INTERNATIONAL LABOUR OFFICE

WARTIME LABOUR CONDITIONS
AND

RECONSTRUCTION PLANNING
IN

INDIA

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MONTREAL
1946

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STUDIES AND REPORTS
New Series No. 2

PUBLISHED BY THE INTERNATIONAL LABOUR OFFICE,
3450 Drummond Street, Montreal 25, Canada

Published in the United Kingdom for the INTERNATIONAL LABOUR O F F I C E

by P. S. King & Staples Ltd., London

Distributed in the United States by the INTERNATIONAL LABOUR

Washington Branch, 734 Jackson Place, Washington, 6, D.C.

OFFICE,

PREFACE
Early last year I deputed two officials of the International
Labour Office, Mr. Maurice Stack and Mr. Raghunath Rao, to
proceed to India, in response to a request from the Department of
Labour of the Government of India, for assistance in the examination of a scheme of health insurance for industrial workers, drawn
up under the auspices of the Department. I asked Mr. Rao while
in India to review and complete the information on the impact
of the war on conditions of labour in India and on reconstruction
planning in that country which the International Labour Office
had been collecting. Mr. Rao has embodied the results of his study
in the following pages. It is intended to be no more than a brief
presentation of information on wartime conditions and on plans
for social and economic improvement after the war. But even
within these limits it seems to be well suited to serve as an introduction to the systematic consideration of labour conditions in
Eastern countries, and its publication at this time to be particularly
opportune in view of the widespread interest which conditions in
those countries now evoke.
It may be added that the International Labour Organisation
has from its inception devoted a great deal of attention to the improvement of labour conditions in Eastern countries. The war
necessarily interfered in many ways with its work in this connection,
but it has now become possible for it to resume its efforts in a
more systematic way. The Governing Body of the International
Labour Office has decided to hold a Preparatory Asiatic Regional
Conference in India in 1947 and the First Asiatic Regional Conference in China in 1948, and these Conferences may be expected
to prepare the way for an intensification of the activities of the
Organisation in that region.
This study was prepared with the aid of material obtained from
the Department of Labour as well as other Departments of the
Government of India and from the Indian Branch Office of the
International Labour Office; the unsparing assistance received from
these sources is gratefully acknowledged.
E. J. PHELAN.

CONTENTS
Page
PREFACE

i

Part I.

Wartime Labour Conditions

I. The Impact of the War
II. The Food Situation

1
8

I I I . Wartime Industrial Development
Textiles
Leather
Chemicals
Heavy Industries
Other Industries
IV. Organisation of Labour Supply

16
16
20
21
22
25
29

V. Industrial Relations

38

VI. Conditions of Work

44

V I I . The Remuneration of t h e Worker
VIII. Wartime Evolution of Labour Policy
Part II.

56
63

Reconstruction P l a n n i n g

I X . The Central Government's Proposals
General Objectives of Planning
The Financial Position
The Constitutional Position
Method of Planning
The Employment Policy
X. Summary of Plans Prepared by the Central Government
Resettlement and Re-employment of Former Servicemen
Adaptation of War Industries to Peacetime Production
Trade Policy
Industrial Development
Transport and Communications
Development of Electric Power
Mining Development
Irrigation, Waterways, Drainage, etc
Food Policy
Agriculture, Forests and Fisheries
Education
Public Health and Medical Services
Scientific and Industrial Research
X I . Provincial Governments' Plans
XII. Indian State Governments' Plans
XIII. Industrialists' Plan
The "Bombay Plan"

69
71
72
74
75
75
77
77
78
78
79
83
87
88
88
89
90
92
93
94
96
101
102
102

XIV. Trade Union Proposals
Recommendations of the All-India Trade Union Congress
The "People's Plan"

107
107
107

Part 1
WARTIME LABOUR CONDITIONS
I
The Impact of the War
For an adequate appreciation of the impact of the war in India,
some understanding of the essential features of the Indian economy
is indispensable. These may be briefly described. The country,
which measures about 2,000 miles from north to south and 2,100
miles from east to west and extends over 1.57 million square miles
in area—about three times the size of France, Germany and Italy
put together—is frequently referred to as a subcontinent on account
of its dimensions and diversity. Geographically it is so situated
as to be equidistant from western Europe through the Suez Canal
and from the Far East through Singapore, as also from south-west
Australia to the south-east and South Africa to the south-west.
It has an extensive land frontier of about 4,600 miles and a long
coastline of approximately 4,300 miles.
It possesses mineral
resources and raw materials of various kinds as well as a developing
industry, although the great majority of the population, estimated
to total rather more than 400 million at the present time, are
mainly dependent on agriculture. 1
Unlike the New World, the country has long been settled and
has inherited from old times ways of life which are only slowly
'According to the 1941 Census, the total population of India was 388,997,955,
of whom 339,301,902 were classified as rural. These and other figures given
in this section of the report have been taken mainly from the following publications: INDIA O F F I C E : East India {Census 1941); Abstract of Tables giving the main
Statistics of the Census of the Indian Empire of 1941, with a brief introductory
note (Cmd. 6435, London, H.M. Stationery Office, 1943). LEAGUE OF NATIONS:
Statistical Year-Book, 1942-44 (Geneva, 1945) ¡OFFICE OF THE ECONOMIC ADVISER,
GOVERNMENT OF INDIA: Statistical Summary of the Social and Economic Trends
in India {in the Inter-War Period), by S. SUBRAMANIAN (Delhi, 1945); and Sir
Purshotamdas THAKURDAS and others: A Plan of Economic Development for India
(Bombay, 1944).

