Railways weren’t Britain’s ‘gift’ to India—we paid with blood, sweat & humiliation

Lancashire cotton mill owners were eager to get access to the inland cotton-producing regions of India. Railway tracks penetrating into rural India would ensure this.

Representational image | Commons

The government agreed to all the conditions without a blink. It would acquire the land for the project at its own cost for the company, and would pay it a guaranteed return of 5 per cent on the capital. The company would not be answerable to the government, being wholly privately managed.

This preposterous agreement was signed in 1849 between the British colonial Government of India and two railway companies—the East India Railway (EIR) and the Great Indian Peninsular Railway (GIP).

Why would a government, even a colonial one, agree to a deal that made absolutely no business sense? Also, if these were the bare bones of the agreement, the fine print was likely to be far more alarming.

A lopsided agreement

Let’s look at the deal first. Historian Irfan Habib has shown how the agreement was one where the British-run railway companies laid down the conditions unilaterally.

• To begin with, the Government of India would have to acquire the land at its own cost, which it would then hand over to the railway companies for free.
• The companies would get an assured return of 5 per cent on the capital, even if they ran at a loss or made insufficient profit.
• In case a company decided to terminate its operations (which it could at six months’ notice), the government would refund the whole amount spent by it.
• If the government wished to buy the railway line, it would have to pay a price determined by the current market value of the company’s shares and not the value of its real assets. Purchasing at the current valuation could happen only after 99 years.

So why was such a demand made and why did the government agree?

The second question is easy to answer. The Government of India at that time was run by the English East India Company. The charter of the Company, on the strength of which they ruled India, was up for renewal in the British Parliament in 1853 and the directors knew that they were in no position to question or oppose any of these (extremely unfair) terms.

But why not?

This brings us to the first question—why was such a demand made? The first steam locomotive made the journey between Liverpool and Manchester in 1829. Within two decades, more than 9,000 km of railway lines had been laid in Britain and a large industry had grown around railway construction (e.g. manufacture of railway tracks, steam locomotives, signalling equipment etc.). This industry was looking for new markets to explore and India, as a British colony, provided a captive one.

Other business interests had a finger in the pie as well. Lancashire cotton mill owners, who wanted a smooth and regular supply of raw cotton, were eager to get access to the inland cotton-producing regions of India. Railway tracks penetrating into rural India would ensure this, as well as expand the inland market for British cotton goods. Imperial interests were not forgotten either, as troops could be moved swiftly to different parts of the country, to protect the frontier or to suppress rebellions.

Owners of the railway companies and the cotton mills were a formidable group in Parliament, particularly after 1858, when political control of India was transferred from the East India Company to the British government. For example,in 1860, there were 186 directors of various railway companies in both the Houses of British Parliament. Thus, the powerful railway lobby in Britain, through their presence in Parliament, compelled the government of India to accept scandalously exploitative terms to lay railway tracks across the country.

Railways weren’t a gift for India

The tracks were built on the blood and sweat of Indian tax-payers. From 1850 to 1898, India paid 126.6 million pounds in guaranteed interest to the railway companies. Despite this immense burden, what they got was a disorganised and exploitative railway system—

• Lack of a central plan meant lines were built on a variety of gauges, as per the immediate needs of the army, the Lancashire cotton lobby or the European tea planters. Independent India would have to bear a heavy cost in time and money to bring uniformity to the multitude of ‘broad gauge’, ‘meter gauge’ and ‘narrow gauge’ lines.
• There were 33 private companies, four government-controlled ones and five nominally run by the princely states. A national railway board, essential for a country as vast as this, would not be set up before the dawn of the 20^thcentury.
• Large chunks of territory were assigned to single companies, so freight and passenger rates were fixed on the basis of monopoly profit. Freight charges for short distances were disproportionately high as the companies preferred long-distance traffic.
• Racial segregation in reservation policies guaranteed that Europeans travelled comfortably in less crowded carriages while the Indian passenger paid for an overpriced ticket to travel in wretched conditions.
• The better-paid railway employees were all British. For example, every one of the top 105 officers in the railway companies with annual salaries of over Rs 10,000, were British,as were all the technical personnel (engine drivers, plate-layers) and supervisory staff (ticket-checkers). Replacing them with Indians would have provided employment and reduced running costs (as Europeans received far higher salaries). Moreover, the Indian customers faced systemic racial discrimination from the White-only staff at every stage of their journey.
• The whole point of investing in railway networks in India was to find a ready market for British railway-related manufacturers. So other than coal and the ballast for the railway tracks, every piece of equipment was imported from Britain. The amount paid by India to British manufacturers for ‘railway materials and stores’ more than doubled in 30 years (from Rs 2.09 crore in 1867 to Rs 5.35 crore in 1897). The railway companies would brook no competition from India in this field — they refused to allow their own repair works (for example, the one at Byculla, Mumbai) to manufacture railway engines even though they had assembled one successfully as far back as 1865. So skilled were the Indian mechanics that a law was passed in 1912 in British Parliament specifically banning Indian railways workshops from designing and making locomotives.

Introduction of the railways has been consistently cited in defence of the British Indian Empire. The spread of the network did bring benefits —ranging from ease of communication to help in tackling famines. But two aspects should not be forgotten.

First, the benefits were a by-product, a set of unintended outcomes. In no way were they the priority of the British.  British investment in the railways was driven by self-interest; by contrast, irrigation, which would have benefitted millions of farmers, was largely neglected. In 1902, 226 million sterling was spent on the railways while irrigation received just 24 million sterling.

The railways weren’t a ‘gift’ to India from the benevolent British colonial authorities; every foot of the lines was paid for by the ordinary Indian in blood, sweat and untold hardship and humiliation.

Dr. Krishnokoli Hazra teaches History at the undergraduate level in Kolkata. Views are personal.

(Edited by Zoya Bhatti)