.75

8.18 2.62 32.04

6.57 2.41 36.63

24.54 6.94 28.29

199398 123.12 6.17

2.90 130 3.29 341

5.95 3.86 6.46 -0.08

388 1.92 4.38 1.98

1.98 0.78 3.09 -11 86

1.95 056 3.11 -1236

3.15 1.92 3.02 475

2.43 0.50 2.69 1.68

0.41 0.03 051 -1.19

Money, Income, Prices in 19th Century India

140

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

RNDPAG41i /I

154 1932 13 1934.76 1920.70 1715.28 1854.60 1690.69 1910.06 165962 1921.38 1922.09 1893.25 1997.28 1836.87 2021.26 205758 1701.81 1722.97 2159.15 2025.48 1855.20 2001.49 2014.96 2043.09 2014.96 2090 15 2170.98 2157.52 2086.48 2240.59 2227.12 189050 2227.96 2278.19 2430.64 2275.92 1839.51 2626.00 2623 98 211287 RNDPAG48 II

Mean ---> S. D ---> C. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

RAG T Y1

155 0.52 051 0.50 0.48 0.49 0.49 0.50 0.48 0.49 049 0.47 0.49 0.48 0.49 0.48 046 0.45 0.49 0.47 0.45 0.45 0.44 0.44 044 0.44 0.44 0.43 0.43 0.44 0.43 0.42 0.44 0.44 0.43 0.42 0.41 0.43 0.42 0.40 RAG T YI

RAG T Y2

156 0.52 0.51 0.50 0.47 0.49 048 0.50 0.46 0.49 0.48 0.47 049 0.47 0.49 0.48 0.45 0.44 0.50 0.48 0.44 0.45 0.45 0.44 0.44 0.45 0.45 0.45 0.44 0.45 0.45 0.40 0.44 0.44 0.46 0.44 0.40 0.48 0.46 0.42 RAG T Y2

RAH48

157 188.90 191.26 193.61 196.03 198.48 200.94 203.45 193.44 208.52 211.07 213.66 216.27 206.60 221.47 223.92 202.35 228.86 231.35 233.90 236.48 239.10 241.98 246.75 251.62 256.40 261.27 266.24 271.27 276.41 281.67 287.00 292.46 297.99 303.68 307.38 281.99 313.85 323.73 292.00 RAH48

RF41i

158 6.72 6.52 7.76 8.64 8.84 672 7.56 1008 10.72 10.92 13.48 14.76 16.00 1388 18.52 15.76 14.52 12.40 14.72 18.48 22.72 24.60 27.12 24.20 26.72 27.56 28.20 32.20 33.88 33.04 33.68 32.20 36.00 33.26 36.60 35.76 31.76 39.36 38.52 RF48

RFlSH41i

159 16.68 16.77 16.95 17.13 17.22 17.40 17.49 17.67 17.85 18.03 18.12 18.30 18.40 18.48 1866 18.75 18.85 18.94 19.03 19.11 19.30 19.48 19.66 19.75 19.84 20.02 20.20 20.29 20.47 20.56 20.74 20.92 21.01 21.19 21.28 21.46 21.64 21.73 21.91 RFISH48

MFMX48

160 3.50 3.73 4.12 3.48 3.81 10.33 12.17 12.89 13 13 14.97 11.40 12.85 13.73 17.25 17.85 17.09 19.25 19.02 22.60 24.05 27.97 30.98 33.80 36.61 3794 43.73 46.32 50.14 55.72 61.97 61.83 63.85 65.06 74.90 77.23 79.96 83.51 90.07 86.68 MFMX48

MFMX T Y

161 0.00 0.00 000 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 001 0.01 O.oJ 0.01 0.01 0.01 0.01 002 0.02 0.02 0.02 0.02 MFMX T Y

RS1SE48

162 1055.45 1061 75 1068.21 1074.67 1081.12 1087.73 1094.34 1067.41 110756 1114.17 112093 1127.85 1102.69 1139.22 1144.91 1089.83 1156.28 1162.12 1167.96 1173.8 1179.64 1185.48 1191.48 1198.24 1206.23 1210.23 1218.22 1222.06 1230.21 1238.36 1246.66 1250.5 1258.8 1266.94 1275.4 1222.72 1287.54 1291.54 1228.25 RSISE48

2027.82 228.12 11.25

0.46 0.03 6.40

0.46 0.03 5.94

243.42 40.17 16.50

21.39 10.85 50.70

19.26 1.54 7.99

35.01 27.23 77.77

001 0.01 70.00

1169.40 71.19 6.09

0.68 -0.15 068 0.42

-053 -0.58 -0.64 -1.09

-0.38 -0.67 -0.54 -0.19

1.40 1.12 1.61 0.50

4.93 6.06 4.98 1.83

0.70 0.85 0.67 0.67

8.37 17.02 8.44 4.91

7.44 16.41 7.29 5.01

0.52 0.55 0.58 0.01

Time Series of Macro Economic Variable

141

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

Mean ---> s. D ---> c. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

RRAIL48

163 0.79 117 1.72 2.53 3.73 4.91 5.14 4.94 5.79 5.95 5.82 5.91 7.09 8.14 7.62 11.24 15.85 14.18 1532 18.14 2292 25.74 29.66 28.92 32.85 33.98 35.06 38.88 386 3862 39.26 45.13 455 56.47 57.37 55.02 57.57 61.87 69.01

RTRX48

164 25793 310.16 362.55 329.5 340.35 241.87 308.47 356.49 347.08 357 413.6 359.44 348.59 364.4 414.19 419.65 425.04 396.39 44144 50771 560.69 610.31 659.34 631 657.99 684.74 69475 693.15 701.81 698.53 752.02 705.76 735.03 757.32 761.35 68709 656.48 817.87 794.15

RTRX T YI

RHOSPR48

165 007 0.08 0.09 0.09 009 007 0.08 0.09 0.09 009

o. 0.09 0.09 0.09 0.10 011 011 0.09 0.10 0.12 013 0.14 0.14 0.14 o 14 0.14 0.15 015 0.14 0.14 0.15 0.14 0.14 015 0.15 0.15 013 0.16 0.16 RTRX T Yl

0

166 186.21 186.96 187.71 18846 189.23 189.98 190.75 191.52 192.27 193.02 193.79 194.73 194.94 195.15 195.41 19564 195.88 196 II 196.34 196.58 196.81 197.14 194.33 200.88 202.73 2046 206.48 208.35 210.22 21209 21396 214.22 214.5 21476 215.04 215.3 215.3 215.56 215.81

RBNK48

167 0.66 I 16 1.10 1.03 0.99 086 1.05 1.44 1.71 2.02 2.50 2.05 1.71 I 70 1.61 2.02 1.56 1.57 1.99 1.99 233 2.36 2.49 2.60 2.75 3.29 3.44 3.35 4.60 4.73 4.65 420 4.81 5.21 5.17 4.50 4.01 5.19 5.59

RRESG48

168 99.21 99.21 10142 104.48 100.75 91.8 106.74 124.99 115.65 122.13 12558 129.82 128.62 123.34 15028 147.74 120.81 11683 123.44 139.36 156.74 155 19 156.74 152.68 160.29 168.9 171.82 165.34 167.35 158.22 164.17 155.66 16451 175.66 179.33 169.38 156.98 18301 19072

RNDPIND.J8 I RNDPlND.J8 II

169 375090 379972 38~;o.38

3674.19 3837 15 3652.11 3869.94 377673 3952.67 3979.92 4033.58 4058.28 392642 4091.34 4199.85 3933 84 402247 4235.65 4231 17 423751 4409.55 4481.53 4568.25 453525 463880 4734.23 473759 4735.94 4856.90 4858.87 4858 16 4982.93 5116.59 5137.34 5077.82 4738.12 496244 5268.05 4943.41

170 3748.18 3813.45 3865.85 3641 23 3799.12 3543.23 385722 3640.49 3941.66 3971.37 4012.13 407926 3875.24 4124.29 4250.55 3821.88 3919 87 4328.06 4262.22 4190.90 4429.71 4508.22 4604.46 4561.46 4693.89 4829.30 4848.25 4791.51 4979.86 4974.91 4714.47 5012.86 5121.40 5340.03 5212.07 4612.69 5454.64 5673.91 505551

RNDPU148 I

171 457609 4635.66 4734.07 4482.51 4681.33 4455.5~

4721.32 460761 4822.25 4855.50 4920.97 4951.1 0 4790.23 4991.44 5123.82 479929 4907.41 5167.49 516203 516976 5379.64 5467.47 557327 5533 0 I 5659.34 5775.76 577986 5777.85 5925.42 5927 82 592696 6079.17 6242.25 6267.55 619494 578051 6054.18 6427.03 6030.96

RRAIL48

RTRX48

24.57 20.47 83.30

527.21 179.52 34.05

0.12 0.03 24.34

200.48 9.98 4.98

2.72 1.48 5451

141.66 27.58 1947

4379 12 485.31 11.08

4412.96 570.40 12.93

534252 592.08 11.08

10.15 19.81 1030 5.39

3.00 2.59 3.93 0.99

2.07 1.99 2.78 1.09

0.42 0.40 0.48 0.10

4.85 9.94 490 1.73

1.65 2.56 1.50 1.86

0.94 061 1.15 -0.10

106 0.52 1.23 0.61

0.94 061 1.15 -0 10

RHOSPR48

RBNK48

RRESG48

RNDPIND48 I RNDPIND48 II

RNDPUl48 I

Money, Income, Prices in 19th Century India

142

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

RNDPu/48 II NDPINDCUP I NDPINDCUP II

172 4572.78 4652.41 471634 4442.30 4634.92 432274 4705.81 4441.39 4808.82 4845.07 4894.79 4976.70 4727.79 5031.64 5185.67 4662.69 4782.24 5280.23 5199.91 5112.90 5404.25 5500.03 5617.45 5564.99 572654 5891.75 5914.86 5845.64 6075.43 6069.39 5751 65 6115.69 6248.11 6514.84 6358.72 5627.49 6654.66 6922.17 6167.72

173 537.88 54488 578.95 574.64 616.63 650.08 658.28 59899 672 35 631.22 578.42 605.50 591.32 658.71 617.38 597.94 732.09 813.24 761.61 682.24 665.84 667.75 689.81 721.11 737.57 733.81 734.33 771.96 830.53 830.87 840.46 956.72 951.69 919.58 898.77 895.50 1061.96 969.32 899.70

174 537.49 546.85 576.79 569.49 610.52 630.69 656 11 577.38 670.48 629.86 575.34 608.63 583.61 664.01 624.83 580.93 713.42 830.99 767.20 674.74 668.89 671.73 695.27 725.27 746.33 748.54 751.48 781.02 851.56 850.71 815.60 962.47 952.58 95587 922.54 871.80 1167.29 1044.00 920.10

RNDPUI48 II NDPINDCUP I NDPINDCUP II

Mean ---> S.D ---> C. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

NDPu/CU I NDPU/CU II PERCAPNDu/CU I PERCAPNDUICU II

175 656.21 664.75 706.32 701.06 752.29 793.09 803.10 730.77 820.27 770.08 705.67 738.70 721.41 803.62 753.20 729.49 893.15 992.16 929.16 832.33 812.33 814.65 841.56 879.75 89983 895.24 895.88 941.79 1013.25 1013.66 1025.36 1167.20 1161.06 1121.89 1096.50 1092.52 1295.59 1182.57 1097.63

176 655.74 667.16 703.68 694.78 744.83 76945 800.46 704.40 817.98 768.43 701.91 742.52 712.01 810.09 76229 708.73 870.37 1013.80 935.98 823.18 816.04 819.51 848.23 884.83 910.52 913.22 916.80 952.84 1038.90 103787 99504 1174.21 1162.15 116616 1125.49 1063.59 1424.10 1273.68 1122.52

177

178 25.67 25.91 27.43 27.11 29.01 30.48 30.75 27.87 31.17 29.19 26.68 27.85 27.18 30.25 28.32 27.41 33.53 37.22 34.83 31.17 30.39 }0.19 30.90 32.00 32.42 31.95 31.70 33.02 35.20 34.90 3500 39.80 39.54 38 16 37.26 37.09 43.93 40.06 37.13

25.65 26.00 27.33 26.87 28.73 29.57 3065 26.87 31 09 29.12 26.54 28.00 26.83 3050 28.67 26.63 32.68 38.03 35.09 30.82 30.53 30.37 31.14 32.18 32.80 32.60 32.44 33.40 36.09 35.73 33.97 40.04 39.58 39.67 38.25 36.10 48.29 43.14 37.97

NDPUICU I NDPUICU II PERCAPNDUICU I PERCAPNDUICU II

5383.81 695.89 12.93

730.25 136.55 18.70

736.73 152.49 20.70

890.90 166.59 18.70

898.81 186.04 20.70

32.30 4.53 14.03

32.56 5.22 16.02

1.06 0.52 1.23 0.61

1.46 1.41 1.71 0.11

1.58 132 1.79 0.82

1.46 1.41 1.71 0.11

1.58 1.32 1.79 0.82

1.04 1.06 1.19 0.00

1.16 098 1.27 0.70

Time Series of Macro Economic Variable

143

Table 6.1: Various Time Series (Continued) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 18991900

PERCAPNDPU/48 /

PERCAPNDPU/41i II

179

180 179.00 180.67 183.83 17336 180.55 171.22 18079 175.74 18327 184.03 186.06 186.69 180.48 187.92 192.68 180.33 184.25 193.87 19351 193.57 201.27 20259 204.62 20123 203.90 20616 20449 202.56 205.86 204.10 202.33 207.31 212.57 213.20 210.51 196.22 205.30 217.71 204.00

178.87 181.32 183.14 17 1.81 17876 166.12 180.20 169.40 182.75 183.63 185.07 187.66 178.13 189.43 195.00 17520 179.55 198.10 194.93 19144 202.19 203.80 20624 202.39 206.32 210.30 209.26 204.94 211.07 208.97 196.35 208.56 212.77 221.62 216.08 191.03 225.66 234.48 208.63

PERCAPNDPUI48 I PERCAPNDPUI48 II

Mean ---> S D ---> C. V ---> G rts (%) 18611900 1861-72 1872-93 18931900

GDPUlCU /

181 66683 670.13 712.72 70631 757.54 802.31 812.70 740.50 835.25 780.96 715.13 744.33 72909 818.98 768.56 743.57 909.79 100752 95476 854.09 825.13 832.57 858.20 897.67 934.39 922.12 918.92 955.87 1033.73 1031.58 1042.00 1185.12 1177.70 1139.81 1115.70 1111.72 1312.23 1203.05 1146.27

GDPUlCU II GDPUlMP /

182 666.36 672.54 710.08 700.03 750 O~ 778.67 81006 714.13 83296 779.31 711.37 748.15 719.69 825.45 777.65 722.81 887.01 1029.16 961 58 844.94 82884 837.43 864.87 90275 945.08 940.10 93984 966.92 1059.38 1055.79 1011.68 1192.13 1178.79 1184.08 1144.69 1082.79 1440.74 1294.16 1171.16

183 6S0 15 683.69 72616 720.90 772.00 S16.00 828.57 756.37 850.86 797.98 73177 761.23 746.63 83664 786.61 761.49 92809 102659 97473 87483 845.87 851.26 877.02 917.25 954.23 942.73 940.04 97865 1057.79 1056.54 1067.60 1210.98 1203.30 1169.12 1147.19 1141.93 1342.69 1234.79 1177.50

GDPUICU I GDPUICU II

GDPUIMP I

GDPUlMP II

Ul4 679.68 686.10 723.52 714.62 764.54 792.36 825.93 730.00 848.57 796.33 728.01 76505 737.23 843.11 795.70 74073 905.31 1048.23 981.55 865.68 849.58 856.12 883.69 922.33 964.92 960.71 960.96 989.70 1083.44 108075 103728 1217.99 120439 1213 39 117618 1113.00 147120 1325.90 1202.39 GDPUIMP II

GKS48

185 5990 6142 6332 6495 6662 6986 7307 7612 8110 8448 8716 8882 9123 9316 9520 9704 9880 10036 10308 10569 10741 10969 11181 11401 11829 12171 12468 12634 12868 13079 13264 13452 13629 13825 14034 14230 14384 14596 15030 GKS48

194.30 12.53 6.45

195.67 16.43 8.40

907.05 171.21 18.88

914.96 190.55 2083

927.64 17635 19.01

0.52

0.64

149

1.61

1.50

162

2.38

0.26 0.62 -021

0.18 0.70 0.50

1.46 1.74 0.35

1.37 1.82 1.04

1.48 1.75 041

1.40 1.82 1.09

3.91 214 1.49

93554 10562.13 195.65 272536 2091 25.80

Money, Income, Prices in 19th Century India

144

Table 6.1: Various Time Series (Continued) Year

GKSCU

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

186 858.97 880.76 944.73 1015.82 1070.58 1243.51 1242.92 1207.26 137951 1339.85 1249.87 1325.19 1373.92 1499.88 1399.44 1475.01 1798.16 1926.91 1855.44 170161 162l.89 1634.38 1688.33 1812.76 1880.81 1886.51 1932.54 2059.34 2200.43 2236.51 2294.67 2582.78 2534.99 2474.68 2484.02 2689.47 3078.18 2685.66 2735.46 GKSCU

Mean ---> S.D ---> C. V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

GICUP

187 2080 10.60 12.70 10.40 10.40 18.20 18.90 19.20 29.30 21.30 18.70 1l.10 16.00 3l.00 30.00 28.00 32.00 30.00 49.00 42.00 26.00 34.00 32.00 35.00 68.00 53.00 46.00 27.00 40.00 36.00 32.00 36.00 33.00 35.00 37.00 37.00 33.00 39.00 79.00 GICUP