2

WARTIME LABOUR CONDITIONS IN INDIA

yielding to the exigencies of today and are being gradually—almost
imperceptibly—adapted to modern conditions. Its long and tumultuous history (the beginnings of which, according to information
now available, clearly date back as much as fifty centuries) has
resulted in a complicated social structure—usually described as a
plural society—which consists of several groups, each with its
own social traditions carefully conserved, dwelling together in a
common polity. Such social isolationism cannot and does not
survive the corrosive cosmopolitanism of modern city life, but
those who are affected by influences of this kind still form only a
very small proportion of the total population. For the great
majority, social life continues to be confined to narrow traditional
grooves, only slightly touched by the march of time.
A few figures may be cited by way of illustration. According
to the census of 1941, there were in that year only 23 cities in India
with a population of 200,000 or more, and the urban population
amounted to no more than 13 per cent, of the total, whereas before
the outbreak of the war the proportion of the urban population
to the total was 49 per cent, in France, 53.7 per cent, in Canada,
56.2 per cent, in the United States of America, and 80 per cent.
in England and Wales. The railways in India before the war
totalled 41,000 miles, as against 190,000 miles in continental Europe
(excluding Soviet Russia) with an area of 1,660,000 square miles.
In India there are 35 miles of roads per 100 square miles, while the
corresponding figures for the United Kingdom and the United
States are respectively 200 and 100 miles.
Industrial development in India has undoubtedly made much
headway, particularly as a result of the two World Wars, but
organised industry—or large-scale industry regulated by factory
legislation—railways, mines and plantations have so far been able
to absorb hardly 3 per cent, of the total working population.
Indian industry was severely hit by the economic depression
during the inter-war years, and the Second World War revealed
the weaknesses of its rather haphazard growth and its total dependence on supplies from abroad for some of the vital parts of
its essential structure, such as motors and machine tools. The
larger urban centres are still far more commercial entrepots in
character than manufacturing areas properly so called.
Notwithstanding the predominantly rural character of the Indian
economy—as much as 70 per cent, of the population is dependent
on agriculture—agricultural productivity is low, even by Asiatic
standards. Apart from those engaged in growing cash crops such
as jute, cotton and oilseeds or tea, rubber and other plantation
produce, which form an important part of the country's exports

THE IMPACT OF THE WAR

3

and the prices for which are set by the world markets in these
commodities, agriculturists are, for the most part, subsistence
farmers with small scattered holdings, laboriously eking out a
bare livelihood from the land and possessed of only a small margin
for supply to the local markets. By far the larger part of the food
supply for the population is made up of the accumulation of scant
quantities offered for sale by millions of poor farmers, who have
little or no inducement for the improvement of their primitive
ways of cultivation in the existing conditions of land tenure, the
organisation of rural credit and marketing, and agricultural economics generally. During the years 1930-31 to 1934-35 the average
annual yield of rice per hectare in India was 14.3 quintals, as compared to 14.9 quintals in the Netherlands Indies (Java and Madura),
23.8 quintals in the United States, 25.2 quintals in China and 35.5
quintals in Japan. During the four years 1930-1934, the average
annual yield of wheat per hectare was 7.1 quintals in India, 7.2
quintals in the U.S.S.R., 8.2 quintals in Australia and 9.1 quintals
in Canada, and the average annual yield of cotton per hectare was
0.9 quintals in India, 1.7 quintals in Brazil, 1.9 quintals in the
U.S.S.R., 2.1 quintals in the United States and 4.6 quintals in
Egypt.
The low agricultural productivity, combined with the comparatively small extent of industrial production, has naturally
resulted in making the per capita income in India one of the lowest
in the world. For 1931 this has been estimated at approximately
65 rupees in British India, as compared, in Indian currency, to
1,406 rupees in the United States, 980 rupees in the United Kingdom, 792 rupees in Australia, 621 rupees in France and 218 rupees
in Japan.
It follows that the standard of living is also very low. Dr.
Aykroyd, Director of the Nutrition Research Laboratories,
Coonoor, South India, has placed on record his view that "the
majority of the population lives on a diet far remote from the
most moderate standards of adequate nutrition". The per capita
consumption of cotton piece goods in India in 1929 was 16.1 yards,
as compared to 21.4 yards in Japan, 30.6 yards in Malaya, 19.1
yards in Egypt, 18.9 yards in Brazil and 64 yards in the United
States. 1 It has been calculated that only 4 per cent, of the
population live in conditions which ensure reasonable privacy and
domestic seclusion. Excessive crowding is the rule, especially in
the older industrial areas as, for instance, Bombay, where in 1938
1
1 . L. O.: The World Textile Industry: Economic and Social Problems (Studies
and Reports. Series B, No. 27. Geneva, 1937), Vol. I, p. 168.

