European enterprise, roughly between       the 1850s and the 1880s. Because of
in the United States.
Confinement of Indians to the Bazaar The merchant communities of the
interior were engaged at that times in quite a different set of activities—the
marketing of agricultural produce, the financing of the inland trade in
commodities, the facilitation of the movements of artisan products and
peasant crops, etc. They did this by means of the inland bill of exchange,
known as the hundi, and by the indigenous form of commission agency,
known as the arhat. Operations in the bazaar enabled merchants and bankers
to accumulate capital and forge long-distance connections in the inland
market. Such connections were to prove crucial when they went into industry.
They did so on a broad basis in the period from the outbreak of the First
World War to the advent of independence. The specific process by which
bazaar bankers and merchants took to industrial investment has been
thoroughly researched.
Impact of British on Indian Industry On some intensely debated issues,
an agreement is still to emerge, especially as regards the impact of British
capital and British government on the development (or underdevelopment) of
Indian industry. One stream of thought associates the distorted pattern of
India’s industrial evolution with the colonial factor; the other minimises it
and seeks explanation in the low level of the Indian economy.
The first view dwells on the laissez faire economics of the Raj and the missed
opportunities of industrialisation in the nineteenth century. It delineates the
throttling system of monopoly that flourished in the high noon of empire, in
around 1900, and then goes on to show how the shaking up of the structure
after 1914 opened the way to a limited degree of industrialisation under
Indian initiative in the 1920s and 1930s.
As opposed to this stream of thought, the second school emphasises the
technological backwardness of the Indian economic structure as the major
factor blocking the sustained growth of investment in large-scale industry. By
and large, however, the explanation of backwardness is no longer sought in
the other worldly values of Indian civilization, the Hindu religious ethic, or
the institution of caste. Instead of resorting to uncritical generalisations about
values and customs, economic historians now pay closer attention to demand
and supply factors.