1776.99 584.21 32.88

31.22 14.71 47.11

2.90 4.71 2.70 1.70

3.31 5.99 359 7.33

G148

GIOLD

GICU OLD

MACHIMP

MACHIMP &

MACHlMP48

188 145.05 73.92 85.12 6650 64.72 102.25 111.11 12106 172.25 134.30 130.40 74.40 106.24 192.55 204.08 184.21 175.82 156.25 272.22 260.87 172.19 228.19 21l.92 220.13 427.67 341.94 296.77 165.64 233.92 210.53 184.97 187.50 177.42 195.53 209.04 195.77 154.21 21l.96 434.07

189

190

191

192

193

GI48

186.99 85.15 45.54

152.00 190.00 163.00 167.00 324.00 321.00 305.00 49800 338.00 268.00 166.00 24l.00 193.00 204.00 184.00 176.00 156.00 272.00 261.00 172.00 228.00 212.00 220.00 428.00 342.00 297.00 166.00 23400 211.00 18500 188.00 177.00 19600 209.00 196.00 154.00 212.00 434.00 GIOLD

237.89 84.23 3541

2.79 #VALUEl 5.19 #VALUEl 0.53 303 7.11 7.13

2180 28.35 25.49 26.84 57.67 54.60 48.37 84.71 53.61 38.43 24.77 36.29 3107 29.99 27.97 32.03 29.95 48.96 42.02 25.97 33.97 32.01 34.98 68.05 53.01 46.04 27.06 40.01 36.08 32.01 36.10 32.92 35.08 36.99 37.04 32.96 39.01 78.99 GICU OLD

39.51 14.41 36.47

1.10 7.31

0.55 0.59 0.60 1.06 0.79 056 045 0.41 0.52 1.00 1.19 1.39 0.88 0.85 0.86 0.62 0.77 l.22 1.34 148 0.99 l.57 1.80 2.32 2.44 2.06 2.11 2.36 2.52 2.44 237 3.51 2.86 3.06 1.70 MACHIMP

l.46 0.85 58.20

7.14 -0.57

0.56 0.61 0.62 1.09 0.82 0.59 0.47 0.43 0.55 l.09 1.32 1.63 l.02 l.03 l.04 0.74 0.93 l.50 l.65 l.84 1.30 2.16 2.56 3.40 353 274 3.02 3.78 4.15 4.47 4.17 5.82 4.47 4.59 2.54 MACHIMP Rs

2.06 l.51 73.08

8.89 -2.34

3.47 3.42 3.66 6.90 4.81 3.74 3.24 2.87 3.68 6.75 8.96 10.71 5.59 5.37 5.76 4.61 6.15 10.07 10.91 11.60 8.20 13.95 16.49 20.84 20.63 16.02 17.48 19.68 22.34 24.99 2357 30.82 20.87 24.95 13.93 MACHIMP48

GDPUIMP

194 680.15 683.69 726.16 720.90 772.00 816.00 828.57 756.37 850.86 797.98 731.77 761.23 746.63 836.64 786.61 761.49 928.09 1026.59 974.73 874.83 845.87 851.26 877.02 917.25 954.23 942.73 940.04 978.65 1057.79 1056.54 1067.60 1210.98 1203.30 1169.12 1147.19 114l.93 1342.69 1234.79 1177.50 GDPUIMP

1l.92 7.96 66.84

927.64 176.35 19.01

8.33 -2.55

1.50 1.48 1.75 0.41

Time Series of Macro Economic Variable

145

Table 6.1: Various Time Series (Concluded) Year

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

GDPUIMP48

195 4743.04 4767.74 4867.04 4609.37 4803.98 4584.28 4871.06 4769.02 5002.09 5031.42 5102.98 5102.11 4957.70 5196.53 5351.10 5009.82 5099.39 5346.81 5415.19 5433.74 5601.76 5713.17 5808.10 5768.86 6001.47 6082.15 6064.76 6003.98 6185.89 617858 6171.12 6307.19 6469.34 6531.41 6481.32 6041.94 6274.28 67\0.83 6469.80 GDPUIMP48

Mean ---> S. D ---> C V ---> G rts (%) 1861-1900 1861-72 1872-93 1893-1900

5562.32 643.13 11.56 0.98 0.68 1.18 0.20

INV T t

196 3.19 3.90 3.54 3.48 707 6.59 6.40 9.96 6.72 5.25 3.25 4.86 371 381 3.67 3.45 292 5.02 480 3.07 3.99 3.65 3.81 7.13 562 4.90 276 3.78 3.42 3.00 2.98 2.74 3.00 3.22 3.24 2.45 3.16 6.71 INV T Y

KTY

197 1.26 1.29 1.30 1.41 1.39 1.52 1.50 1.60 1.62 1.68 1.71 1.74 184 1.79 1.78 1.94 1.94 1.88 1.90 1.95 1.92 1.92 1.93 1.98 1.97 2.00 2.06 2.10 2.08 2.12 2.15 2.13 2.11 2.12 2.17 2.36 2.29 2.17 2.32 KTY

GKS48X

198 65.66 67.32 69.41 71.19 73.02 76.58 80.09 83.44 88.90 92.60 95.54 97.36 10000 102.12 104.35 106.37 108.30 110.01 112.99 115.85 117.74 120.23 122.56 124.97 129.66 133.41 136.67 138.49 141.05 143.36 145.39 147.45 149.39 151.54 153.83 155.98 157.67 159.99 164.75 GKS48X

U1POPLN

199 255.65 25658 257.52 258.56 259.28 260.22 261.15 262.19 263.13 263.85 264.48 2652 265.41 265.62 265.93 266.14 266.34 266.55 266.76 267.07 267.28 269.88 272.37 274.96 277.56 280.16 282.65 285.24 287.84 290.44 292.93 293.24 293.65 293.97 294.28 294.59 294.9 295.21 295.63 UIPOPLN

U1POPLNX

200 96.32 96.67 97.03 97.42 97.69 98.04 98.39 98.79 99.14 99.41 99.65 99.92 100.00 100.08 100.20 100.28 100.35 100.43 100.51 100.63 100.70 101.68 \0262 103.60 10458 105.56 106.50 107.47 108.45 10943 11037 11049 11064 110.76 11088 110.99 111.11 111.23 111.39 UIPOPLNX

U1WF

201 117.85 118.27 118.68 119.1 119.51 119.93 120.35 120.76 121.28 121.49 121.9 122.21 122.32 122.42 122 63 122.73 122.84 122.84 122.94 123.15 123.25 124.4 125.54 12678 127.93 129.17 130.31 131.46 132.7 133.84 134.99 135.19 135.4 135.51 135.61 135.82 135.92 136.13 136.23 UIWF

RNFX73

202 122.48 123.60 117.99 97.76 110.11 103.37 116.86 91.02 108.99 112.37 110.11 114.62 100.00 117.99 119.38 95.51 97.76 123.60 113.48 101.13 110.11 112.37 111.25 11237 114.62 11911 116.86 110.11 119.11 116.86 102.25 125.85 134.84 126.97 103.37 96.63 106.74 107.87 78.65 RNFX73

4.32 165 38.15

1.87 0.29 15.73

115.77 29.87 25.80

274.22 13.78 5.03

103.32 5.19 5.03

126.39 6.36 503

110.87 11.03 9.95

-0.65 6.90

1.39 3.23 0.95 1.29

2.38 3.91 2.14 1.49

0.42 0.35 053 0.11

0.42 0.35 053 0.11

042 034 053 0.11

-007 -I 12 034 -5.95

146

Money, Income, Prices in 19th Century India

Appendix 1 GRAPHICAL DEPICTATION OF TIME SERIES ACCORDING TO FOUR PERIODS We give in the ensuing pages sequentially the computer-derived graphs of important time-series. The periods are: 1. 1861-62 to 1899-1900. This is the full period taken up for detailed study in this work. 2. 1861-62 to 1871-72. This is the period of the cotton boom and its aftermath till the exchange rate started falling due to the falling drift in the gold prices of silver. 3. 1872-73 to 1892-93. This is the period of the falling exchange rate till India went off the Silver standard by the closure of mints for the public for the free coinage of silver. And 4. 1893-94 to 1899-1900 . This is the period after the closure of the mints (June 1893) till the advent of the beginnings of the Gold exchange standard. Each graph has four boxes each for one of the periods. Each graph also has the linear-trend line of the particular series in that period. The thick black line indicates the course of the variable; and the broken line indicates the trend. The horizontal axis depicts years and the vertical axis the quantities / index numbers of the variable. The list of graphs is classified as follows: 1.Population, Capital, Production and Income; (1-13) 2.Prices; (14-21) 3. Trade and Related Matters; (22-39) 4. Silver Rupees, Money and Interest; (40-59) 5.Public Finances and Drain measures; (60-71). The classified list of graphs is given below: I. Population, Capital, Production and Income

1. Population ofIndian sub-continent for homogenous territory(unit=millions) 2. Gross Capital Stock at 1948-49 prices (unit= Rs. Crs) 3. Index of Rainfall (73-74=100) The graph shows that good years balance bad years : no trend. 4. Foodgrains Production: upward trend in all the periods. (Tons in millions on the vertical axis) 5. Agriculture - Net Domestic Product (measure I) (Rs. Crs in 48-49 prices) 6. Agriculture - Net Domestic Product (measure II) (Rs. Crs in 48-49 prices) 7. Manufacturing and Mining - Net Domestic Product (Rs. Crs in 48-49 prices) 8. Trade, Internal and Foreign- Net Domestic Product (Rs. Crs in 48-49 prices) 9. Banking and Finance - Net Domestic Product (Rs. Crs in 48-49 prices) 10. Net Domestic Product in the Indian sub-continent (measure I, with agriculture measure I) (Rs. Crs in 48-49 prices). Note the steep upward trend during 1871-72 to 1892-93. 11. Net Domestic Product in the Indian sub-continent (measure I , with agriculture measure I) (Rs. Crs at current prices). 12. Net Domestic Product in the Indian sub-continent (measure II, , with agriculture measure II) (Rs. Crs in 48-49 prices). Note the steep upward trend during 187172 to 1892-93. 13. Net Domestic Product in the Indian sub-continent (measure II, with agriculture measure II) (Rs. Crs at current prices).

Time Series of Macro Economic Variable

147

II. Prices 14. General Price Index - Weighted (1873-74 = 100) (Note the upward trend in all the periods) IS. The index of Prices in the UK (Note the generally falling trend in all the periods) 16. Indian General Price Index in terms of Gold Prices (1873-74 = 100) (Note the falling trend in all the periods. Gold price of Silver was falling. Indian price index was in silver rupees under the Silver standard till 1892-93. Note also that the Indian price index in Gold was falling at a lower trend rate than the UK price index, which was in Sterling (Gold» 17. Index of Prices of Wage-Goods - Weighted (1873-74 = 100) 18. General Deflator (1948-49= 100) 19. The Price Index of Agricultural Products - Weighted (1873-74 = 100) 20. Price Index of Non-agricultural Products - Weighted (1873-74 = 100) 21. Index of Internal Terms of Trade

III. Trade &Related Matters 22. 23. 24. 2S. 26. 27. 28. 29. 30. 31. 32. 33. 34. 3S. 36. 37.

Merchandise Exports (Rs. Crs) Merchandise Imports (Rs. Crs) Net Exports (Rs. Crs.) Note the upward trend in 1872-73 to 1892-93 Real Merchandise Exports (index 73-74=100) Real Merchandise Imports (index 73-74= 100) Merchandise Exports in Sterling (Million Pounds) Merchandise Imports in Sterling (Million Pounds) Ratio of Exports to Imports Ratio of Exports to Income Ratio of Imports to Income Ratio of Net Exports to Income Ratio of Treasure Imports to Income Net Terms of Trade in Treasure London Gold-Silver Price Ratio (Note the upward trend in all the periods) London Silver Price (Note the falling trends in all the periods) Index ofIndian Price of Silver (Note that the Indian price was constant till 1893 June, thereafter the silver rupee was delinked from silver price, which started falling more steeply.) 38. Exchange Rate of Rupee in terms of British Pence (Note the generally falling trend in all the periods, but in the fourth period, the rate starts moving up to sixteen pence per rupee). 39. Index of External Terms of Trade (Broadly, the trends have been upward).

IV. Silver Rupees, Money & Interest 40. 41. 42. 43. 44. 4S.

Silver Imports (Rs. Crs) Silver Rupees Minted (Rs. Crs) Accumulated Stock of Silver Rupees Minted (Rs. Crs) Trend of Silver coins Stock (Rs.Crs) Silver Rupees in Treasury Balances and Paper Currency Reserves (Rs. Crs) Silver Coins in Circulation with the Public in the sub-continent (Rs. Crs)

148

46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58.

Money, Income, Prices in 19th Century India

Note Issues (Rs. Crs) Demand Deposits with Banks (Rs. Crs) Total Deposits with Banks (Rs. Crs.) Money Stock with the Public (MIS) (Rs. Crs) Money Stock with the Public (MIA) (Rs. Crs) Velocity of MIS Velocity of MIA Velocity of Silver Coins Time Deposits with Banks (Rs. Crs) M3 (Rs. Crs) High Powered Money (Rs. Crs ) Long-term Interest Rate (Note the falling trend which is however not significant). Short-term Interest Rate (again the falling trend is not significant)

V Public Finances and Drain Measures 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71.

Government Current Revenue (Rs. Crs) Government Current Expenditure (Rs. Crs) Revenue Surpluses / Deficits (Note the sequences of surpluses and deficits. Ratio of Government Revenue to Income (The trend is upward.) Ratio of Government Expenditure to Income (The trend is upward.) Total Tax Revenue(Rs. Crs) (Trend is upward.) Total Land Revenue. Tax Revenue from Salt. Ratio of Land Revenue to Income (The trend is downward.) Total Remittances to UK (The trend is upward.) Council bills issued in UK (The trend is upward.) Vakil's Measure of Home Charges (The trend is upward.) Ratio ofC.N.Vakil's Home Charges to Income (The trend is upward.)

Time Series of Macro Economic Variable

149

1. FOUR PERIOD TRENDS OF UIPOPLN 1861·1900

1872·1893

~,-------------------------~ 294 expo. % grate =0 422 -

295,----------------------------, expo % grate = 0 562290

288

285

282

280

276

275

270

270

264

265

258

260

2~4-,847~2-,~8~75~1~87~8~.~I+88~I~I&M~c,~88~7~18~~TO,~8~~ 265.6

264.0

expo.

/"'

% grate = 0.340 -

1893·1900 expo. % grate =0.110-

295.25

262.4

f the Government of India. Though the Government of India would communicate its views, often strongly, to London, the approach to policy in India was decided in terms of the perception and interests of the British Government. In the following Tables (Table 20.6, 20.7, 20.8 and 20.9), we reproduce some of the results of price determination regressions with 'different sets of explanatory variables. Table 20.6: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW PERIOD 1861-62 TO 1899-1900 Equation

5

9

10

304

4.33"

537"

16.49"

16.37"

24.27"

2361"

4 26"

1270"

1332"

RNDPUI48

·003

006

-0.03

-109"

-I 08"

-221"

-2 15"

-031

-120"

-110"

0.38"

0.38'

050"

038'

038'

097"

097"

0.62"

045"

043"

0.006

-0.30'

-0.04

-0.04

0.50"

049"

005

-047"

-0.37'

-0.45"

-0.45"

-0.21'

-022'

-0.36"

067'

0.55"

055"

0.35'

0.35'

-0.72"

-073"

-0.54'

-0.57"

0.01

-0.06

MIAAB

1

RNFX93 RNFX93-1

2

7

4

CONSTANT

PEX

3

XDR PUK

6

-1.04"

IPSILX

8

0.57"

062"

055"

057*'

056"

-1.03"

GXTSLX NETEXPORTS RECNYHC SINTIND

'R2

032

067

0.56

0.71

0.7

0.83

084

044

0.71

0.76

D.W

129

079

037

127

1.55

1.55

184

185

1.02

1.65

No.ofObs

39

38

31

37

37

37

37

37

37

37

D.O.F

36

33

31

30

29

28

29

33

32

30

Table 20.6: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW PERIOD 1861·62 TO 1899-1900 (continued) Equation

11

12

13

14

CONSTANT

13.5S**

10.79**

9.13'

3.94*

RNDPUI48

-1.15*'

-0.S2'

-0.72

-0.36

MIAAB

0.43**

0.51*'

0.53"

0.71**

0.51**

0.06

0.02

0,009

RNFX93-1

-0.36**

-0.34**

-0.33**

PEX

0.56**

0.49*-

0.51**

RNFX93

XDR

15

16

17

18

19

1404**

13.34**

16.24*"

11.72**

9.35*

16.47**

-1.17"*

-104**

-1.0S**

-0.61

-0.43

-1.09**

0.49**

0.40'

0.56*'

0.62**

0.3S"

-0.11

0.52**

20

-0.03

-0,05

-0.06

-0,04

-0.4**

-0.39**

-0.3S*'

-0.45**

0.57**

0.62*-

0.55**

0.37**

0.3S*"

0.56**

-0.64*"

-0.59**

-0.71 **

-0.6S**

-0.77'"

-0.72'"

Money, Income, Prices in 19th Century India

394

Table 20.6: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW PERIOD 1861-62 TO 1899-1900 (Concluded) Equation