4

WARTIME LABOUR CONDITIONS IN INDIA

the average floor space per person was 27.58 square feet. In 1939
in India there was only one hospital and dispensary for 41,000
persons and only one bed for 4,000 persons. In the same year
there was only one doctor for 9,000 persons and one nurse for
86,000 persons, as compared to one doctor for 776 persons and
one nurse for 435 persons in the United Kingdom. In the early
1930's the expectation of life in India for males and females was
26.91 and 26.56 years respectively; the corresponding figures for
Canada were 58.96 and 60.73 years, far Australia 63.48 and 67.14
years, for the United Kingdom 58.74 and 62.88 years and for Japan
46.92 and 49.63 years respectively. Illiteracy is widespread; the
proportion of persons able to read or write in any language is only
13 per cent, of the total population.
I t is necessary to bear this background in mind in determining
the nature of the impact in India of a total war from the west and
from the east and in assessing the effort made by the country to
meet this unprecedented emergency, for which it was very little prepared. All the drawbacks of an undeveloped economy had to be
contended with—the lack of social mobility, the dearth of skilled
personnel, the limitations on the fabrication of the tools of war,
the difficulty of organising large numbers of men for the war effort
and, not least, the maintenance of the morale of a depressed
population. There were, moreover, other obstacles in the way of
the organisation of the country for the war effort, not so evident
but not the less detrimental on that account: those inherent in a
recently decentralised and too loosely knit polity whose future had
become a theme of acute controversy; and in the character of the
administrative personnel, which was not trained for and was
unaccustomed to the mobilisation of men and resources for a concerted drive for the purpose of increasing production.
On the eve of the outbreak of the war, the country had hardly
recovered from the economic depression of the 'thirties, as will
be seen from the following table, which gives the index number of
wholesale prices for various countries for the years 1930, 1935 and
1938 (base: 1928 = 100):
Australia
Canada
India
Japan
United Kingdom
United States

1930

1935

1938

92.7
90.6
82
82.3
87.5
90.7

80.6
75.4
65
84.4
77.9
83.9

88.9
82.2
68
114.3
88.8
82.5

For almost a decade up to the outbreak of the war, India's
favourable balance of trade had tended to fall, and foreign obliga-

THE IMPACT OF THE WAR

5

tions had been largely met by the export of gold. Although the
country is normally an importer of gold, during this period it sent
abroad large quantities of the precious metal, derived from condesirable numbers of agriculturists, who, in accordance with
custom, had invested their small savings in jewelry and had been
forced to part with it in order to meet the fixed charges and essential
requirements for the payment of which their current earnings were
totally inadequate. While the index number of the prices of exports
from India, consisting largely of raw materials, fell from 100 in
1927-28 to 57.3 in 1935-36 and 55.1 in 1938-39, that of the prices
of imports into India, mainly made up of manufactures, did not
decline in the same proportion, and moved only to 64.4 in 1935-36
and 67.4 in 1938-39.1 The agricultural depression had the effect
of shrinking the market for indigenous industry, and although the
larger (steel, sugar, match, cement, glassware and other) industries
benefited from protection, the unorganised smaller industries,
including handicrafts, which employ a large number of persons,
were hard hit.
The immediate effect of the war was an improvement in the
economic situation. Within the first three months of the outbreak
of the war agricultural prices rose by 40 per cent. Industry also
showed improvement, and the index number of industrial production (1935 = 100), calculated by the commercial publication Capital,
of Calcutta, rose from 112.7 in 1938-39 to 113.9 in 1939-40.2 Foreign
trade received a setback in the first few months of the war on account
of the diversion of the normal currents, but thereafter registered
an improvement; the excess of exports over imports was 173.8
million rupees and 488.2 million rupees for 1938-39 and 1939-40
respectively.
In 1940 agricultural prices showed a declining trend, as a result
of the recession caused by the lull in active military operations.
The official and public attitude to the problem of price control
at the time was one of disappointment that the earlier trend of
a rise in agricultural prices had not been maintained and of noninterference with the process of agricultural recovery. But with
the entry of Japan into the war and the fall of Malaya and Burma
in quick succession, the imports of rice from abroad were cut off,
the uncertainties of the war were accentuated, and agricultural
prices rose rapidly.
1
Statistical Abstract for British India, 1943 (Cmd. 6441, London, H. M.
Stationery Office, 1943), table No. 265-A.
2
The index of production (1935 = 100) of steel was 112 in 1938 and 137 in 1940;
cotton manufacture, 120 (1938) and 119 (1940); coal, 121 (1938) and 125 (1940);
pig iron, 107 (1938) and 137 (1940); and paper, 123 (1938) and 178 (1940).

