INDIAN RAILWAYS AND FAMINE 1875-1 914: Magic Wheels and Empty Stomachs

Stuart Sweeney, Lady Hall
Policy-makers interpreted famines in nineteenth century British India as problems of distribution, rather than food production. Railways provided speedier and cheaper transport than road methods employed during that time. They were more reliable than canals, which needed rainfall to facilitate transport. However, they were expensive to construct and maintain, and the British offered various levels of state support to encourage private investors under the façade of laissez faire capitalism. The
more » ... re capitalism. The effectiveness of the largest investment program in the history of the British Empire, in combating appalling famines, was questionable. There was a failure to overcome acute price increases in wheat and rice, and morefundamentally, deindustrialization and poverty in India, all of which colonial railways encouraged. By design, British economic policy in India would involve no cost to Britain. In fact, Britain hoped the "drain" of wealth from the subcontinent would fund the cost of the administration both in India and in Whitehall, the cost of the Indian army, and the infrastructure needed to extract raw materials and foodstuffs from India and sell British manufactures to the Indian market.' Indian railways were the single largest expense in this infrastructure, and the most significant investment program in the history of the British Empire. The railways absorbed over £200 million up to 1914. Until 1869, government guarantees for private rail companies had been used to finance Indian railways, but then these were abandoned in favor of simple "on balance sheet" finance by the Government of India (GOl). This did reduce rail construction costs, but by the late 1 870s, GOT expenditure increased because of the Second Afghan War and costs related to Indian famines. The London-based India Office reluctantly returned to guarantees of coupon and dividend payments to keep rail costs "off balance sheet' The India Office gave railways high priority because of their use for both military purposes and famine relief. 1 47 Sweeney