11

12

13

PUK

14

15

16

17

18

0.14

19

20

0.19

IPSILX GXTSLX NETEXPORTS

0.56**

0.50**

0.03

RECNVHC

0.55**

0.02

0.02

-0.11

-0.10

SINTIND

0.008

0.12

-0.24**

-0.25**

0.06

0.05

0.01

0.02

0.03

0.48

0.6

0.59

0.7

0.77

0.77

0.7

0.92

1.5

1.67

1.49

1.41

1.49

1.54

37

37

37

37

37

37

37

37

27

32

31

30

29

28

27

29

R**SQR

0.76

0.77

0.76

D.w

1.27

1.19

1.24

No.ofObs

37

37

D.OF

29

28

Table 20.7: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW PERIOD 1871-72 TO 1899-1900 (Continued)

CONSTANT

1

2

3

4

5

6

7

8

9

10

1.38

3.4

4.52*

14.19**

11.28**

22.99**

24.19**

2.57

13.65**

13.32**

RNDPUI48

0.009

0.05

-0.009

-0.91*

-0.68

-2.30**

-2.40**

-0.15

-1.35**

-1.16**

MIAAB

0.63*

0.72**

0.68**

0.53**

0.59**

1.37**

1.36**

0.67*

0.52**

0.58!*

0.02

-0.30

-0.08

-0.10

0.51 **

0.52**

-0.002

-0.66**

-0.43*

-0.48**

-0.49**

-0.27**

-026**

-0.37**

0.66**

0.58**

0.60**

0.39**

0.38**

-0.62**

-0.74**

-0.50**

-0.45**

0.25

0.09

RNFX93 RNFX93-J PEX XDR PUK IPSILX

-1.16**

0.58**

0.71 **

063-**

0.59**

0.52**

-1.18**

GXTSLX NETEXPRTS RECNVHC SINTIND R**SQR

0.31

0.46

0.64

0.75

0.76

0.92

0.93

0.49

0.75

0.79

D.W

0.73

0.67

1.05

1.43

1.62

2.34

2.31

0.85

1.22

0.98

No.ofObs

29

29

29

29

29

29

29

29

29

29

DO.F

26

24

23

22

21

20

21

25

24

22

Determinants of Price Level An Econometric Analysis

395

Table 20.7: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW PERIOD 1871-72 TO 1899-1900 (Concluded 11

12

CONSTANT

13.93**

12.30**

10.34*

2.96

RNOPUI48

-1.23**

-1.03*

-0.94**

-0.31

MIAAB

0.53*

0.58**

0.62**

0.83**

0.54-

RNFX93

-0.001

-0.02

-003

RNFX93-1

-0.35*

-0.33*

-0.34*

PEX

0.67**

0.61 **

0.66**

13

14

16

17

18

19

20

13.35** 12.12**

14.20--

11.33-*

9.10*

12.63**

-1.11 **

-0.88*

-091 *

-0.57

-0.42

-0.72

0.53*

0.53-

0.67**

0.73**

0.54**

-0.22

0.54**

XOR PUK

15

-008

-0.09

-0.10

-0.09

-0.48**

-0.37*

-038*

-0.49-*

0.61**

072**

058**

0.37*

0.38*

0.53**

-065*-

-0.54*

-0.62*-

-070*-

-0.77**

-0.57--

019

019

IPSILX GXTSLX NETEXPRTS

0.53*0.05

RECNVHC

0.52**

0.58*-

0.04

0.04

-0.12

-0.06

SINTINO

-0.06 -0.38*

-0.36-

0.12

0.05

004

-0.0006

0.03

005

0.78

0.52

0.65

0.66

0.74

0.79

079

0.75

1.03

0.71

1.31

1.64

1.43

124

13

1.24

27

29

29

29

29

29

29

29

29

20

19

24

23

22

21

20

19

21

R**SQR

079

0.78

ow

0.98

1.02

No.ofObs

29

OOF

21

Table 20.8: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW, PERIOD 1861-62 TO 1892-1893 1

2

3

4

5

6

7

8

9

10

CONSTANT

7.70*-

11.25*-

11.65-*

18.90**

20.11 **

20.12**

18.89*-

10.02**

11.15**

13.55**

RNOPUI48

-0.66*

-1.67*-

-1.52**

-2.03**

-2.12**

-2.12**

-2.03**

-1.17**

-1.25**

-1.58**

0.53**

1.03**

1.08**

0.90**

0.88**

0.88*-

0.90**

0.93**

0.86**

0.91 *-

MIAAB RNFX93 RNFX93-1

0.72**

0.36

0.42*

0.42*

0.42-

0.42

0.32

-0 13

-0.21

-0.29*

-0.30*

-0.30*

-0.29*

-0.28

0.45**

0.42**

0.40*-

0.40*-

042*-

-058*

-0.51

-0.51

-0.58

-0.12

-0.12

PEX XOR PUK IPSILX

0

059-*

0.59**

0.45--

0.13

0.22

0

GXTSLX NETEXPRTS RECNVHC SINTINO R*·SQR

0.37

0.56

074

077

076

0.76

0.77

067

0.66

0.75

ow

1.02

097

1.66

1.76

172

1.72

1.76

217

2.15

1.53

No.ofObs

32

31

30

30

30

30

30

30

30

30

O.O.F

29

26

24

23

22

22

23

26

25

23

Money, Income, Prices in ·19th Century India

396

Table 20.8: RESULT OF REGRESSION EXERCISE - DEPENDENT VARIABLE: PINDXW, PERIOD 1861-62 TO 1892-1893 (Concluded) 11

12

13

14

15

16

17

18

19

20

CONSTANT

14.12**

11.25**

12.19**

9.78**

10.96*

16.75**

20.03**

17.21**

18.15**

19.67**

RNDPUI48

-1.68**

-1.28*

-1.36*

-1.15**

-1.23**

-2.23**

-2.10**

-1.62**

-1.70**

-2.25**

MIAAB

0.93**

0.95**

0.95**

0.94**

0.90**

1.13**

0.86**

0.84**

0.82**

1.00 ....

RNFX93

0.36

0.24

0.25

RNFX93-1

-0.28

-0.28

-0.29

PEX

0.44"*

0.40*"

0.39**

0.59"*

0.59**

XDR PUK

0.42

0.27

0.28

0.49*

-0.31 *

-0.33*

-0.34**

-0.26 0.41 ** -0.56

0.59"*

0.38**

0.42**

0.35**

0.34 ....

-0.09

-0.39

-0.66

-0.69*

-0.68

-0.06

-0.05

IPSILX GXTSLX

0.24

0.18

0.15

NETEXPRTS

0.04

0.02

0.02

-0.10

-0.09 0.02

0.02

0.007

0.75

0.75

0.74

0.66

0.65

0.72

D.W

1.5

1.52

1.51

2.08

2.13

No.ofObs

30

30

30

30

D.O.F

22

21

20

25

RECNVHC SINTIND R**SQR

0.04 -0.14"

-0.14

-0.02

-0.02

-0.03

0.76

0.79

0.78

0.76

191

1.86

1.89

1.9

2.09

30

30

30

30

30

30

24

23

22

21

20

22

Table 20.9: RESULT OF REGRESSION EXERCISE -DEPENDENT VARIABLE: PINDXW PERIOD 1861-62 TO 1892-1893 I

2

4

5

14.72**

15.41**

15.87**

15.87**

15.41**

-2.14"*

-2.18 ....

-2.22**

-2.22**

-2.18**

1.57**

1.54"*

1.54"*

1.54**

1.54**

1.26**

1.28**

0.82**

0.47**

0.47**

0.47**

0.47**

0.47**

-0.37*

-0.36**

-0.37**

-0.37**

-0.37**

-0.37*·

0.42**

0.42**

0.42**

0.42**

0.42**

-0.06

-0.04

-0.04

-0.06

-0.04

-0.04

CONSTANT

11.66**

16.41 **

RNDPUI48

-1.64**

-2.69**

MIAAB

1.42"*

1.89**

RNFX93 RNFX93-1 PEX

3

XDR PUK IPSILX

6

0

7

8

9

10

11.63**

11.31**

15.03"*

-1.55**

-1.52**

2.15*· 1.54** 0.46** -0.37*·

0.63**

0.63**

0.43**

-0.03

0.03

0

GXTSLX NETEXPRTS RECNVHC SINTIND R"SQR

0.55

0.84

0.94

0.93

0.93

0.93

0.93

0.82

0.81

0.93

D.W

1.68

1.67

2.37

2.46

2.45

2.45

2.45

2.54

2.57

2.35

No.ofObs

22

22

22

22

22

22

22

22

22

22

D.O.F

19

17

16

15

14

14

15

18

17

15

397

Determinants of Price Level An Econometric Analysis

Table 20.9: RESULT OF REGRESSION EXERCISE -DEPENDENT VARlABLE: PINDXW PERIOD 1861-62 TO 1892-1893 (Concluded) 11

12

13

14

16

15

17

18

19

20

CONSTANT

14.05**

14.01**

14.25**

11.59**

7.55

11.78**

14.35**

14.14**

14.57**

15.14**

RNDPUI48

-2.07**

-2.07"

-2.08**

-1.55** -135**

-2.29**

-2.\3**

-2.05*·

2.07**

-2.14**

MIAAB

1.61 **

1.60"

1.60**

1.28** 1.49**

1.82**

1.60**

1.57**

1.56**

1.54**

RNFX93

0.49**

0.48*·

0.48**

0.60**

0.47··

0.43*

0.43*

0.46*·

-0.37**

-0.37**

-0.37**

-0.35·*

-0.36*·

-0.37**

-0.37*-

0.39**

0.39*'

0.39**

0.42"

0.40**

0.40"

0.41 **

RNFX93-1 PEX

0.63'· 0.61 *-

0.42'·

0.37

0.23

XDR PUK

0.03

0003

-0.02

0.002

-0.05

-0.03

IPSILX GXTSLX

-0.02

NETXPRTS

-0.04

RECNYHC

-0.02

-0.03

-0.04

-0.04

-0.003

-0.009

SINTIND

-0.009 -0.04

-0.04

0.02

0.56

0.05

0.02

0.02

002

R**SQR

0.93

0.93

0.92

0.81

0.8

0.88

0.93

0.92

0.92

0.93

D.W

2.51

2.5

2.5

242

2.23

2.45

2.34

2.31

2.31

2.41

No.ofObs

22

22

22

22

22

22

22

22

22

22

DO.F

14

13

12

17

16

15

14

13

12

14

III. Price Level Determinants Analysed Through The Fisherlne Approach The equation of exchange of Irving Fisher can be econometrically represented as: P=bo+b 1M+b2Y+b3Vp+u ............... (1) where P refers to the general price index, M refers to narrow money, Y refers to real output or net domestic product and V refers to income velocity of money: bo is the constant term, u is the error term and b l • b2 etc., refer to regression coefficients of the specific independent variables. V in the original famous equation of Fischer is a catchall containing within itself the influence of a number of expectation variables. We follow the procedure of obtaining a second stage V, termed Vp by regressing observed V upon the relevant expectation variables. Vp series are the projected values of V obtained from the regression exercise. The relevant variables which we have taken into account as independent variables affecting V are: the price expectation variable PEX, derived in the same way as was done for the above exercise, the exchange rate expectation variable, EXDR is derived in the same method as used for PEX, the expectation variable for rainfall index RNFX, the expectation variable of the London Silver Price Index, derived in the same manner as above, XLSP, the index of the Indian Price of Silver, IPSLX, and the short term interest rate, SINTIND. The regression results on the log form for the four periods are given below:

Money, Income, Prices in 19th Century India

398

Period 1861·62 To 1899·1900: LV = 5.54+ 0.50LPEX - 0.14LEXOR - 0.17LXRNFX**

**

*

..

0.19LXLSP - 0.83L1PSLX - 0.01 LSINTINO -2

R = 0.76 OW = 1.91 Period 1871·72 To 1899·1900: LV = 5.81+ 0.50LPEX - 0.30LEXOR - 0.14LRNFX~

~

.

..

0.14LXLSP - 0.89L1PSLX - 0.03LSINTINO -2

R

= 0.83

OW

= 1.60

Period 1861·62 To 1892·93: LV = 1.72+0.48LPEX+0.12LEXOR-0.18LRNFX **

**

*

..

- 0.13LXLSP + 0.01L1PSLX - 0.02LSINTINO -2

R = 0.41

OW = 2.01

Period 1871·72 To 1892·93: LV = 1.71+ 0.48LPEX-0.22LEXOR-0.14 **

**

'*

..

- 0.07LXLSP + 0.01L1PSLX - 0.05LSINTINO -2

R

= 0.50

OW

= 1.37

The explained proportions (R 2) are reasonable. D-W values do not indicate presence of autocorrelation in the stochastic error terms. The attached graphs depict the actual and projected courses of velocity for the four periods. We have obtained the projected values of V termed as Vp. We now introduce Vp in equation 1. The results of the regression exercises are given below: Period 1861·62 To 1899·1900: LP

= 8.05+ 1.10 LM1A **

**

R2

= 0.83

OW

-1.29 LV + 1.28 LV p **

**

= 2.18

Money has a positive effect on the price level, the elasticity being equal to plus unity. Real Income has a negative effect on the price level, the elasticity being slightly higher than minus unity. Projected velocity has a more than unity plus effect on the price level. The important fact to be noted is that in the above form the Fisherine equation is fully vindicated. The R bar square values are high D-W is satisfactory . Period 1871·72 To 1899·1900: LP = 8.14+1.15LM1A -1.33LV +1.30LV p **

R2

**

= 0.88

**

OW

**

= 1.77

Money has a positive effect on the price level, the elasticity being slightly above unity. Real Income has a negative effect on the price level, the elasticity being 1/3rd

Determinants of Price Level An Econometric Analysis

399

more than unity. Projected Velocity has a positive effect on the price level, the elasticity being 30% more than unity. The explained portions are high and D-W is satisfactory .

Period 1861·62 To 1892·93: LP = 7.88+ 1.16 LM1A -1.28 LV + 1.43 LVp *. -2

*.

*.

R = 0.81

*.

OW = 2.46

Money has a positive and unity elastic effect on price level. Real Income has a more than unity negative effect on the price level. Projected Velocity has about 40% plus unity effect on the price level. The explained portions are high and D-W is satisfactory .

Period 1871·72 To 1892·93: LP

= 8.09+ 1.07LM1A -1.33 LV + 1.56 LVp *. *. *. *. -2

R = 0.89

OW

=1.91

Money has positive effect of about unity elasticity on the price level. Real Income has a negative effect on the price level, the elasticity being one third more than unity. Vp has a positive effect on the price level with elasticity being 1.56. It may be noticed that the autocorrelation problem.

"R2

values are high and D-W values do not indicate any

The attached graphs portray the actual and projected courses of the price level as per the tested Fisher equation for the four periods.

Projected Velocity Ind.var.= PEX XEXDR XRFX XRSH IPSILX XLSP

1861.1900

2.1

1861·1893 21

2.0

2.0

1.9

1.9

18

1.8

1.7

17 /

16

16 1.5

.L...,...........~.....-I-,~l.-........4,,--':~-4-.-.........J-.-,..,..,.--J

15.L...,~~~~~~-h~~~~~

1861

1861 1866 1871 18761881 1886 1891 1896

1866 1871

1876 1881

1886 1891

1871·1893

2.08 , -_ _-'1::..::8e.-'.7~1~.1'_='9..::.0=_0_ __:_:______,

1.820 , . . - - - - - . . , . - - - - - - - - - - ,

2.00

1.785

1.92

1.750 1715

1.84

1680

1.76

1.645

1.88

1.610

1.60

1.575

1.52 .L...Jh.....-~~~±".,-:-!::::-'"7:b~c:7.:::-'

1~0~~_4~~~~~4-~~~

1871

1875

1879

1883

1887

1891

Money, Income, Prices in 19th Century India

400

Price Behaviour as per Fisherine 1861·1900

Ind.var.= Y, MIA, PROJ VEL

5.04 , . . . - - - - - - - - - - . - - - ,

4.96

496

1861·1893

488

4.88

4.80

480 472

472

484

4.84 4.56

4.56

4.48 .........'"'-........--'-~........._'_'_O"_~f.,.,_..,..........,.....J 1861 1867 1873 1879 1885 1891 1897

448

,..--_--=-18""'7""1'-'·1..,,9=0,> (9

1876

·1900

54

0

-l 52 50 48 46

44

1861

1866

PROJECTED AND ACTUALS

We now examine the relation between high-powered money (HM) and ratio to cash to deposits (CASH _DEP). Period: 1870-71 To 1899-1900

..

.

LM1S = -0.36+1.09LHM-0.02LCASH-DEP -2

R = 0.98 DW = 0.61 LM1S = -0.34+1.11LHM-0.02LCASH-DEP

..

-2

.

R = 0.95 DW = 0.69 A 10 per cent increase in HM leads to about 10.9 to 11 per cent increase in M1 SI M1A. A rise in the deposits to cash (DEP_CASH) ratio has a small decrease effect on M1S/ M1A. But it is significant only in the case of MIS. High-powered money changes have a similar effect on M1S1 M1A. The role of the cash ratio to deposits is not important in the period under study. Please see graphs of actual and projected values of the money magnitudes.

Money, Income, Prices in 19th Century India

446

DETERMINATION OF SUPPLY OF MONEY (M1NS, Ind.var.=HM, CASH_DEPT

M1S Period = 1871·72 TO 1899 1900 530 525 520

V

515

,

510

~

505 500 495 (/)

W

:::J

490 485

~

I 18 9

.....J

« >

(!)

0

.....J

I

3

M1A Period = 1871·72 TO 1899·1900

540 535 530

...,,

525 520

,

/,

."