6

WARTIME LABOUR CONDITIONS IN INDIA
INDEX NUMBERS OF PRICES IN INDIA, 1 9 3 9 - 1 9 4 4
(August 1939 = 100)

Year

Food
and
tobacco

Other
agricultural
commodités

Raw
materials

All
primary
articles

Manufactured
articles

General
index

1939-40
1940-41
1941-42
1942-43
1943-44

118.5
107.4
122.0
172.0
294.4

157.4
113.3
129.9
157.3
217.0

119.3
121.5
146.7
165.6
185.1

124.3
113.5
132.4
165.5
233.4

131.9
120.4
154.4
190.6
237.3

126.0
114.9
136.8
171.4
237.3

Source: RESERVE BANK OF INDIA: Report on Currency and Finance for 19AS-4h, Statement II, p. 75.

After 1942 India felt the full impact of the war from the west
and from the east, and the country was a principal base of operations in both directions. Accordingly, the demand for products
of all kinds steadily increased. Employment expanded. The
Indian armed forces increased in numbers from the pre-war strength
of under half a million to over two and a half million. Attached
to them were a considerable body of semi-skilled or unskilled
workers, recruited from many parts of the country and employed
on various construction projects. The number of persons employed
in organised industry also increased; and handicrafts and other
unorganised or less well-organised small-scale industries were,
moreover, pressed into service in the furtherance of the war effort,
with the result that their level of employment likewise went up.
As a result of increased industrial activity it was urgently
necessary to regulate industrial employment. The public authorities took steps to regulate industrial relations and promote
labour welfare. Measures were likewise taken to increase the supply
of skilled workers and to facilitate the mobility of unskilled labour.
One effect of the expansion of employment, combined with the
diversion of a good part of the local production to war supplies
and the reduction or cessation of imports was a shortage of consumption goods, including food and clothing. This shortage, in
the absence of an adequate system of price control and rationing,
led to a sharp rise in prices. The uncertainties of the war and the
reluctance of producers and middlemen to part with their stocks
added to the difficulties of the situation. Another factor was the
system by which the United Kingdom Government financed the
purchase of goods and services in India for the Allies, by providing
sterling securities against which the Reserve Bank of India issued
currency. In the existing conditions, in view of the shipping
difficulty and the reduction in imports, this method was perhaps
unavoidable, but it brought about a considerable and continuous

THE IMPACT OF THE WAR

7

increase in the volume of the currency in circulation and gave rise
to inflation x.
The strain on the Indian economy has consequently been very
considerable 2 , and although the war opened new avenues of social
progress in the country, it led at the same time to the imposition
of a heavy burden on the large majority of the working population.
It has been estimated, for instance, that 74 per cent, of the population of Bombay and 66 per cent, of that of Cawnpore live in oneroom tenements; and that 15 persons to a room is not uncommon
in many parts of Bombay. Not only has accommodation been
rendered scarce, but the supplies of food, clothing and drugs and
medicines have become wholly inadequate for civilian needs.
While it is of course true that such shortages are common to all
belligerent countries, it has to be remembered that the pre-war
standard of living in India was one of the lowest in the world and
left little margin for sacrifices of this kind. The situation has
served to bring home to the authorities and the people alike the
urgent need for a considerable improvement in production as well
as distribution, so as to raise the standard of living of the people
and enable the country to deal adequately with such emergencies
in the future. To this end, the Central, provincial and Indian State
Governments, as well as workers' and employers' representatives,
have prepared and published numerous projects. Similar projects
have also been or are in process of being drawn up by prominent
publicists and by public bodies, including the leading political
parties. Underlying all of them, despite their differences, is the
conviction that no substantial improvement in the Indian social
fabric can be effected on the prevailing low standards of life and
work. But higher standards, if they are to be broad-based and
widespread, cannot of course be attained with spectacular rapidity,
and they may well call for the purposeful reorganisation of the
national economy. There is ample evidence, however, that the
implications of this process are appreciated in responsible circles of
all shades of opinion in the country and that there is a valuable
opportunity at the present time for the commencement of concerted
efforts for economic and social progress.

1
On this point, see "Wartime Inflation in India and its Social Repercussions",
in International Labour Review, Vol. L, No. 6, Dec. 1944, pp. 736-750.
1
On the impact of the war in India from the general economic point of view,
reference may be made to the Eastern Economist (New Delhi), which has published
several valuable notes on the different aspects of the question. See also, P. S.
LOKANATHAN: India's Post-War Reconstruction and Its International
Aspects
(New Delhi, Indian Council of World Affairs; Bombay, Calcutta, Madras,
London, Oxford University Press, 1946)—an illuminating review of the situation,
which was, however, received after this report had been sent to the press.

II
The Food Situation
The primary requirement for a thriving working population in
any country is an adequate supply of food, and by far the gravest
revelation of the impact of the war in India has been the inadequacy
(even in normal times) of the food supply for the population, and
the consequent need to take urgent steps to ameliorate the situation.
The reasons for the wartime scarcity of foodstuffs are numerous.
The more obvious ones, such as the cessation of imports, the
dislocation of transport facilities on account of the demands made
by military traffic, the accordance of priority for supplies to the
armed forces, whether within the country or in foreign parts devoid
of the necessary facilities to provision them, the emergence of
clandestine markets for trade in essential foodstuffs, or the waste
occasioned by military decisions which had to be taken in haste in
rapidly changing situations, are all factors incidental to war and in
some measure common to all belligerent countries.
The less obvious factor, and one which may be said to have
been widely and fully appreciated only since the tragedy of the
famine in Bengal, is the lack of an adequate supply of food for the
population even in normal times. Until then, the low agricultural
productivity of the country and intake of foodstuffs per head of
the population apparently tended to be regarded merely as a
problem of general poverty, a price problem to be resolved by
the interplay of economic forces regardless of its social implications.
There has been no appreciable increase in food production in
India in recent years. The net available food supply increased
by only 23 per cent, during the period 1910-15 to 1934-35. 1 In
the four years 1939-40 to 1942-43, which showed little deviation
from the trend in previous years, the total annual amount of the
principal food grains available for consumption was 55.3, 51.2,
52.2 and 53.6 million tons respectively. 2 On the other hand, the
population increased by 10.6 per cent, (about 32 million) during
the decade 1921-31, and by 15 per cent, (about 51 million) in the
following decade. 3
1
Cf. Radhakamal MUKERJEE: Food Planningfor Four Hundred Millions (London,
Macmillan and Co., 1938).
2
INDIA OFFICE: India {Food Situation 1943) (Cmd. 6479, London. H.M.
Stationery Office, Oct. 1943).
3

East India (Census 1941). op. cit.

THE FOOD SITUATION

9

Although Indian agricultural statistics are admittedly largely
conjectural, it may be mentioned that, so far as those areas from
which returns are regularly received are concerned, the total amount
produced annually of seven major food grains is estimated at
50-53 million tons and the total annual consumption at 54-55
million tons. But these over-all estimates leave out of account
inter-regional differences, which are great, and the no less considerable changes from year to year because of weather conditions.
These changes may amount to as much as 10 per cent, or more of
the total and affect the adequacy of the food supply. In normal
times the import of rice from Burma and the rapid transfer of
supplies from surplus to scarcity areas by making full use of the
transport facilities prevented local shortages from taking an acute
form.
With the occupation of Burma by the Japanese, however, not
only was the usual import cut off, but the transport of food supplies
was impeded because of the putting out of use of small craft employed on the inland waterways in east Bengal, as a precautionary
defensive measure, and of the pressing need to divert a great deal
of the railway traffic to the transport of military supplies. Producers
as well as the public authorities in the surplus provinces (provinces
with stocks in excess of their own immediate requirements), which
were greatly influenced by the uncertainties of the war, were loth
to part with their stocks, and the Central Government was hesitant
or reluctant to seek or to use powers to constrain those provinces
to give their due to a common pool from which the scarcity areas
might be assisted. Prices of food grains rose enormously in certain
areas in consequence, more particularly in Bengal, where, as is
well-known, famine conditions prevailed in 1943. According to
an estimate made by a Commission of Investigation appointed by
the Governor-General in Council, the Bengal famine seriously
affected one tenth of the population of the province—six million—
of whom not less than a million and a half lost their lives.
The Commission, which does not hesitate to criticise the administrative shortcomings of the provincial and Central Governments in dealing with the regulation of the food supply, to which
the famine is mainly attributed, concludes that the economic level
of the population previous to the famine was low in Bengal, as in
the greater part of India. Agricultural production was not keeping
pace with the growth of the population. There was increasing
pressure on the land, which was not relieved by compensatory
growth in industry. A considerable section of the population was
living on the margin of subsistence and was incapable of standing
any severe economic stress. Parallel conditions prevailed in the