5 15 5 10

,,

5 05 I

5 00 4 95

PROJECTED AND ACTUALS

Beyond Conventional Regressions In this Chapter, the supply of SILRUP, the chief component of money during this period, has been sought to be determined by a number of variables, like, aggregate trade, exchange rate, net exports, London Gold Silver ratio, C.N. Vakil's measure of home charges etc .. We obtained the Dickey-Fuller test values for the levels as well as the first differences. The following gives the values ofDF test statistics. Table 22.4: Dicky-Fuller Statistics DF DF

DF

with trend

with out trend

SILRUP TEXP LG S

-3.73

-3.97

-9.89

-1.19

-2.84

-6.20

1.08

-1.09

-5.08

CNVHC

-1.19

-3.32

-7.45

EXDR AGTR

-1.8\

-2.16

-5.\3

-1.07

-2.29

-6.5\

Variables

for first diffs·

The OF statistic of the levels showed non-stationarity for all of the variables and those of first differences showed stationarity. This means that all the variables are the processes of integrated of order one. There exists a case for examining for the existence of co-integration among the variables. As a

The Supply of Money

447

preliminary effort, we applied Engel-Granger method of regressing SILRUP over rest of the variables considered. The residuals are observed to be stationary (the DF statistic was -4.55), indicating that the linear combination of the variables is stationary. Further, the existence of co-integration allows for representing the supply of money in terms of error correction model. Abstracting from going into more details of error correction modelling, we may state that the existence of co-integration among the variables suggests that there is a long-term relation among them, which one can call as 'equilibrium relation'. In such circumstances, the conventional regression analysis that was followed earlier in this Chapter is a valid exercise, in as much as there may not be any spurious relations emerging there.

Chapter 23

INTEREST RATE AND ITS DETERMINATION Introduction In this Chapter, we inquire into the course of the short tenn and the long tenn interest rates in India, their trends, their relation with the U.K interest rates and the factors detennining the Indian rates. The short tenn rate was periodically announced by the Presidency Banks, specially the Bank of Bengal. The long tenn rates are the yields on the Government of India securities as obtainable from the Banking and Monetary Statistics and Government of India's statistical data. Infonnation from the Herschell Report is also taken. Monetary theory has some hypothesis about the factors detennining the rates. We do not get adequate data for the supply of and the demand for loanable funds. We have to use proxies for the same. Gibson noted that contrary to theory according to which interest rates and prices should have a negative relation between the two, in actual practice, the two had a positive relation. This is known as the Gibson paradox. Traditional theory of tenn structure hypothesizes that generally the long tenn rate is above the short tenn rate. But in India the experience has been the other way round. This is known as the Muranjan paradox. In growth theory interest and the growth are supposed to be positively related. We examine some of the above hypotheses.

Data We have infonnation about the Short tenn interest rate in India for the whole period. This is the average of the two six-monthly averages of Bank rates of Presidency Banks. The infonnation on the long tenn rate is available only from 1864 onwards. The infonnation on short tenn interest rate in the UK, as also the long tenn rate therein is taken from the Friedman- Schwartz study. The infonnation here is only from 1873-74 onwards. We give below in Table 23.1 the four time-series and means of a number of periods. The trends of the four interest rates are given Table 23.2. We have also attached a graph depicting the course of the Indian Short tenn and Long tenn rates along with trends. Table 23.1: Rates in India and in U.K

Year

(1) 1861-62 1862 1863 1864 1865-66 1866 1867

Long Term Interest Rate in India (percent) LINTIND

Short Term Interest Rate in India (percent) SINTIND

Long Term Interest Rate in UK (percent) UKSINT

Short Term Interest Rate in UK (per cent) UKLINT

(2)

(3) 4.1 5.1 5.5 8.6 7 9.1 5

(4)

(5)

3.54 3.64 3.73 3.67

449

Interest Rate & its Determination

Table 23.1: Rates in India and in U.K (Concluded)

Year

(I)

1868 1869 1870-71 1871 '1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

Long Term Interest Rate in India (percent) LINTIND (2) 3.64 3.61 3.7 3.7 3.73 3.86 3.93 3.91 3.95 4.17 4.20 4.30 4.15 3.91 4.04 4.02 4.09 4.19 4.1 4.11 4.04 4.04 4 3.78 3.76 3.53 3.26 3.28 3.56 3.69 3.55 3.66

Short Term Interest Rate in India (percent) SINTIND (3) 6 6 5.7 4.7 5 3.9 6.2 5.7 6.7 8.4 5.4 6.4 4.6 5.3 6.6 6.8 6.4 5.4 6 5.6 5.5 7 5.8 3.1 3.5 4.9 5.3 4.3 5.7 7.9 8 5.9

Long Term Interest Rate in UK (percent) UKLINT (4)

Short Term Interest Rate in UK (per cent) UKSINT (5)

4.7 3.56 3.14 2.26 2.62 3.59 2.14 2.53 3.05 3.55 3.22 2.57 2.4 2.33 2.65 2.53 2.85 2.88 2.77 1.76 2.32 1.18 0.96 1.56 1.92 2.62 3.35

3.24 3.24 3.2 3.16 3.15 3.15 3.08 3.05 3 2.99 2.97 2.97 3.02 2.98 2.95 2.97 2.81 2.67 2.7 2.65 2.61 3.52 2.39 2.28 2.25 2.28 2.36

Table 23.2 PERIOD-WISE AVERAGES AND TRENDS

Penod

Avg (1861-62 to 1899-00 ) Avg(1861-62 to 1871-72) Avg(l871-72 to 1892-93) A vg(l893-94 to 1899-00) Avg(l873-74 to 1899-1900) Avg(l873-74 to 1892-93) Exp Gr (1873-74 to 1899-1900) Highest

Long Term Interest Rate in India (percent) LINTIND

Short Term Interest Rate in India (percent) SINTIND

3.83 3.65 3.98 3.50 3.89 4.00 -0.61 4.3 (1879)

5.85 6.07 5.60 6.18 5.79 5.68 -0.16 9.1 (1865)

Long Term Interest Rate in UK (percent) UKLINT (4) 2.63

Short Term Interest Rate in UK (percent) UKSINT (5) 2.88

2.83 1.93 2.63 2.83 -2.34 4.7 (1873)

2.98 2.51 2.88 2.98 -1.24 3.52 (1894)

Money, Income, Prices in 19th Century India

450

Short-term Interest Rate and Long-term Interest Rate 2.25

2.00

1.75

1.50

1.25

1.00

1861

1866

1871

1876

expo.

% g rate of lintind

expo.

% g rate of sintind = ·0.168 ns

1881

1886

1891

1896

= ·0.069 ns

The short term interest rate in India was high during the middle of the sixties. It would appear that despite large silver imports and large mintage of silver rupees, the cotton boom and its aftermath had boosted the short term rate. It reached the highest level for the entire period of 9.1 per cent in 1866. The rate started coming down thereafter, but sharply moved up again, during 1875-77. It started falling thereafter and came down to 3.1 per cent in 1891. It sharply moved up again during 1897-98. The general trend was negative at -0.16 % for the whole period. The long term interest rate in India hovered between 3.5 to 4 per cent from 1864 to 1876. Thereafter it ranged at around 4 per cent till 1891, the highest being in 4.3 % in 1879. The average of the short term interest rate for the whole period was 5.85 per cent, whereas that of the long term rate was 3.83 per cent. Throughout the period in each of the years, the short term rate was higher than the long term rate generally by more than 2 percentage points. This was in quite contrast to the term-structure in the UK, where for most of the years the long term rate was slightly higher than the short term rate. The average of the latter was 2.88 per cent whereas the average of the former was 2.63 per cent. The UK rates both short term and long term also manifested falling trends. Interestingly the trend rates of decline were higher in the UK than in India. In general Indian short term and long term rates were higher than the UK short term and long term rates. The coefficients of the variation of the UK rates, however, were

Interest Rate & its Determination

451

higher than of the Indian rates. This was probably due to greater exposure to business cycles of the UK economy than ofthe then Indian economy. The gap between the short term and the long term was higher for the Indian rates than for the UK rates. Dr.S.K.Muranjan in his Modern Banking in India had noted that during the period from the beginning of the twentieth century to the second war period the Indian short term rates ware always higher than the Indian long term rates. He termed this as a paradox since this pattern of the term structure of the rates was different from that observed in the developed countries generally. In Indian monetary literature this is known as the Muranjan Paradox. In fact, the same pattern of behaviour was obtained in the post-independent India till about the middle of the 1990s. One explanation of the paradox is the separation of the markets for the short term funds and for the long term funds. The two have been insufficiently integrated. A second explanation is that people may expect higher inflation rates in the future than in the current period. A third explanation is that there is generally pessimism about the long term future as compared to the short term future. Probably there is a sort of a barrier between the short and the long. The Indian money markets during the period of our study had no elasticity in the supply of loanable funds. The credit portfolio of banks was thin. The ratio of reserves to deposits was quite high, as there was no scope for the lender of the last resort function. The Presidency Banks did not function as a Central Bank. The Government's cash balances were mostly kept idle during the lean seasons. During the post-mints-closure period, money was very tight, as there was no fresh issue of silver rupees and there was no scope for dishoarding of hoarded silver rupees. It does not appear that much hoarding of silver rupees was taking place. Determination of Interest Rates: Short Term Rate Generally there are numerous factors affecting interest rates. We first take up the short term rate. Among the factors we may mention 1. The level of prices - the higher the level of prices, the higher the short term rate should be and lower the level the lower the rate. 2. Tax revenues. 3. The index of rainfall: weather conditions are better, the interest rate should be generally lower. If conditions are adverse interest rate should be higher. 4. Merchandise exports. This should have a positive effect on the interest rates. 5. The level of real income, especially that in agriculture. The higher the level of real income/ agricultural income the higher should be the rates, the lower the level the lower the rate. 6. Money: the larger the supply of money, the lower should be the rates and the opposite also. 7. The percentage change in the real income over the previous year. 8. Percentage change in the exchange rate over the previous year. 9. the UK short term rate. The results of the regressions are given in Table 23.3.

Money, Income, Prices in 19th Century India

452

TABLE 23.3: DETERMINATION OF SHORT TERM INTEREST RATE Year

Constant

18731899 18731892

12.15

006

14.44

0.07

7.72

0.03

16811899

.. ..

Y_% CHA NG

EXDR_ %CHN

'()OB

-9.1

0.007

.().09

.

.().07

..

PWGX

TTR

RNFX

MEREXP

..

.().5

..

.().03

0.15

0006

..

.

.().05

.().04

018

'().21

0.00

0.05

0005

.. .

.. ..

RYAG

M1A

.. .

UKSINT

R"2

9.48

'().41

0.68

2.11

-5.39

14.32

.().90

..

0.85

2.45

-11.1

6.45

0.17

0.80

279

. .. .

DW

We find that the income growth rate factor is not significant in any of the periods. The UK short term interest rate has a highly significant effect and in a negative direction only during 1873-92. The rainfall factor is not significant in any period contrary to the impression, which was prevalent. Tax revenue factor is not significant in the period 1881-1900. It is significant in the other periods with a negative sign. The higher the tax revenues the lower the short term rate. Merchandise exports are significant and highly in the first two periods and with a positive sign. Agricultural income is significant only if). the first and the last periods and with a positive sign. But the factors significant in all the periods and highly so are the level of prices of wage goods highly significant and with a positive effect; MIA - highly significant with a negative sign. The exchange rate is significant and with a positive effect. We notice that the explained portions are quite high for this variable, which is rather elusive. The DW statistics are also in the satisfactory range. We may conclude that the higher the level of prices, the higher the short term rate of interest; the lower the level of prices the lower the short term rate of interest. The larger the volume of money, the lower the short term rate and the smaller the volume of money, the higher the short term rate of interest. We can understand why after the closure of mints the pressure on the demand for funds tended to move up the short term rate. The higher the exchange rate, the higher the short term interest rate, the lower the exchange rate, the lower the short term interest rate. Rising prices would lead to rising short term interest rates. The Gibson Paradox seems to be corroborated. See the adjoining Graph.

453

Interest Rate & its Determination DETERMINATION OF SHORT·TERM INTEREST RATE Ind.var.=PWGX TTR RNFX MEREXP RYAG M1A Y_CHNG EX_CHNG UKSINT PERIOD = 1871 72 TO 1899 1900

224 208 1 92 1 76 1 60 1 44 1 28

(f)

W

:::J

1 12

...J

1871

«

1875

> 224

(!)

1879

PERIOD

1883

= 1871·72

1887

1891

1895

1899

1886

1889

1892

TO 1891·1892

0

...J

208 1 92

.............

1 76 1 60 1 44 1 28 1 12

1871

1874

1877

1880

1883

PROJECTED AND ACTUALS

Determination of the Long Term Interest Rate The independent variables chosen are 1. Regression-derived five years' sequential growth rate of manufacturing and mining index, 2. Regression derived sequential five years trend in general price level, 3. Regression derived sequential 5 years growth rate in MIA, 4. tax revenues, 5. Moving-average of 5 year's short term rates and, 6. the UK long term rate. In an other set of regression exercises, we have taken 10 years' movingaverage of short term interest rate along with the rest of the variables as above. The results are furnished in Table 23.4 Table 23.4: Regressions the Long Term Rate Year

1873-1899 1873-1892 1881-1899

S/NT_ SAVG

UKLINT

-0.04

017

-0.24

.

0.84

1.69

-0.07

-0.01

0.22

0.09

066

2.21

-004

-0.05

0.09

-0.24

0.81

1.46

MFMX _SGR

PRICE SGR

MIA_5 GR

TTR

5.06

0.04

0.02

-0.02

2.86

0.03

0.03

..

0.04

0.03

Constant

..

5.91

.. .. . . . . ..

. .

R"*SQ

DW

Table 23.4: Regressions the Long Term Rate (continued) Year

1873-1899 1873-1892 1881-1899

MFMX SGR

PRICE SGR

MIA_5 GR

TTR

4.42

0.05

0.05

-0.03

-0.04

0.28

..

-0.27

.

0.81

1.66

1.22

0.05

0.03

-0.01

-

0.11

0.64

0.47

2.01

..

-0.02

0.03

-0.05

.

-0.27

.

0.87

1.55

Constant

..

4.42

.. .. ..

. .. .

0.001

..

-0.05

S/NUO AVG

0.46

UKLINT

R"*SQ

DW

Money, Income, Prices in 19th Century India

454

We do not find any variable having a significant effect in all the three periods. Probably, mining and manufacturing and the ten-year average of short term rates had a positive effect on the long term rate. The ten-year average of short term rate had probably a positive effect on the long term rate. The co-efficient is low. The five-yearly sequential trends in MIA had a mild negative effect on the long term rate. The UK long term rate also probably had a mild negative effect. Tax revenues also had a mild negative effect on the long term rate. The five year sequential trends in price level had a positive effect and only in the first period. The explained portions are high only in the first and the third periods. The DW test is satisfactory in all the cases.

DETERMINATION OF LONG-TERM INTEREST RATE Ind.var.=MFMX5_GR, P5_GR M1A5_GR TTR AVGSINT UKLINT PERIOD = 1872·73 TO 1899·1900 150 :...:

1.45 140 1.35

......••

.......

:

...... ......... .........

".:

................................... :

...........

130

...........

1.25 120 (/)

J.J5

1881

W

1897

1885

:::> -J

«

>

1.46

C)

0

-J

144 1.42

.....................

140 1.38 1.36

............:::

1.34 132

1885

1888

PROJECTED AND ACTUALS

We may draw some tentative conclusions: the growth rate, here as that in mining and manufacturing, tends to have a positive effect on the long term rate; the growth rate of money has a negative effect on the long term rate; the five years/ten years moving averages of short term rates have a weak but positive effect on the long term rate; and the U.K long term rate has a mild negative effect on the Indian long term rate. The five yearly trends sequence in the price level has probably a positive effect on the long term interest rate. The enclosed graphs portray the observed and the projected values for the short term rate for 1871-72 to 1892-93, and the same for the long term rate for the period 1873-74 to 1899-1900.

Interest Rate & its Determination

455

Testing for Unit Roots in the Interest Rate Series It is an interesting proposal to examine the co-movements of the interest rates. Generally, in theory, one expects to see a long term relation between the short term and long term interest rates. In other words, the two variables are expected to be 'cointegrated'. In the following, we try to verify this hypothesis.

For the interest rate variables to be co-integrated, they should possess unit-roots. The DF statistics for the variables are given in Table 23.5 Table 23.5 Dicky-Fuller Statistics DF DF (with Variable (with out trend) trend) 1. SINTIND -4.41 -4.43 2. LINTIND -1.68 -1.59 -3.06 -2.9 3. UKSINT -0.06 -1.74 4. UKLINT

It is interesting to note that the short term interest rate in India is stationary, but the long term interest rate is not. In the case of the UK, both the rates are non-stationary. This implies, probably, that in India, the two markets were not integrated. This supports the hypothesis referred to earlier in this Chapter. In the case of the UK, there is a possibility of co-integration of the rates and of the existence of an eqUilibrium relation between the two.

The residuals of the long term relation between short term and long term interest rates of the UK are found to be stationary (the DF statistic = -5.22) This indicates the existence long-run equilibrium relation between the two variables. The two EngelGranger co integration error correction representations are given below D_UKSINT = -0.039-1.16** e-1 +0.58 D_UKSINT-1 +0.39UKSINT-2 D_UKLINT = -0.013-0.075 nse-1 +0.423 D_UKLINT -0.129 UKLlNT-2

It appears that the first equation has significant error correction coefficient, while the second equation does not have. It should follow from this the UK long term rate is independent of the UK short term rate, while the UK short term rate cannot be said to be independent of the UK long term rate. The causality relation flows from the long term rate to the short term rate. This lends support to the Classical emphasis on the long term determining the short term, contrary to the post-Keynesian emphasis of the short term determining the long term with adjustment for uncertainty.