10

WARTIME LABOUR CONDITIONS IN INDIA

health sphere, standards of nutrition were low and the epidemic
diseases which caused high mortality during the famine were prevalent in normal times. There was no "margin of safety" as
regards either health or wealth. These underlying conditions,
common indeed to many other parts of India, were conducive
to the occurrence of famine, accompanied by high mortality. x
The difficulties in the way of designing a satisfactory system
of price control of food grains in the conditions in India are, however,
not to be underestimated. The large size of the country, with its
several hundred thousand rural centres drawing their supplies of
rice and other food grains, except perhaps wheat, from the meagre
surplus of many times that number of small cultivators, is only
one of them. No less formidable from an administrative point of
view is the autonomy of the provinces and of the Indian States.
In all matters of internal administration the Indian States may
determine their own policies without reference to any external
authority, while in the case of the provinces, since 1937, when
the existing Constitution came into force, agriculture is under
their direct control, as it is a "provincial" (or "State", as distinct
from "federal") subject, with the Centre possessing n o more t h a n

co-ordinating powers subject to the previous consent of the provinces. Before the tragic experience of Bengal drove the Central
Government to assume a vigorous initiative in the vital matter
of the regulation of the country's food supply, there was a long
period of trial and error, the history of which is perhaps not without interest, in as much as it throws some light on the need for
a directing central authority.
Within a few days of the outbreak of the war the Central
Government issued a notification under the Defence of India
Rules empowering the provincial Governments to control the prices
of essential commodities, including foodstuffs. The first price
control conference, consisting of representatives of the Central,
provincial and State Governments, was held as early as October
1939, and it recommended that no action should be taken to regulate
the prices of primary products, mainly so as to avoid interference
with the process of agricultural recovery. In June 1940, when
the second conference was held, agricultural prices, far from
advancing rapidly, tended to decline after the first favourable
reactions following the declaration of war. The Conference prudently decided that while the Central Government might, if necessary,
take steps, with the consent of the provinces, to control the primary
1
Cf. FAMINE INQUIRY COMMISSION: Report on Bengal (New Delhi, Government of India Press, 1945).

THE FOOD SITUATION

11

wholesale market prices, the control of retail prices should be left
to the provinces. Once more it was not felt expedient that agricultural recovery should be impeded by the introduction of control
measures.
The third conference was held in October 1941, when the same
reluctance was manifested to let the Centre take control measures.
Having regard, however, to the fluctuations in the price of wheat,
the Central Government extended the powers of the provinces
(under the Defence of India Rules) to deal with emergencies. It
further fixed the maximum prices of wheat, in accordance with
the recommendation of the second conference, and requested
the provinces to take appropriate action in respect of the retail
markets.
The price situation deteriorated at the end of 1941, when Japan
entered the war. The Central Government cautioned the provinces
against the building up of their own separate reserves of food
grains, but some of them had already begun to restrict the
movement of food grains outside their boundaries.
The fourth conference, which met in February 1942, recommended the removal of the prohibition against interprovincial
exports; deprecated the building up of separate stocks of food
grains by individual provinces; considered that the administration
of price control should be left to the provinces; and suggested that
the Central Government should set up an appropriate organisation
to ensure the equitable distribution of food supplies between
surplus and scarcity provinces.
The fifth conference was held in April 1942. Its conclusions
were that scarcity provinces might with advantage build up their
own stocks of food grains; that it was not necessary to control
the price of rice; that while the Central Government should institute a system of licences for wholesale dealers in food grains,
the licensing of retail dealers should be left to the provinces; and
that the ordinary channels of trade should not be interfered with
by control measures.
The price of wheat, however, continued to rise, with the result
that in May 1942 the Central Government issued the Wheat
Control Order, prohibiting the interprovincial movement of
wheat without a permit, and the Food Grains Control Order,
providing for the licensing of wholesale dealers in food grains and
requiring them to submit periodic returns.
The sixth conference, held in September 1942, recommended
the employment of a single agency for all civil defence purchases;
the prohibition of the export of wheat on private account from the
surplus provinces; and the institution of suitable arrangements
2