Chapter 24

THE DETERMINATION OF REAL NDP AND RELATED MATTERS Real Net Domestic Product is probably the most important magnitude in economic analysis. It is the aggregate of the net value added in different sectors. In this Chapter we first take up Sectoral and Aggregate growth rates; thereafter we examine the factors determining real NDP. After that we enquire into the Sources of Growth according to the three agents of production land, labour and capital.

Sectoral Growth Rates We briefly survey below the sectoral growth rates in value added at constant prices in different sectors as well as in Net Domestic Product as a whole. We have taken figures of regression derived trend growth rates during the following three periods. 1. 2. 3.

1861-62 to 1892-1893 1871-72 to 1899-1900 1861-62 to 1899-1900

Besides we have also obtained the regression derived trend growth rated decadewise for the first three decades and for the fourth decade with adjusted time-span. 1861-62 to 1871-72 to 1881-82 to 1889-90 to

1871-1872 1881-1882 1891-1892 1899-1900

I. Agriculture For the period 1861-1892, the trend growth rate was 0.41 % per annum. For the period of 1871-1899, it was 0.45% per annum. For the entire period, it was 0.41% per annum. In the first decade, the growth rate was negative, as also in the second decade. It was in the third decade i.e. 1881-91 that the growth rate was positive at 0.53% per annum. This was the period when the full effect of the falling exchange rate due to the falling gold price of silver seems to have affected agriculture positively. The growth rate of trade specially of exports, most of which were agricultural or agricultural related commodities went up during this period. For the whole period, the elasticities of overall real GDP to real value added in agriculture was 2.17; for the roaring decade of the eighties, the elasticity was 1.81. The growth rate was again negative during 1889-99. The index of trend of rainfall was negative in all the four decades. It would seem that during the period as a whole, the deficient rainfall years exceeded good rainfall years. The above record of growth rate in agriculture refers to our measure I. Our measure II is based on backcasted estimates of food and agricultural production. For the entire period the growth rate in measure II of agriculture was 0.68% per annum. This is higher than that in the first measure. In the decade of the falling exchange rate the growth rate was 0.68% per annum.

The Determination of Real NDP & Related Matters

457

II. Mining and Manufacturing For the whole period, the trend growth rate was 8.74%. For the 1861-92, it was 9.45. It was 7.9% during 1871-99 and during the decade-wise also, during the first decade it was17.01 %; 7.96% in the second decade and 8.24% in the third decade. During the last decade, it came down to 4.39%. The high growth rates in the initial periods was due to low base. There were many factors which helped to obtain the high growth rate in mining and manufacturing during the whole period. The opening of the Suez Canal in 1867 was an important factor, which helped the growth of a number of agriculture processed commodities and minerals. The 60s was the period when foreign capital came in a big way to the economy. And a new number of industries came to be started. The big build up in railway tracks enabled goods to move more rapidly and more of goods to be moved. This helped the expansion of the markets and mining and manufacturing activities expanded. No doubt part of the expansion was at the cost of small scale and cottage industries and handicrafts. Yam imports increased and cloth production got a momentum. The jute industry also got a boost because of the growth of transport and trade. The development of railway transport helped the coal industry. Among the other industries that developed may be mentioned paper, silk and woollen textiles, building materials and breweries.

Ill. Railway Transport During the entire period, railway transport in terms of tons of goods carried grew significantly at about 10 112% per annum. Considerable new track was laid during the whole period. During 1861-92, the trend growth of real value added in railways was 12.2%. It was during 1871-99 about 9.1%. Decadewise, the first decade witnessed a trend growth rate of about 19.81%. In the second decade it was 14.1%. The real value added slowed down to 5.2% in the third decade and was about 6.2% in fourth decade. The low base must be kept in mind in interpreting these figures. For the whole period the elasticity of mining and manufacturing to value added in railways was about 0.70. In the earlier decades, particularly in the second and the third decade, the elasticity was between 1.7 to 1.9%.

IV. Banking The index of real deposits had a trend growth rate of about 4.87% for the whole period. During 61-92, it was 5.2% and during 71-99 it had come down to 4.76%. Decadewise, it was in the first decade that the growth rate was 9.94%. In the second decade it was negative. But it moved to 8.01 in the third decade. But in the fourth decade the trend growth rate was as low as 0.61 %. The 8% growth rate during the period 1881-91 must be accounted by the boost to trade that was obtained by the falling exchange rate and the falling gold price of silver.

V. Trade For the whole period the real value added in trade expanded at the rate of 3.06%. During 1861-92, it was 3.47%. And between 1871-99 it was 3.02%. Decadewise it was 2.6% in the first decade, 3.4% in the second and 2.2% in the third decade. The growth rate was as low as 0.4% per annum in the fourth decade. The closing of the

458

Money, Income, Prices in 19th Century India

mints seems to have had an adverse effect on the trend growth rate of real trade. But for the earlier 3 decades, the growth rate of real trade was well above the growth rate of net real domestic product. VI. Small Industries and Services

For the whole period the trend growth was 0.52%. it was 0.56 in 61-92; 0.51 % in 1871-99. Decadewise, it hovered between 0.54 to 0.58% during the first three decades. But during the last decade, the growth rate was slightly a higher as 0.8%. VII. Animal Husbandry, Forestry and Fishing

The growth rate of animal husbandry for the entire period was about 0.96% per annum. Forests had a good growth rate because of the railway construction and related factors. For the whole period, the growth rate was 1.33%. For fishing the growth rate for the whole period was about 0.66%. VIII. Residual Government

For the whole period, residual Government had a trend growth rate of 1.66%; for 1861-92, it was 1.87% and 1.34% between 1871-99. Decadewise the growth rate was highest during the first decade at 2.56%; during the fourth decade it was 1.4%. During the other two decades it was well below one per cent. The dip in the growth rate during the 2nd and 3rd decade has to be understood in terms of the effect of falling exchange rate of Government finances. IX. Overall Real NDP

For the whole period real NDP in the first measure grew at a trend rate of 0.89%. It was 0.93% during 1861-92; and 0.95% during 1871-99. Decadewise in the first decade, the growth rate was 0.55%; it went up to 0.75% in the second decade and further moved up to 0.96% in the 3rd decade. The upward drift in the growth rate in the second and third decade was directly/indirectly promoted by the growth rate of trend in real trade due to the falling exchange rate. During the last decade the growth rate slumped to 0.35% consequent upon the direct and indirect effect of the closure of mints and a bunch of bad harvests. In measure II the real NDP grew for the whole period at a trend rate of 1.06% per annum. During the first decade it grew at about 0.52% per annum. During the second two decades together the growth rate was 1.23% per annum. For the period 1892-93 to 1899-1900 the growth rate was rather low at 0.61 % per annum. We would like to place the overall growth rate for the whole period at about a minimum of 1% per annum. This would leave a measure of per capita growth rate at about 0.6% per annum. Both rates were the highest during the period of the falling exchange rate under the silver standard, i.e., from 1871-72 to 1892-93. The mean per capita income at current prices in the first measure was Rs. 32.30 per annum. In the second measure it was Rs. 32.56 per annum. The standard deviation in the first measure was Rs. 4.53. In the second measure it was Rs. 5.22. The co-efficient of variation in the first measure was 14.03% and in the second it was 16.00%. These would have been due to the variations in rainfall.

The Determination of Real NDP & Related Matters

459

Determinants of Real Net Domestic Product

Under the conditions prevalent during the period 1860-61 to 1899-1900, treating real NDP as the dependent variable, we have alternative specifications of the function with different combinations of independent variables which may be hypothesised as determining real NDP. The following subsets have taken account in our regression exercises. 1. Gross real capital stock, agricultural land under cultivation and the estimate of work force. 2. The above (1) plus the trend factor. 3. Only gross real capital stock and agricultural land. 4. The above (3) with the trend factor. 5. Gross real capital stock, agricultural land and the measure of home charges as given by C.N.Vakil, and the trend factor. 6. The above (5) plus real balances has derived by dividing money by the general weighted price index. 7. The above (6) plus the index of rainfall. 8. The above (7) plus the exchange rate in terms of pence per rupee. 9. The above (8) the international terms of trade is found by dividing the index of unweighted export prices by the index of unweighted imported prices. We have chosen 5 periods: 1) 1861-62 to 1899-1900,2) 1871-72 to 1899-1900,3) 1861-62 to 1892-1993, 4) 1871-72 to 1892-1993 and 5) 1885-86 to 1899-1900 All the regressions are run in the log transformations of the variables. In Table 24.1, We give the results for the period 1861-62 to 1899-1900. The best regression results for the subsets of the independent variables are 7, 8 and 9. [Capital stock (GKS48), land revenue (LDRX93), Vakil home charges (RECNVHC), Real Balances (REALBAL), rainfall (RNFX), exchange rate (EXDR), terms of trade (TOT), work force (WF). The functions are specified in logarithm values of the variables. In all the specifications the Dependent Variable is taken as real GDP at 1948-49 prices (RGDPIND48). Table 24.1: Determination of Real NDP - 1861-62 TO 1899-1900 SI. No.

Constant

TREND

GKS48

LDRX93

u/WF

0.12

0.56

0.35

I

3.14

**

**

**

2

4.16

0.15

0.66

**

**

**

0.11

0.56

3

3.4

0.0004

RECNVHC REALBAL

KNFX

EXRD

TRSOFTR

0.32

** 4

5.10

0.002

0.Q7

** 5

6.55

** 0.004

-0.13

** 6 7 8 9

0.59

-0.18

0.62

0.09

**

**

0.62

0.08

0.05

7.01

0.006

**

*

8.25

0.01

-0.27

0.33

0.04

0.08

0.19

**

**

**

**

**

**

**

8.43

0.01

-0.31

0.33

0.05

0.08

0.20

**

**

**

**

**

**

**

8.26

0.01

-0.27

0.33

0.04

0.08

0.19

**

**

**

**

*

**

** 0.06 0.0005

"R2

D.W

0.96

0.85

0.96

0.79

0.96

0.85

0.96

0.82

0.96

0.96

0.96

1.15

0.99

1.37

0.99

1.54

0.99

1.37

** For the seventh version of specification, capital stock, RECNVHC, REALBAL and RNFX along with constant term all the dependent variables are highly significant,

Money, Income, Prices in 19th Century India

460

except K all have positive effect on real output. R 2 =0.99, D.W=1.37. For the eighth specification, with GKS48, LDRX48, RCNVHC, REALBAL, RNFX and EXDR along with the constant term all variables except EXDR are highly significant and only GKS48 has a negative sign. R 2 is very high and the D.W. is satisfactory. For the 9th subset with GKS48, LDRX48, RCNVHC, REALBAL, RNFX, EXDR and TOT all the variables other than EXDR and TOT are all highly significant. Effect of capital stock is negative R 2 is very high and the D.W. is satisfactory. It is seen from the results that real capital stock is significant and highly so only when it is coupled with area under cultivation and other variables are excluded. It would also seem that land as representing the area under cultivation is consistently the more highly significant factor. Real balances and rainfall are also highly significant in the subsets 7 to 9. The measure of home charges in real term seems to having a positive effect. The system has to produce more in order to pay for the drain payments. Are capital, land and work-force all involved in production? But, when we remove work-force, we do not find any change in the R 2. This means that workforce, was not a significant factor at the margin in output. The trend factor is highly significant in all the subsets where it is included that is from 3 to 9. The constant term is also highly significant in all the equations.

In Table 24.2, we present the results of regression exercises from 1871-72 to 1899-1900. Here capital stock and agricultural area index are significant in the first two specifications, as also the trend which is significant in third to sixth specification where it is entered. Again work-force is not significant in first and third specifications. In the last three speficiations the area under cultivation, real money balances and rainfall are highly significant, all with positive signs. The trend factor is not significant at all. R 2 has a very high value and the D.W. test is also satisfactory. Table 24.2: Determination of Real NDP -1871-72 TO 1899-1900 Sf. Constanl TREND GKS48 LDRX93 u/WF RECNVHC REALBAL RNFX93 No 1 4.09 0.28 0.49 -0.08

••

••

••

2

3.90

0.26

0.49

3

-3.06

-0.02

1.12

0.63

4

-3.97

-0.02

1.09

0.61

5

-2.52

-0.02

0.89

0.64

0.07

6

-1.54

·0.01

0.79

0.63

0.05

0.03

7

5.31

0.004

0.07

•• 0.35 ••

0.03

0.08

0.16

8

5.40

0.006

0.03

0.34

0.05

0.06

017

9

5.20

0.004

0.09

0.36

003

0.08

••

••

••

••

••

••

•• •• ••

••

••

•• ••

XRD

TRSOFTR

••

••

-0.15

••

••

••

••

•

••

•• ••

••

•• 0.16 ••

0.07 0.008

R2

D.W

0.94

0.79

0.94

0.8

0.96

1.37

0.96

1.33

0.97

1.48

0.97

1.6

0.99

1.78

0.99

1.92

0.99

1.75

In Table 24.3, we present the regression results for the period 1861-62 to 1892-93: Taking seventh, eighth and ninth specifications the variables GKS48, LDRX93 ,

The Determination of Real NDP & Related Matters

461

RVNCHC, REALBAL and RNFX are all highly significant. EXDR and TOT are not significant. GKS48 has a negative sign; all other variables have a positive sign. Eighth and ninth specifications have high R 2 and satisfactory D.W. Taking the first three specifications, GKS48 AND LDRX93 seems to be highly significant with positive signs (capital not significant in third specification). The R 2 is quite high; D.W. test is not satisfactory. The trend element is not satisfactory in third, fourth and fifth specifications and is significant in sixth to ninth specifications. Table 24.3: Determination of Real NDP -1861-62 TO 1892-1893 SI No I

COils/aliI TREND GKS48 LDRX93 u/WF RECNVHC REAL BAL

245

0.10

0.68

..

0.12

0.81

••

••

••

2

3.72

3

8.43

0.01

-0.22

0.64

4

7.33

0.01

..

-0.19

0.61

5

8.38

001

-0.37

069

6

8.44

0.01

-0.38

7

8.82

0.0\

-0.33

••

•• 0.69 •• 0.31 ••

0.01

-0.31

0.31

8

••

•• ••

••

•• 8.78 ••

••

••

•• ••

••

• •

••

••

RNFX XRD

TRSOFTR

0.44

••

••

-0.2

••

0.09

••

0.09

• 0.06 ••

0.06

om 008

021

008

0.21

••

••

-0.02

R2

D.W

0.95

0.94

0.95

0.92

0.96

1.41

0.97

14

0.97

1.72

0.97

1.76

0.99

1.75

0.99

1.8

•• •• •• • •• •• -0.34 0.06 0.006 0.99 1.74 9 8.91 0.01 0.31 0.08 0.21 •• •• •• •• •• Table 24.4 presents the regression results for the period 1871-72 to 1892-93. The last three specifications have high R 2 and also satisfactory D.W. But only real money balances and rainfall are highly significant. The other variables entered are not significant at all in these three subsets. In the first three specifications GKS48, KDRX93 are highly significant and explain 96% of output. The D.W. is not unsatisfactory. But the work force has a negative sign indicating excess population pressure. In the third and the fourth specifications, only area is highly significant.

..

..

Table 24.4: Determination of Real NDP - 1871-72 TO 1892-1893 SI.No I

COils/ant TREND GKS48 LDRX93 u/WF RECNVHC

3.93

2

•• 3.29 ••

3

226

4

0.35

••

0.58

••

REALBAL

RNFX XRD

.. ..

0.31

0.53

-0.004

0.55

058

1.93

-0.003

0.46

0.53"

5

4.12

0.001

0.13

0.65

0.08

6

5.02

0003

0.06

0.60'

0.05

0.06

7

7.30

0.009

-0.11

0.22

0.05

0.08

0.20

8

6.48

0.008

-0.04

0.22

0.04

0.08

0.21

9

7.10

0.009

-0.09

0.23

0.05

0.08

••

• •

TRSOFTR

-0.27

•• ••

•

0.28

•• •

••

••

.. .. 0.20

0.04 0.004

R2

DW

0.96

121

0.96

1.18

0.96

1.25

0.96

1.2

0.96

1.38

0.97

1.78

0.99

2.07

0.99

1.97

0.99

2.04

Money, Income, Prices in 19th Century India

462

In the 5th period in which we five subsets (to give us a reasonable degree of freedom), only area is highly significant. In all the subsets interestingly the workforce becomes significant in the first and the 3 subsets. Capital is significant only in the first subset; the trend is not significant at all. Table 24.5 presents the regression 2 results. It may be noticed that R has relatively high value of 0.92 in the first and the third subsets where the work-force enters. In the 2nd subset where the work-force is absent the R 2 has gone down, implying that in this period either capital or land or both are growing sufficiently at a high pace in relation to production operations rendering the work force positively productive in output. PERIOD: 1885-86 1899-1900 Table 24 5' Determination of Real NDP - 1885-86 TO 1899-1900 SI.No. Constant

TREND

GKS48

LDRX93

1

4.27

·0.38

0.67

2

6.56

-012

0.69

3

7.0

0.005

-0.75

0.66

4

3.63

-0005

0.2

•• 0.70 ••

5

5.55

-0.002

-0.02

0.68

••

••

••

••

UIWF

RECNVHC

0.99

••

••

1.14

•

..

0.05

R2

D.W

0.92

2.36

0.88

1.61

0.92

2.35

088

1.78

0.88

1.76

TESTING THE CLASSICAL HYPOTHESIS ON INCOME DETERMINATION Classical theory contrary to what Keynes thought had a theory of income determination, emphasizing the factors on the supply aspect of real income. Readers of Ricardo would recollect that fixed capitals and circulating capitals determine the annual produce. We have a measure of gross capital stock (GKS48), we also have a measure of circulating capital in terms of the output of foodgrains (FOODPRO). Classical economics emphasises the commodity aspect of production, labour or rather employment is deemed to be a function of the stock of wage-goods, the primary component in circulating capitals, given the conventional real wage. In what follows we treat Y as a dependent variable and GKS48 and FOOD PRO as the independent variables. The results for the period 1861-62 to 1899-1900 are given both for original values and for first differences. In the case of the former, as there wl!s autocorrelation of the residuals, the Cochrane-Orcutt method has been employed to mitigate it. Y = 1841.10+0.14GKS48+35.07FOOOPRO **

-2

R

= 0.99

**

**

OW =1.95

..

OY = 36.37 - 0.020GKS48 + 35.900FOOOPRO -2

R = 0.96

OW = 2.36

The importance of food supply as a determinant of income is very clearly established. In fact, for the first differences results, fixed capitals did not even matter. The results for the other periods are also similar. For original values, both fixed capitals and circulating capitals in the form of food supply are highly significant.

463

The Determination of Real NDP & Related Matters

Explained portions are very high. For first differences food supply alone is highly significant and explained portions are very high. See Graphs which follow. DETERMINATION OF REAL INCOME Ind.var.=GKS48 FOODPRO ORIGINAL FORM PERIOD

= 1861-62 TO 1899-1900

,,----------------------------------------~--_,

7000

6500 6000

5500 5000 4500 4000

1861

1867

1873

1885

1879

1891

1897

FIRST DIFFERENCE FORM PERIOD = 1861-62 TO

1250 1000 750 500 250 0 250 500 750 1000

1862

1868

1880

1874

1886

1892

1898

PROJECTED AND ACTUALS

Sectoral Contributions to NDP The most important sector with multiplied effects on other sectors was agriculture. We have two measures of agricultural value-added as also two measures ofNDP. We make LY measures I as a function of the log form the former. For the different periods the results are: 1. 1861-62 to 1899-1900

..

LY1 = -3.34+ 1.57 LYAG1

LYII = 0.73+ 1.03LYAGII

-2

-2

•*

••

R =0.76 DW=1.13

R = 0.73 OW = 1.12

2. 1861-62 to 1872-73

. ..

LYI = 3.27+ 0.69 LYAGII

LYII = 3.99+ 0.59 LYAGII

-2

-2

R = 0.53 OW = 0.45

••

*.

R = 0.78 OW = 1.12

3. 1872-73 to 1892-93

..

..

LYI = -1.71+1.36LYAGI

LYII = 1.80 + 0.89LYAGII

-2

-2

R = 0.66 OW = 0.99

R =0.65 DW = 0.79

Money, Income, Prices in 19th Century India

464

Agriculture in both the measures is a highly significant determinant of NDP in both the measures. The explained portions are quite high. We now take the long forms of value added(s) in agriculture 1, mining and manufacturing, railways and trade as the independent variables and LYI as the dependent variable. The results for three periods are given Table 24.6 Table 24.6: Regression Results of L YI on logs of AgricultureI, Manufacturing, and Incomes f rom R al'1wl!Yan d T ra de Period

Constant

L RRAIL48

D.W

0.03

-0.003

L RTRX48 016

R2

3.04

L RNDPAG48 1 0.59

L MFMX48

1861-62 to 1899-1900 1861-62 to 1872-73 1872-73 to 1892-93

0.99

0.80

3.44

0.58

0007

0009

0.10

0.96

1.51

0.05

·0.01

0.99

2.21

••

••

3.51

••

•• •• 0.53 ••

••

••

•• •• 0.14 ••

Agriculture and trade emerge as the highly significant determinants of NDP_I. Manufacturing is significant only for the whole period. The explained portions are quite high. D.W. is satisfactory for the second and the third periods. We now take value added(s)' log form of agriculture 2, manufacturing and mining, railways and trade as the independent variables and LY_II as the dependent variables. Results are given in Table 24.7. Table 24.7: Regression Results ofLYII on logs of AgriculturelI, Manufacturing, and Incomes f rom R al'1 wayan d T ra d e Constant

L_RNDPAG48_II

L_MFMX48

L_RRAIL48

L_RTRX48

R2

D.W

1861-62

3.49

0.52

0.03

-0.005

0.16

0.99

0.95

to

0.98

1.62

0.99

2.28

Period

1899 1861-62

**

**

**

3.69

0.55

0.009

to

**

**

3.94

0.48

0.06

**

**

**

1872-73 1872-73

to 1892-93

** 0.009

0.10

** -0.01

0.14

**

Again agriculture II and trade, are highly significant in all the periods. Manufacturing and mining is significant in the first and the third periods. Explained portions are very high. D.W. is satisfactory for the last two periods.

Sources of Growth We now take up the issue of the contributions ofland, labour and capital to output growth. At the aggregate level real net domestic product is equal to the contribution of labour or workforce plus the contribution of land/natural resource, plus the contribution of capital. The contribution per unit of each of the three factors of production is equal to the marginal product of that unit multiplied by the volume or quantity of that factor. The rate of growth of the real net domestic product at constant prices is equal to the rate of growth of the contribution of workforce or labour, land or natural resource, capital stock plus contribution of a residual signifying the contribution of all the other unknowri factors.

The Determination of Real NDP & Related Matters

465

The above approach has a number of limitations but from the empirical angle it may be worthwhile applying the above approach to the growth of net domestic products of the economy during the period 1861-62 to 1899-00. With the real net domestic product of Indian Union as the dependent variable we have the workforce, land proxied by the agricultural area, and gross capital stock as the independent variables. We give below in Table 24.8 the results in the form of a table for the four periods. The dependent variable is real NOP and the function is specified in logarithmic form. Table 24.8: Sources of Growth of Real NDP PerIOd

1861-62 to 1899-1900 1861-62 to 1892-93 1861-62 to 1872-73 1871-72 to 1899-1900

CONSTANT

LABOUR

LAND

CAPITAL

li 2

DW

1.35

0.37

0.56

0.12

0.96

0.82

**

**

0.67

0.09

0.95

0.89

**

**

0.63

0.49

0.67

2.66

0.49

0.23

0.94

0.77

**

**

** 104

0.46

** 11.10

-5.07

** 1.78

**

-009

For the whole period the constant term is highly significant; land and capital stock are both highly significant. Labour is not significant. li 2 is high but OW is not satisfactory . For the period of 1861-62 to 1892-93 i.e., prior to the closure of the mints, the constant term is highly significant as are also land and capital. li 2 is high but OW is not satisfactory. For the period 1861-62 to 1871-72 i.e., before the fall in drift in the prices of silver and in the exchange rate of silver rupee. Only land is significant and highly so. But li 2 is rather relatively low. For the period 1871-72 to 1899-1900 the constant term is very highly significant as are also land and capital. li 2 is also high but OW is not satisfactory. It is interesting to observe that labour is not significant in any of the periods. Land alone is significant and very highly significant in all the periods. Capital stock is not significant in the period 1861-62 to 1871-72 but is very highly significant in the other periods. The constant term is not significant in the period 1861-62 to 1871-72. Otherwise, it is very highly significant in the other periods.

If we abstract from the constant term, the sum of the elasticity co-efficients is equal to unity. But the very high significance of the constant term in the three of the periods indicates that the contribution of the factors other than the trinity (labour,land and capital) would be significant. Looking to the entire period and the sub-periods it seems that land's contribution is about 50%; capital's contribution would be between 23 to 30 %. The most important result is the non-statistical significance of labour's contribution. Further its contribution has a negative sign in the two periods - 1861-62

466

Money, Income, Prices in 19th Century India

to 1871-72 and 1871-72 to 1899-1900. Abstracting from the non-satisfactory nature of the D.W values in three of the periods it would seem that the entire period as well as the sub-period was characterised by excessive labour pressure. There is some support to the existence of disguised unemployment, during the period of 1861-62 to 1871-72 and 1871-72 to 1899-1900. We have also conducted the regression exercises in terms of original values. The result more or less tells the same story as the above. What would have been the right model of economic theory for the period under discussion? If we assume that there was some excess labour pressure and in the form of disguised unemployment famines would probably affect that portion of population and of workers who would be on the margin of dependence. However, population size would recoup itself soon. Given long period disguised unemployment, and available land potential for cultivation etc., and irrigation potential, deficiency in capital, fixed and/or circulating would have been the major deficiency. Given the scope for imports of equipments, circulating capital deficiency would have been more telling. The concept of the wage-goods gap could explain the persistence of disguised unemployment. At the same time, if the drain could have been stopped, the accumulation rate could have been stepped up with effects on output and employment and their growth But, the exit of the British rule by itself would not have been sufficient. Thee was also need for institutional and organisational changes, in order to step up development.

467

The Determination of Real NDP & Related Matters

Appendix 1 Trend growth rates in real NDP and related Magnitudes The following statement gives the periodwise trend rates of growth of magnitudes connected with real NOP for four periods. Three of the periods are different from those which have been taken for discussion in the section on Sectoral Growth Rates above. Table 24.1.a: Trend growth rates in Sectoral and aggregate real NDP ITEM Agnculture I Agnculutre II Animal husbandry Forestry Fishenes Mmmg&Mfg Small mdustries & ServIces RaIlways Trade & other transport Housing Bankmg & Finance ResIdual Government NOPUI I NOPUI II Percaplta NOP I Percaplta NOP II

-0.16 -0.15 l.l2 6.06 0.85 17.02 055 19.81 259 0.40 9.94 2.56 0.61 052 0.26 0.18

PERIOD (Per Cenl) 0.68 0.43 0.68 0.42 1.61 050 4.98 1.83 0.67 0.67 4.91 8.44 058 001 5.39 10.30 3.93 099 048 010 4.90 1.73 1.50 1.86 -0.40 1.15 123 061 -0.21 062 0.50 0.70

0.68 068 1.40 A.93 070 8.37 0.52 10.15 3.00 0.42 4.85 1.65 094 1.06 0.52 0.64

Testing for Unit Roots in the Variables In the light of recent advances in the econometric theory, it is interesting to put the problem of GOP determination in the co-integration framework. In order to apply the co-integration technique in this context, it is necessary that GOP variable (as the variable of interest) should have unit root and among the rif;ht hand side variables that are taken for explaining GOP, at least one should also be unit root process. The following table furnishes the OF statistics for variables of our interest here. Table 24.2.a Dicky-Fuller statistics VARIABLE

I. 2. 3. 4. 5. 6. 7.

RGOPIN048 GKS48 LORX93 UIWF RCNVHC REALBAL RNFX

DF(WITHO UT TREND) -1.08 -4.70 -1.31 033 -1.47 -322 -4.25

DF(WITH TREND)

-4.28 -1.13 -523 -1.02 -2.46 -3.18 -4.15

From the above table, one can see that RGOPIN048 is not a unit root process (OF with trend). RGDPIND48 seems to be a convergent process with a drift term. Among the other listed variables, GKS48, LDRX93 (OF with trend) and RNFX are stationary and the rest seem to be unit root processes. Nevertheless, since RGDPIND48 is not a unit root process, Qne can not use the technique of cointegration here.

Chapter 25

THE EXCHANGE RATE OF THE RUPEE AND RELATED TRADE MATTERS Introduction The exchange rate plays a very important role in helping to determine the volume of exports and imports of merchandise and services, inflows and outflows of shortterm, medium-term and long-term capital, the internal and international terms of trade, the composition and the course of external debt etc. During the period of our study it also helped to determine the rupee burden of relatively fixed external obligations and the contours of Public Financial Policy of the Indian Government. In this Chapter, we have two parts, the first dealing with the exchange rate and matters closely related to it, in the second, we briefly deal with trade and the balance of international transactions in trade, and specially merchandise trade. We present figures of Balance of Trade as given in Herschell Report. Since this excludes wholly private inflows and out-flows from India, we make an estimate of the same. This enables us to find out whether there is a net outflow of capital over the period 187172 to 1892-93 from India. Exchange Rate and Related Matters Prior to 1861-62 for more than two decades, the exchange rate was ruling slightly above 24 pence per Rupee or slightly above Rs.1 0 per Sterling Pound. During the first decade from 1861-62 to 1871-72, the highest value it reached was in 1862, when the rate was 23.92 pence per Rupee or 10.03 rupees per Pound. From about 1870-71, it started its downward course because of the commencement of the falling drift in the Gold price of Silver. By 1875-76, it had fallen to 20.5 pence per rupee as compared to 22.49 pence per rupee in 1870-71. The falling drift continued and by 1890-91, it had reached a value of 18.08 pence, and by 1892-93, the rupee had fallen to 14.98 pence. The lowest level it reached was 13.1 pence in 1894-95. By 1899, the rupee reached the value of 16.04 pence. (Vide Graph attached). Propositions about the Behaviour of the Exchange Rate Before we go to the detailed results of some of the regressions concerning the determination of the exchange rate etc., we formulate below some propositions concerning the behaviour of the exchange rate during the period(s) of our study. 1. There is a negative relation between the London Gold Silver ratio and the exchange rate of the Indian rupee in terms of pence. The higher the LG_ S the lower is the exchange rate. The period from 1871-72 to 1892-93 is one of a more or less continuous fall in the exchange rate. This is the period when the Gold Silver ratio is also going up and the Indian rupee was linked to silver. The rupee weighed 1 tola of silver and was equal to the price of the latter. The silver price was held constant in India during the above period. In August 1893 the rupee was del inked from silver in that one could not get silver rupees minted in exchange for silver. From that date onwards the course of the London Gold Silver ratio and the exchange rate of the rupee started diverging.

The Exchange Rate of the Rupee & Related Trade Matters

469

2. There is a negative relation between the exchange rate and Home Charges, Council Bills, Net Remittances to England, and Net Disbursement in England. All these four measures weighted down the rupee. The larger the Home Charges, larger the Secretary of State's borrowings through Council Bills, the larger the Net Remittances to England, the larger the Net Disbursement to England, the lower would be the exchange rate. Have there been no liability of Home Charges, had the Secretary of State not borrowed regularly in London, had there been no need of Net Remittances to England, and had there been no Net Disbursements to be made in London by the Government of India, the exchange rate of the rupee would have been very much higher. By and large during the period of our study, all these four measures went on going up. Consequently, there is a downward pressure exercised on the exchange rate. 3. The higher the ratio of the index number of prices in the U.K. in relation to the index number of prices in India, the higher would been the exchange rate. The lower is the above ratio, the lower would have been the exchange rate. Given the course of the index number of prices in the U.K. a rising drift in prices in India would imply a falling exchange rate. 4. During the period of our study all the three factors mentioned above were involved in exerting in downward pressure on the exchange rate. 5. The ratio of money in the U.K. to money in India was going down; consequently, this also exercised a downward pressure on the exchange rate of the rupee. 6. We do not find any significant relation between the real exchange rate of the rupee and real volume of exports and real volume of imports. But the nominal exchange rate had a negative effect upon both the real volume of exports and the real volume of imports. Since the exchange rate was falling the real volume of imports should have gone down and the real volume of exports should have gone up. But both were going up. The explanation is that in the U.K. prices were going down. Customs duties had been removed in India. Indian economy was also growing, necessitating larger and larger imports. Consequently, both exports and imports were going up when the exchange was going down. 7. We find a significant and negative relation between money stock in India and the exchange rate. A reduction in a stock of money would have moved up the exchange rate. The Government of India experimented with the reduction of the stock of money in relation to real output. This helped the exchange rate to move up. 8. We find a significant relation between Council Bills in London and high powered money and money supply. There could be a possible relation which developed later between the course of money in London and the course of money in India. Probably Council Bills in London would have served as a basis for expansion of money in the U.K; at the same time they could have also provided a base for expansion of money in India. With the closing of the mints and the emergence of the Gold exchange

Money, Income, Prices in 19th Century India

470

standard, the relation between the Council Bills and money supply in India became closer. Hence the relation between the money in the U.K. and money in India also became closer. 9. We find a strong negative relation between quantities and values of exported commodities and the exchange rate of the rupee. We do not find any significant relation between the exchange rate and the export prices index. 10. When we substitute the price index in India in terms of Gold in place of the simpliciter price index and work out the ratio of the price index in the U.K. to the price index in India in terms of gold, we find that this ratio has similar effect as the ratio of price index in the U.K. to the price index in India. We have attached a number of graphs connected with the exchange rate etc. 1. Exchange Rates of Pence per Rupee and of Rupee per Sterling 2. World Gold and Silver Stocks and Their Ratio 3. Trends in the ratio of gold stock to silver and the ratio of gold price to silver price 4. London gold silver price ratio and the Indian exchange rate 5. Indices (log) of London gold-silver ratio and Indian index of GoldSilver Prices Ratio 6. Indices (log) of Indian Prices of Gold and Silver 7. Total Imports and Total Exports at Current Prices (Log) 8. Net exports and net imports of treasure 9.Indices (log) of export and import prices UN (Weighted) 10. Remittances to UK and Council Bills and tele-transfers. Exchange Rate of Pence per Rupee (EXDR) and Rupees per Sterling (EXRST) 24

22 EXDR

20

18

16

",... ..\ 14

/

12

--/.-- ....