12

WARTIME LABOUR CONDITIONS IN INDIA

by the Central Government for the purchase of food grains from
the surplus provinces for distribution in the scarcity provinces.
In July 1942, in accordance with the recommendation of the
fourth price control conference, the Central Government set up
a Food Advisory Council, consisting of representatives of the
Central, provincial and State Governments, to secure, co-ordinate
and disseminate information on the production and distribution
of food and to work out a policy on a national basis. It also established a Department of Food in December of the same year.
Between December 1942 and July 1943 three food conferences
were held. Once again, the provinces left no doubt that the control
of the agencies for the purchase of food grains should be vested in
them and that no maximum prices should be fixed. They agreed,
however, that the Central Government should arrange to secure
supplies from surplus provinces for distribution in scarcity provinces.
Accordingly, the control over the price of wheat was removed,
but the plan for the distribution of grain from surplus areas in
scarcity areas, which came into operation on 1 April 1943 and
was to have been in force for a period of twelve months, had to be
abandoned after three and a half months, mainly because the
necessary stocks were not forthcoming. The Central Government
was therefore constrained to declare the whole of north-east India,
including Bengal, a free trade area, leaving the procurement and
supply of food grains to be dealt with by the provinces among
themselves.
The result was that the shortages were accentuated, prices rose
and the situation generally deteriorated in the north-east. The
third food conference, which was held in July 1943, recommended
the abrogation of the free trade experiment. The Central Government accepted the decision, adopted a revised plan for procurement
and distribution and appointed a Food Grains Policy Committee
to advise on policy. The Committee made important recommendations, including the augmentation of the available supplies
by imports, the improvement of the procurement machinery, the
extension of rationing, the introduction of statutory price control
over a gradually increasing area, the amelioration of the machinery
of food administration and the readjustment of the relations between
the provinces and the Centre.
The situation showed marked improvement in 1944. The
experience of Bengal and the Allied military victories may have
been contributory factors. A good deal had also been done to lay
the groundwork for the determination and administration of
food policy, which, if it had been done earlier, might well have
reduced the extent of the distress caused by the dislocation of the

THE FOOD SITUATION

13

country's food supply. The system of price control was being built
from the bottom up on a provincial and regional basis, taking into
account the seasonal changes, with the Central Government
co-ordinating the control measures at the national level. A Price
Advisory Committee was established at the Centre, with the Economic Adviser as chairman. Cultivators were guaranteed minimum
prices by the Central Government, as for instance in the case of
wheat offered for sale in the markets of the Punjab, the United
Provinces and Sind. Similar guarantees were also offered for
replacing the cultivation of short staple cotton by that of millets.
Attention was directed to the improvement of storage facilities
and measures were taken to ensure that the improvement was
maintained. The machinery for procurement and supply was
likewise improved, and systematic advance plans were prepared
concerning the stocks and transport facilities needed. Rationing
was gradually extended, and the population covered in November
1944 was 42 million, distributed in some 460 towns. It was introduced even in rural areas such as British Malabar and the Indian
States of Cochin and Travancore. Regional food commissioners
were appointed to advise the Central Government of local shortages.
These measures, belated as they were, may well prove to be the
beginnings of a sound policy for the regulation of the country's
food supply, which will not be the less necessary in times of peace.
The urgency and importance of such measures have been particularly
stressed by the Famine Inquiry Commission, to which reference
has been made above. In its report it has made a number of
recommendations, which have been generally accepted by the
Government. In the opinion of the Commission, the period of
the transition to normal conditions may well last until 1951-52,
although its actual duration would depend upon a number of
factors, not all of them calculable. During this period, the organisation of food administration with a view to the evolution of a
system of price regulation is recommended, and the target suggested
for the initial phase is a price level of 240 per cent, of the average
for the five years ending 1938-39. The continued operation of
control measures during this phase is also recommended by the
Commission, but in the next stage the retransfer of responsibility
for the distribution of supplies from Government agencies to the
trade, subject, however, to safeguards to prevent the price level
from rising above 240 per cent, or falling below 180 per cent, of
the pre-war level, is suggested.
The Commission calls attention to the existence of much illhealth, disease and mortality in India due to malnutrition, and
emphasises that the hard core of the problem of agricultural prices

14

WARTIME LABOUR CONDITIONS IN INDIA

is the stabilisation of the prices of rice and wheat, which together
account for nearly a half of the total area under all food crops.
Intensive farming, the development of cottage industries, the
regional integration of agricultural and industrial activities, the
organisation by local bodies of public works schemes for rural
improvement, internal migration from overpopulated to underpopulated areas and large-scale industrialisation by the development of hydro-electric power are among the measures suggested
by the Commission to alleviate rural underemployment, which is
regarded as the most important of all rural economic problems. x
The Commission has thus emphasised the dual aspect of the food
problem: the augmentation of the total supply available for consumption and the enhancement of the effective demand by raising
the level of employment. Not unless both aspects of the question
are simultaneously dealt with would it be possible to ensure a
fairly even distribution of food supplies, essential for the improvement of the general standard of living.
In the course of a debate on the food situation in the Central
Legislative Assembly in January 1946, apprehension about the
adequacy of the food supply in the coming months, on account of
the adverse effect of seasonal factors, was expressed by the spokesman of the Food Department. He stated that a more complete
mobilisation of the internal resources of the country by the introduction and extension of some form of monopoly procurement,
the possible introduction of a levy on the bigger producers to
enable the Government to control a substantial quantity of grains
to the fullest extent possible, and the extension of rationing as
completely as practicable, particularly in the scarcity provinces,
the revision of the ration scale if unavoidable, and the strict
maintenance of price control were among the measures contemplated by the Government to meet the anticipated food
shortage. He recalled that the four main heads of the food policy
approved by the Famine Inquiry Commission were: the basic
plan, procurement, price control and rationing. A fundamental
weakness in this plan was the general unreliability of agricultural
statistics in most parts of the country, but progress had been
made in improving the methods and machinery for collecting statistics. The essence of the problem of procurement was the
acquisition of the maximum amount of food grains to be had from
the cultivator in all parts of the country. During the war there
had been a steady tendency on the part of the producer to consume
more and for the surplus available for marketing to be reduced.
'FAMINE INQUIRY COMMISSION: Final Report (Delhi, Government of India
Press. 1945).