10 1861

1866

"..

---

1871

.,._ ... /

..,"

,...."

1876

./

/

r--EXRST

1881

1886

1891

1896

471

The Exchange Rate of the Rupee & Related Trade Matters

World Gold and Silver Stocks and their Ratio 9000 8000

-

7000

-

\

23 \

--" ------, - ---

\

\

,

".,

",,'" '"

\

r--

22

f-

21

\

6000

-

5000

-

\

WSTSIL

\

\

\

4000

-

3000

-

2000

-

1000

I-

(/) (/)

\

l-

I

(/)

\ \

,,

\

,.

...... GST_SST

-, ,

WSTG

........

-- ------

-

..,..--- ..... ....

,

Cl

-

20

-

19

..... 18

0 1862

1874

1868

1880

1886

1892

1898

Trends in Ratio of Gold·Silver Stock and Gold·Silver Price 350

23

\ \

32.5

\

\ \

\

30.0

22 \

\

21.5

\

,

GST_SST

21

\ \

25.0

~'

Cl

\

\

\

22.5 20.0

,,

20

' .. -.... .... ' ... .c-'--

17.5

-~-----~~

.... ...- .....

15.0 1862

lii

1868

1874

1880

1886

1892

-- .... , ~

19

.

' •

1898

18

Money, Income, Prices in 19th Century India

472

London Gold-Silver Price Ratio and the Indian Exchange Rate 350 32.5 30.0 27.5 25.0

- - --"" 22.5

EXDR '----.."',.... ....

'

..... "

200

'-",

"""'""--- .......

_-

17.5 15.0 12.5 1861

1866

1871

1876

1881

1891

1886

1896

London Gold-Silver Price Ratio and the Indian Gold-Silver Price Ratio 350

2.24

32.5

208

300

192

27.5

1.76

25.0

1.60

10.25

523.28

523.39

7.94

-7.68

tot 1871-93

Mean -> 12.82

2104.78

2092.68

35.73

-23.63

tot 1893-99

Mean -> 16.36

940.19

944.53

9.41

-13.74

-1.33

106.68

-2.54

108.11

1.28

114.01

2.69

I

113.90 113.88 117.27

incr -> 350.77 mcr-> 1670.14 incr -> 866.41

Money, Income, Prices in 19TH Century India

654

BLOCKVIB PUBLIC FINANCES ADJUSTED FOR EXCHANGE RATE CHANGES (Concluded)

YEAR

Rupee Debt RUDT (Rs.Crs)

1861-62 1862 1863 1864 1865-66 1866 1867 1868 1869 1870-71 1871 1872 1873 1874 1875-76 1876 1877 1878 1879 1880-81 1881 1882 1883 1884 1885-86 1886 1887 1888 1889 1890-91 1891 1892 1893 1894 1895-96 1896 1897 1898 1899-1900

(8) 105.14 105.56 99.72 99.73 99.71 102.11 103.41 103.79 109.42 113.13 122.39 114.96 115.29 122.95 127.36 134.93 142.46 146.86 162.38 167.25 166.97 169.26 171.64 173.75 174.52 185.67 191.95 206.62 211.63 218.43 222.27 222.76 233.35 234.29 234.34 238.33 248.99 246.74 313.42

tot 1861-71 tot 1871-93 tot 1893-99

1164.11 3905.65 1749.46

(I)

Centres's Sterlmg Debt CENSTDT (Rs.Crs)

(91

Total Debt TODT (Rs.Crs)

Ratio of Govt.Rev. to GDPUIMP

Ratio of Govt.Exp. to GDPUIMP

(%)

(%)

(Ill

(I~

32.28 31.96 26.44 26.28 27.16 29.70 30.76 32.28 36.31 40.15 46.70 41.12 41.87 50.04 52.53 64.82 68.87 72.76 85.19 85.97 82.24 84.32 83.68 86.14 97.06 115.90 119.48 139.31 142.28 138.55 153.80 170.90 178.38 208.87 200.46 189.04 183.29 179.89 179.47

(10) 137.42 137.52 126.16 126.01 126.87 131.81 134.17 136.Q7 145.73 153.28 169.09 156.08 157.16 172.99 179.89 199.75 211.33 219.62 247.57 253.22 249.21 253.58 255.32 259.89 271.58 301.57 311.43 345.93 353.91 356.98 376.Q7 393.66 411.73 443.16 434.80 427.37 432.28 426.63 492.89

5.75 5.88 5.50 5.67 5.43 4.72 5.41 6.03 5.49 6.14 6.44 6.30 6.46 5.95 6.05 8.26 7.03 6.97 7.68 9.34 9.86 9.28 9.21 8.77 9.41 10.34 10.91 11.22 10.68 9.87 10.99 10.91 11.35 13.67 13.86 12.58 10.29 5.03 5.38

360.0178 2201.884 1319.41

1524.128 6107.534 3068.87

5.68 8.95 10.14

Ratio of Total Debt Ratio of Strlg.Debt to to GDPUIMP(%) GDPUIMP

(%)

5.81 5.68 5.54 5.73 5.26 5.04 5.54 6.37 5.47 5.95 6.05 6.07 6.70 5.91 6.05 8.04 7.51 6.75 7.82 9.80 9.39 9.19 8.07 8.82 9.76 10.32 11.19 11.22 10.35 9.44 10.93 11.01 11.54 13.57 13.65 12.81 10.86 4.83 5.16

113) 4.26 4.21 3.28 3.29 3.16 3.17 3.24 3.75 3.75 4.28 5.59 4.64 4.74 5.00 5.47 6.63 5.87 5.30 6.62 7.47 7.36 7.37 7.11 6.92 7.09 8.19 8.21 8.90 8.50 9.05 9.24 8.06 8.21 8.94 9.12 9.17 8.00 8.91 14.07

(14) 18.21 18.15 15.70 15.87 14.87 14.62 14.65 16.33 15.52 17.42 21.00 18.58 19.09 18.76 20.78 23.91 20.78 19.39 23.12 26.46 26.91 27.25 26.65 25.94 26.09 29.31 30.38 32.41 30.65 30.96 32.37 29.73 31.27 34.73 34.82 34.41 29.51 31.74 38.65

5.68 8.90 10.15

3.82 7.09 9.70

16.58 25.94 33.98

Part IV

655

BLOCK VII A SECTOR-WISE NET DOMESTIC PRODUCT ESTIMATES AT 1948-49 PRICES INDICES OF SECTORAL REAL NDPS (73-74=100)

YEAR

(1)

New value added in Small Antmal Agriculture First Agriculture in 48-49 Mmingand Industries Fishing Forest Method agrIcultural prices Husbandry Manufacturln and Services RF48 RFlSH48 RNDPAG48j Second Method RAH48 gMFMX48 RSISE48 (Rs.Crsj (Rs Crs) (Rs.Crs) (Rs.Crsj RNDPAG48 11(') (Rs.Crsj (Rs.Crs) (Rs.Crs) (8) (2) (3) (4) (5) (6) (7)

Railways RRAIL48 (Rs Crs)

Trade and other Transport RTRX48 (Rs.Crs)

(9)

(10)

0.79

257.93

1861-62

1934.85

1932.13

188.90

6.72

16.68

3.50

1055.45

1862

1921.03

1934.76

19126

6.52

16.77

3.73

1061.75

1.17

310.16

1.72

362.55

1863

1935.23

1920.70

193.61

7.76

16.95

4.12

1068.21

1864

1748.24

1715.28

196.03

8.64

17.13

348

1074.67

2.53

329.5

1865-66

1892.63

1854.60

198.48

8.84

17.22

3.81

1081.12

3.73

340.35 241.87

1866

1799.57

1690.69

200.94

6.72

17.40

10.33

1087.73

4.91

1867

1922.78

1910 06

203.45

7.56

17.49

12.17

1094.34

5.14

30847

1868

1795.86

1659.62

193.44

10.08

17.67

12.89

1067.41

4.94

356.49 347.08

1869

1932.39

1921.38

208.52

10.72

17.85

13.13

1107.56

5.79

1870-71

1930.64

1922.09

211.07

10.92

18.03

14.97

1114.17

5.95

357

1871

1914.70

1893.25

213.66

13.48

18.12

11.40

1120.93

5.82

413.6

1872

1976.30

1997.28

216.27

14.76

18.30

12.85

1127.85

5.91

359.44

1873

1888.05

1836.87

206.60

16.00

18.40

13.73

1102.69

7.09

348.59

1874

1988.31

2021.26

221.47

13.88

18.48

17.25

1139.22

8 14

364.4

7.62

414.19

1875-76

2006.88

2057.58

223.92

18.52

18.66

1785

1144.91

1876

1813.77

1701.81

202.35

15.76

18.75

17.09

1089.83

11.24

419.65

15.85

425.04

1877

1825.57

1722.97

228.86

14.52

18.85

19.25

1156.28

1878

2066.74

2159.15

231.35

12.40

1894

19.02

1162.12

14.18

396.39

1879

1994.43

2025.48

233.90

14.72

19.03

22.60

1167.96

15.32

441.44

1880-81

1901.81

1855.20

23648

18.48

19.11

24.05

1173.8

18.14

507.71

1881

1981.33

2001.49

239.10

22.72

19.30

27.97

1179.64

22.92

560.69

1882

1988.27

2014.96

241.98

24.60

19.48

30.98

118548

25.74

6\0.31

1883

2006.88

2043.09

246.75

27.12

19.66

33.80

1191.48

29.66

659.34

1884

1988.75

2014.96

251.62

24.20

19.75

36.61

1198.24

28.92

631

1885-86

2035.06

2090.15

256.40

26.72

19.84

3794

1206.23

32.85

657.99

1886

2075.91

2170.98

261.27

27.56

20.02

43.73

1210.23

33.98

684.74

1887

2046.86

2157.52

266.24

28.20

20.20

46.32

1218.22

35.06

694.75 693.15

1888

2030.91

2086.48

271.27

32.20

20.29

50.14

1222.06

38.88

1889

2117.63

2240.59

276.41

33.88

20.47

55.72

1230.21

38.6

701.81

38.62

698.53

1890-91

2111.08

2227.12

281.67

33.04

20.56

61.97

1238.36

1891

2034.19

1890.50

287.00

33.68

20.74

61.83

1246.66

39.26

752.02

1250.5

45.13

705.76

1892

2198.03

2227.96

292.46

32.20

20.92

63.85

1893

2273.38

2278.19

297.99

36.00

21.01

65.06

1258.8

45.5

735.03

303.68

33.26

21.19

74.90

1266.94

56.47

757.32

1894

2227.95

2430.64

1895-96

2141.67

2275.92

307.38

36.60

21.28

77.23

1275.4

57.37

761.35

1.&96

1964.94

1839.51

281.99

3576

21.46

79.96

1222.72

55.02

687.09

1897

2133.80

2626.00

313.85

31.76

21.64

83.51

1287.54

57.57

656.48

1898

2218.12

2623.98

323.73

39.36

21.73

90.07

1291.54

61.87

817.87

1899-1900

2000.77

2112.87

292.00

38.52

21.91

86.68

1228.25

69.01

794.15

Money, Income, Prices in 19TH Century India

656

BLOCK VII A SECTOR-WISE NET DOMESTIC PRODUCT ESTIMATES AT 1948-49 PRICES INDICES OF SECTORAL REAL NDPS (73-74=100 (CONTINUED)

YEAR

Real Estate and Housing RHOSPR48 (Rs.Cr.l)

Banking and Fmance RBNK48 (Rs.Crs)

(I)

(II)

(12)

1861-62

186.21

0.66

Rreal Net Residual Domes/ic Government Product at RRESG48 48-49 prices (Rs Crs) RNDPlND48 1 (Rs.Crs) (13) (14)

Rreal Net Domestic product at 4849 prices * (Rs.Crsj

Agricult Animal Agriculture ure Husband RNDPAG48X RNDPA ry _I G48JI RAH48X

Forest RF48X

Fishing RFlSH4 8X

(15)

(16)

(17)

(18)

(19)

(20)

9921

3750.90

3748.18

102.48

105.19

91.43

42.00

9065

1862

186.96

1.16

9921

3799.72

3813.45

101.75

105.33

92.58

40.75

91.14

1863

187.71

1.10

101.42

3880.38

386585

102.50

104.56

93.71

48.50

92.12

1864

188.46

1.03

104.48

367419

364123

92.60

93.38

94.88

54.00

93.10

1865-66

189.23

0.99

100.75

3837.15

3799.12

100.24

100.97

96.07

55.25

93.59

1866

189.98

086

91.8

3652.11

3543.23

95.31

92.04

97.26

42.00

94.57

1867

190.75

1.05

106.74

3869.94

3857.22

101.84

103.98

98.48

47.25

95.05

3776.73

3640.49

95.12

90.35

93.63

63.00

96.03

3952.67 3979.92

3941.66 3971.37

102.35 102.26

104.60 104.64

100.93 102.16

67.00 68.25

97.01 97.99 98.48

1868

191.52

1.44

12499

1869

192.27

1.71

1870-71

193.02

202

115.65 122.13

1871

193.79

2.50

125.58

4033.58

4012.13

101.41

103.07

103.42

8425

1872

194.73

2.05

129.82

4058.28

4079.26

104.67

10873

104.68

92.25

99.46

1873

194.94

171

128.62

3926.42

3875.24

100.00

100.00

100.00

100.00

100.00 100.43

1874

195.15

1.70

123.34

409134

412429

105.31

110.04

107.20

86.75

1875-76

195.41

1.61

150.28

4199.85

4250.55

106.29

11202

108.38

115.75

101.41

1876

195.64

2.02

147.74

3933.84

3821.88

96.07

92.65

9794

98.50

101.90

1877

195.88

1.56

120.81

4022.47

3919.87

9669

93.80

110.77

90.75

102.45

1878

196.11

1.57

116.83

423565

4328.06

109.46

117.55

111.98

77.50

102.93

1879 1880-81

196.34 19658

1.99 199

4231.17 4237.51 440955

4262.22 4190.90 4429.71

105.63 100.73 104.94

110 27 10100 108.96

113.21 114.46 115.73

9200 115.50 142.00

103.42 103.86 104.89

1881

196.81

2.33

123.44 13936 15674

1882

197.14

2.36

155.19

4481.53

4508.22

105.31

109.70

117.12

153.75

105.87

1883

194.33

2.49

156.74

4568.25

4604.46

106.29

111.23

119.43

169.50

106.85 107.34

1884

200.88

2.60

152.68

453525

4561.46

10533

109.70

121.79

151.25

1885-86

202.73

2.75

160.29

4638.80

4693.89

107.79

113.79

124.10

167.00

107.83

1886

204.6

3.29

168.9

4734.23

4829.30

109.95

11819

126.46

172 25

108.80

1887

206.48

3.44

171.82

4737.59

4848.25

108.41

117.46

128.87

176.25

109.78

1888

208.35

3.35

165.34

4735.94

479151

107.57

113.59

131.30

201.25

110.27

1889

210.22

4.60

167.35

4856.90

4979.86

112.16

121.98

133.79

211.75

111.25

1890-91 1891

21209 213.96

4.73 4.65

1892

214.22

4.20

158.22 164.17 155.66

4858.87 4858.16 498293

4974.91 4714.47 5012.86

111.81 107.74 116.42

121.25 10292 121.29

136.34 138.92 141.56

206.50 210.50 201.25

111.74 11272 11370

1893

214.5

4.81

164.51

5116.59

5121.40

120.41

124.03

14424

225.00

114.18 115.16

1894

214.76

5.21

175.66

5137.34

5340.03

11800

132.33

146.99

207.88

1895-96

215.04

5 17

179.33

5077.82

5212.07

113.43

123.90

148.78

228.75

115.65

1896

215.3

4.50

1897

215.3

4.01

169.38 156.98

4738.12 4962.44

4612.69 5454.64

104.07 113.02

100.14 14296

136.49 151.91

223.50 198.50

116.63 117.61

1898 1899-1900

215.56 215.81

5.19 5.59

183.01 190.72

5268.05 494341

5673.91 5055.51

117.48 105.97

142.85 115.03

156.69 141.34

246.00 240.75

118.10 119.08

* based on backcast agricultural production series

Part IV

657

BLOCK VII A SECTOR-WISE NET DOMESTIC PRODUCT ESTIMATES AT 1948-49 PRICES INDICES OF SECTORAL REAL NDPS (73-74=100) (Concluded)

YEAR

(I)

Small Trade and Industries Real Estate Banklllg and Mining and Rutlway.\ othel FlI1an(e Manufacturing and and Housmg RRAlL48X Transport Services RHOSPR48X RBNK48X MFMX48X RTRX48X RSISE48X (25) (26) (21) (22) (23) (24)

Re'ldual Government RRESG48X

(27)

Rrcal Net Dome,tlc Product at 4849 prices - I RNDPINDX I (28)

Real Net Domestic Product at 4849 prices - J/ • RNDPINDX J/ (29)

1861-62'

2549

95.72

11 14

7399

9552

3860

77 13

95.53

96.72

1862

2717

96.29

1650

8898

9591

67.84

7713

9677

98.41

1863

3001

96.87

2426

10400

9629

6433

7885

9883

99.76

1864

25.35

97.46

3568

9452

96.68

6023

8123

93.58

93.96

1865-66

27.75

98.04

5261

97.64

9707

57.89

78 33

9773

98.04

1866

75.24

9864

6925

69.39

97.46

5029

71.37

93.01

91.43

1867

88.64

9924

72.50

88.49

9785

6140

82.99

98.56

9954

1868

93.88

96.80

69.68

10227

98.25

8421

9718

96.19

93.94

1869

95.63

10044

81.66

99.57

9863

100.00

8992

10067

101.71

1870-71

109.03

10104

8392

102.41

9902

118 13

9495

101.36

10248

1871

8303

101.65

8209

118.65

9941

14620

97.64

102.73

10353

1872

9359

102.28

8336

10311

9989

11988

100.93

103.36

105.26

1873

100.00

10000

10000

100.00

100.00

10000

100.00

100.00

100.00

1874

125.64

10331

114.81

10454

100.11

9942

9589

10420

106.43

1875-76

13001

103.83

107.48

11882

100.24

94 15

11684

10696

109.68

1876

124.47

98.83

15853

120.38

100.36

118 13

114.87

100.19

98.62

1877

140.20

10486

223.55

121.93

10048

91 23

93.93

102.45

101 15

1878

138.53

10539

200.00

11371

100.60

91.81

9083

107.88

111.68

1879

164.60

10592

21608

126.64

10072

11637

95.97

107.76

109.99

1880-81

175.16

106.45

255.85

14565

10084

116.37

10835

107.92

108.15

1881

203.71

10698

323.27

160.85

10096

136.26

12186

112.30

114.31

1882

22564

10751

363.05

17508

101.13

138.01

12066

114.14

116.33

1883

246.18

10805

418.34

189.14

99.69

145.61

118.82

266.64

10867

407.90

181.01

103.05

152.05

12186 11871

116.35

1884

11551

11771

1885-86

276.33

109.39

463.33

188.76

104.00

160.82

124.62

118.14

121.13

1886

318.50

10975

479.27

196.43

104.96

19240

131.32

120.57

124.62 125.11

1887

33736

11048

494.50

19930

10592

201.17

13359

120.66

1888

365.19

110.83

548.38

198.84

106.88

19591

128.55

120.62

123.64

1889

405.83

111.56

544.43

20133

107.84

26901

130.11

123.70

128.50

1890-91

451.35

112.30

544.71

20039

108.80

276.61

123.01

123.75

128.38

1891

450.33

113.06

553.74

21573

109.76

27193

127.64

123.73

121.66

1892

465.04

11340

636.53

20246

109.89

245.61

121.02

126.91

129.36

1893

473.85

11416

641.75

21086

110.03

281.29

127.90

130.31

132.16

1894

54552

114.90

796.47

217.25

11017

304.68

13657

130.84

137.80

1895-96

562.49

115.66

809.17

21841

110.31

302.34

139.43

129.32

134.50

1896

582.37

110.89

776.02

197.11

11044

263.16

13169

120.67

119.03

1897

608.23

116.76

811.99

18832

11044

234.50

122 05

126.39

140.76

1898

656.01

11713

872.64

23462

110.58

303.51

14229

13417

146.41

1899-1900

631.32

11139

97334

227.82

11071

326.90

14828

125.90

130.46

* based on backcast agricultural production series

TH

658

Money, Income, Prices in 19

Century India

BLOCKVIIB NET DOMESTIC PRODUCT (MEASURE I AND II) OF INDIAN UNION TERRITORIES & INDIAN SUB-CONTINENT - REAL AND NOMINAL AND GDP (MEASURES I & II) AT FACTOR COST AND AT CURRENT MARKET PRICES

YEAR

(I)

Indian SubSubIndian Union UnionNDP Continent SubContinent SubSubIndian Unton NDPatCurr. at Curro Indian Union NDP Continent Continent Continent NDP Prices Prices RNDPIND48J RNDPlND48JI Crr.Pric PERCAPN Crr.Price RNDPUl48J RNDPUl48_1 (Rs.Crs) Rs.Crs) NDPINDCU NDPINDC NDPUlCU DUlCUJ Rs.Crs) I Rs.Crs) NDPUlCU PJ Rs.Crs) UP 1/ (Rs) 1/ J(Rs.Crs) Rs.Crs) (R;'Crs) (10) (8) (9) (2) (3) (4) (5) (6) (7)

1861-62

3750.90

3748.18

4576.09

4572.7~

537.88

537.49

656.21

655.74

25.67

1862

3799.72

3813.45

4635.66

4652.41

544.88

546.85

664.75

667.16

25.91

1863

3880.38

3865.85

4734.07

4716.34

578.95

576.79

706.32

703.68

27.43

1864

3674.19

3641.23

4482.51

4442.30

574.64

569.49

701.06

694.78

27.11

1865-66

3837.15

3799.12

4681.33

4634.92

616.63

610.52

752.29

744.83

29.01

1866

3652.11

3543.23

4455.58

4322.74

650.08

630.69

793.09

769.45

30.48

1867

3869.94

3857.22

4721.32

4705.81

658.28

656.11

803.10

800.46

30.75

1868

3776.73

3640.49

4607.61

4441.39

598.99

577.38

730.77

704.40

27.87 31.17

1869

3952.67

3941.66

4822.25

4808.82

672.35

670.48

820.27

817.98

1870-71

3979.92

3971.37

4855.50

4845.07

631.22

629.86

770.08

768.43

29.19

1871

4033.58

4012.13

4920.97

4894.79

578.42

575.34

705.67

701.91

26.68

1872

405828

4079.26

4951.10

4976.70

605.50

608.63

738.70

742.52

27.85

1873

3926.42

3875.24

4790.23

4727.79

591.32

583.61

721.41

712.oJ

27.18 30.25

1874

4091.34

4124.29

4991.44

5031.64

65871

664.01

803.62

810.09

1875-76

4199.85

4250.55

5123.82

5185.67

617.38

624.83

753.20

762.29

28.32

1876

3933.84

3821.88

4799.29

4662.69

597.94

580.93

729.49

708.73

27.41

1877

4022.47

3919.87

4907.41

4782.24

732.09

713.42

893.15

870.37

33.53

1878

4235.65

4328.06

5167.49

528023

813.24

830.99

992.16

1013.80

37.22

1879

4231.17

4262.22

5162.03

5199.91

761.61

767.20

929.16

935.98

34.83

1880-81

4237.51

4190.90

5169.76

5112.90

682.24

674.74

832.33

823.18

31.17

1881

4409.55

4429.71

5379.64

5404.25

665.84

668.89

812.33

816.04

30.39

1882

4481.53

4508.22

5467.47

5500.03

667.75

671.73

814.65

819.51

30.19

1883

4568.25

4604.46

5573.27

5617.45

689.81

695.27

841.56

848.23

30.90

1884

4535.25

4561.46

5533.01

5564.99

721.11

725.27

879.75

884.83

32.00

1885-86

4638.80

4693.89

5659.34

5726.54

737.57

746.33

899.83

910.52

32.42

913.22

31.95

916.80

31.70

1886

4734.23

4829.30

5775.76

5891.75

733.81

748.54

895.24

1887

4737.59

4848.25

5779.86

5914.86

734.33

751.48

895.88

1888

4735.94

4791.51

5777.85

5845.64

771.96

781.02

941.79

952.84

33.02

1889

4856.90

4979.86

5925.42

6075.43

830.53

851.56

1013.25

1038.90

35.20

1890-91

4858.87

4974.91

5927.82

6069.39

830.87

850.71

1013.66

1037.87

34.90

1891

4858.16

4714.47

5926.96

5751.65

840.46

815.60

1025.36

995.04

35.00

1892

4982.93

5012.86

6079.17

6115.69

956.72

962.47

1167.20

1174.21

39.80

1893

5116.59

5121.40

6242.25

6248.11

951.69

952.58

1161.06

1162.15

39.54

1894

5137.34

5340.03

6267.55

6514.84

919.58

955.87

1121.89

1166.16

38.16

1895-96

5077.82

5212.07

6194.94

6358.72

898.77

922.54

1096.50

1125.49

37.26

1063.59

37.09

1896

4738.12

4612.69

5780.51

5627.49

895.50

871.80

1092.52

1897

4962.44

5454.64

6054.18

6654.66

1061.96

1167.29

1295.59

1424.10

43.93

1898

5268.05

5673.91

6427.03

6922.17

969.32

1044.00

1182.57

1273.68

40.06

1899-1900

4943.41

5055.51

6030.96

6167.72

899.70

920.10

1097.63

1122.52

37.13

659

Part IV

BLOCK VIIB NET DOMESTIC PRODUCT (MEASURE I AND II) OF INDIAN UNION TERRITORIES & INDIAN SUB-CONTINENT - REAL AND NOMINAL AND GDP (MEASURES I & II) AT FACTOR COST AND AT CURRENT MARKET PRICES (CONTINUED)

YEAR

Gross Gross Gross DomestIc Gross Domestic SubDomestIc DomestIc SubSub-Contment Product at Product at IndIan Continent Continent Product at Product at PERCAPNDP Current Current Market Union PERCAPND PERCAPND Current Current Market U148jl Prices RNDPIND4 U1CUjl PUl48j Factor Cost Factor Cost (Rs 48-49) Prices GDPUlMPjl 8Xj (Rs.) (Rs 48-49) GDPUlCUj GDPUlCUj GDPUlMP I (Rs Crs) (Rs.Crs) I (Rs.Crs) (Rs) -

(I)

(II)

(12)

(13)

(14)

(15)

(16)

(17)

(18)

1861-62

25.65

179.00

178.87

666.83

666.36

680.15

67968

95.53

1862

26.00

180.67

181.32

670.13

672.54

683.69

686.10

96.77

1863

27.33

183.83

183.14

712.72

710.08

726.16

723.52

98.83

1864

26.87

173.36

171.81

706.31

700.Q3

720.90

714.62

93.58

1865-66

28.73

180.55

178.76

757.54

750.08

772.00

764.54

97.73

1866

29.57

171.22

166.12

802.31

778.67

816.00

792.36

93.01

1867

30.65

180.79

180.20

812.70

810.06

828.57

825.93

98.56

1868

26.87

175.74

169.40

740.50

714.13

756.37

730.00

96.19

1869

31.09

183.27

182.75

835.25

832.96

850.86

848.57

100.67

1870-71

29.12

184.Q3

183.63

78096

77931

797.98

796.33

101.36

1871

26.54

186.06

185.07

715.13

711.37

731.77

728.01

102.73

1872

28.00

186.69

18766

744.33

748.15

761.23

765.05

103.36

1873

26.83

180.48

178.13

729.09

719.69

746.63

737.23

100.00

1874

30.50

187.92

189.43

818.98

825.45

836.64

843.11

104.20

1875-76

28.67

192.68

195.00

768.56

777.65

78661

795.70

106.96

1876

26.63

180.33

175.20

743.57

722.81

761.49

740.73

100.19

1877

32.68

18425

179.55

909.79

887.oI

928.09

905.31

102.45

1878

38.03

193.87

198.10

1007.52

1029.16

1026.59

1048.23

107.88

1879

35.09

193.51

194.93

954.76

961.58

974.73

981.55

107.76

1880-81

30.82

193.57

191.44

854.09

844.94

874.83

865.68

10792

1881

30.53

201.27

202.19

825.13

82884

845.87

849.58

112.30

1882

30.37

202.59

203.80

832.57

837.43

851.26

856.12

114.14 116.35

1883

3l.l4

204.62

20624

858.20

864.87

877.02

883.69

1884

32.18

201.23

202.39

897.67

902.75

917.25

922.33

115.51

1885-86

32.80

203.90

206.32

934.39

945.08

954.23

964.92

118.14

1886

32.60

206.16

210.30

922.12

940.10

942.73

960.71

120.57

1887

32.44

204.49

209.26

918.92

939.84

940.04

960.96

120.66

1888

33.40

202.56

204.94

955.87

966.92

978.65

989.70

120.62

1889

36.09

205.86

211.07

1033.73

1059.38

1057.79

1083.44

123.70

1890-91

35.73

204.10

208.97

1031.58

1055.79

105654

1080.75

123.75

1891

33.97

202.33

196.35

1042.00

1011.68

1067.60

1037.28

123 73

1892

40.04

207.31

208.56

1185.12

1192.13

1210 98

1217.99

126.91

1893

39.58

212.57

212.77

1177.70

1178.79

1203.30

1204.39

130.31

1894

39.67

213.20

221.62

1139.81

1184.08

1169.12

1213.39

130.84

1895-96

38.25

210.51

216.08

1115.70

1144.69

1147.19

1176.18

129.32

1896

36.10

196.22

191.03

1111.72

1082.79

1141.93

1113.00

120.67

1897

48.29

205.30

225.66

1312.23

1440.74

1342.69

1471.20

126.39

1898 1899-1900

43.14 37.97

217.71

234.48

1203.05

1294.16

1234.79

1325.90

134.17

204.00

208.63

1146.27

1171.16

1177.50

1202.39

125.90

Money, Income, Prices in 19

660

TH

Century India

BLOCK VIIB NET DOMESTIC PRODUCT (MEASURE I AND II) OF INDIAN UNION TERRITORIES & INDIAN SUB-CONTINENT - REAL AND NOMINAL AND GDP (MEASURES I & II) AT FACTOR COST AND AT CURRENT MARKET PRICES (CONTINUED)

YEAR

SubIndian UnIOn Contment RNDPIND48X_ RNDPUl48X II j

Sub-Continent RNDPUl48Xjl

SubSubIndIan Union Indian Union Contment Continent SubNDPat NDPat Curr Continent NDP NDP Przces Curr.Prices Crr.Pric Crr Pric PERCAPND NDPINDCU NDPINDCU NDPUlCUX_ NDPUlCUX_ U1CUXj PXj PXjl I II (23) (24) (25) (26) (22)

(1)

(19)

(20)

(21)

1861-62

96.72

95.53

96.72

90.96

92.10

90.96

92.10

94.44

1862

98.41

96.77

98.41

92.15

93.70

92.15

93.70

95.32

1863

9976

98.83

99.76

9791

98.83

97.91

98.83

100.91

1864

93.96

93.58

93.96

9718

97.58

97.18

97.58

99.75

1865-66

98.04

97.73

98.04

104.28

104.61

104.28

104.61

106.75

1866

91.43

93.01

91.43

109.94

108.D7

109.94

108.D7

11213

1867

99.54

98.56

99.54

111.32

112.42

111.32

112.42

113.14

1868

93.94

96.19

93.94

101.30

9893

10130

98.93

102.54

1869

101.71

100.67

101.71

113.70

114.88

113.70

114.88

114.69

1870-71

10248

101.36

102.48

106.75

107.92

106.75

107.92

107.38

1871

103.53

102.73

103.53

97.82

98.58

97.82

98.58

98.16

1872

105.26

103.36

105.26

102.40

104.29

102.40

104.29

102.48

1873

100.00

100.00

100.00

100.00

100.00

100.00

100.00

100.00

1874

106.43

104.20

106.43

111.40

113.78

111.40

113.78

111.31

1875-76

109.68

106.96

109.68

104.41

107.06

104.41

107.06

104.20

1876

98.62

100.19

98.62

101.12

99.54

101.12

99.54

100.84

1877

10 1.15

102.45

101.15

123.81

122.24

123.81

122.24

123.37

1878

111.68

107.88

111.68

137.53

14239

137.53

142.39

136.94

1879

109.99

107.76

109.99

128.80

131.46

128.80

13146

128.15

1880-81

108.15

107.92

108.15

115.38

11561

115.38

115.61

114.66

1881

114.31

112.30

114.31

112.60

114.61

112.60

114.61

111.81

112.93

115.10

111.05

116.66

119.13

113.67

1882

116.33

114.14

116.33

112.93

115.10

1883

118.82

116.35

11882

116.66

119.13

1884

117.71

115.51

117.71

121.95

12427

121.95

124.27

117.71

1885-86

121.13

118.14

121.13

124.73

127.88

124.73

127.88

119.27

1886

124.62

120.57

124.62

124.10

128.26

124.10

128.26

117.56

1887

125.11

120.66

125.11

124.18

128.76

124.18

128.76

116.61

1888

123.64

120.62

123.64

130.55

133.82

130.55

133.82

121.47

1889

128.50

123.70

12850

140.45

145.91

140.45

145.91

129.51

1890-91

128.38

123.75

128.38

140.51

145.77

140.51

145.77

128.40

1891

121.66

123.73

121.66

142.13

139.75

142.13

139.75

128.78

1892

129.36

126.91

129.36

161.79

164.92

16179

164.92

146.44

1893

132.16

130.31

132.16

160.94

163.22

160.94

163.22

145.47

1894

137.80

130.84

13780

15551

163.78

155.51

163.78

140.41

1895-96

134.50

129.32

134.50

151.99

158.07

151.99

15807

137.08

1896

119.03

120.67

119.03

151.44

149.38

151.44

149.38

136.44

1897

140.76

12639

140.76

179.59

200.01

179.59

200.01

161.63

1898

14641

134.17

146.41

163.93

178.89

16393

178.89

147.38

1899-1900

130.46

125.90

13046

152.15

157.66

152.15

157.66

136.60

Part IV

661

BLOCK VII B NET DOMESTIC PRODUCT (MEASURE I AND II) OF INDIAN UNION TERRITORIES & INDIAN SUB-CONTINENT - REAL AND NOMINAL AND GDP (MEASURES I & II) AT FACTOR COST AND AT CURRENT MARKET PRICES (Concluded)

YEAR

(I)

Gross Dome.\tlc Gross Domestic Gros~ Domestic Gross Domestic Sub-Contment Sub-Contment Product at Product at Ploduct at Product at Sub-Contment PERCAPNDUICUX PERCAPNDPU PERCAPNDPU Currelll Factor Current Factor Current Market Current Market 148X-,1 Cost CO.II Prices Prices 148:.t .6c9, O>.t

C'c9, O>.t .tc9, Q 0lc9.t c9