THE FOOD SITUATION

IS

That was the principal explanation for the smaller surpluses made
available to the Food Department to meet the requirements of
scarcity areas. Another factor was the increasing population, at
the rate of 5 million a year, or in terms of consumption, the annual
increase in demand of 500,000 tons of food grains.
The speaker added, however, that viewed against the background of the price levels reached in certain parts of the country
in 1943, the progress made in the control of prices in accordance
with the Government's policy could be regarded as satisfactory,
despite the shortages. The total population rationed from the
central reserve (because of the difficulty of shipping during the
war, which had not made it possible to ship large quantities of
grain) already amounted to 53 million persons, distributed among
556 towns, including 90 with a population of 100,000 or more persons;
rationing was capable of fairly rapid extension and would be an
invaluable element in controlling the food situation. The figures
for food grain imports since October 1943 were: October-December
1943: 197,700 tons; 1944: 653,500 tons; 1945: 840,300 tons; and
1-21 January 1946: 62,700 tons.

Ill
Wartime Industrial Development
At the outbreak of hostilities in 1939 Indian industry was
hardly sufficiently well-developed to produce the newer types of
military equipment which were urgently required for the fighting
forces in the different theatres. During the greater part of the
critical period of the war, the distances separating India from
countries capable of providing the necessary machinery to enable
the production of such equipment and the consequent demand
on shipping—to mention only a single factor—were an effective
deterrent to industrial development on novel lines. Consequently,
the wartime expansion in production was for the most part confined
to industries which had been well-established before the war or
those which could be initiated largely, if not solely, with such
resources as the country possessed in respect of capital goods and
skilled workers. As the expansion took place, not in accordance
with a long-considered or well-co-ordinated plan, but in response
to the imperative demand of the military situation, it was necessarily
somewhat haphazard. The following notes give particulars of the
wartime development of some of the more important industries.

TEXTILES

1

The textile industry, which is one of the foremost industries of
the country, was well established before the war. The total production of cotton cloth for 1938-39 amounted to 5,608 million yards
(69.6 per cent, of which was produced by the mills and the remainder
by the handlooms) and of jute manufactures (including twist and
yarn) to 1,221,500 tons. As much as 46.24 per cent, of the total
value of exports by sea from British India during that year was
accounted for by manufactured textiles and raw materials for
textile manufactures. The indigenous mill industry provided
61 per cent., and the handloom industry, 25 per cent., of the annual
1
See also "Wartime Developments in the Indian Textile Industry", in International Labour Review, Vol. L U , Nos. 2-3, Aug.-Sept. 1945, pp. 176-195.
The information given in this section is based on various sources, including
Monthly Survey of Business Conditions in India (various issues), published by the
Office of the Economic Adviser, Government of India; Report of the Fact-Finding
Committee {Handloom and Mills) (Delhi, Manager of Publications, 1942); BOARD
OF TRADE : Report of the Cotton Board Committee to Enquire into Post- War Problems (Manchester, Nicholls and Co., Jan. 1944); G. W. TYSON: India Arms
for Victory (Allahabad, Kitabistan, 1943); and U. S. DEPARTMENT OF AGRICULTURE: Statistics on Cotton and Related Data (Washington, D.C., Dec. 1939).

WARTIME INDUSTRIAL DEVELOPMENT

17

average supply of cloth for the home market during the years
1934-35 to 1938-39.
Next to the United States, India is the largest raw cotton producing country in the world. The average annual production for
the years 1934-35 to 1938-39 was 4.7 million bales of 478 lbs. each.
During the war, however, as a result of efforts to increase the food
supply, a part of the land under cotton was diverted to the growing
of food crops, and the acreage under cotton declined by 21.7 per
cent, in 1943-44 as compared with the years immediately preceding
the outbreak of war. The consumption of Indian cotton by the
indigenous mill industry, it may be noted, increased from 3,106,300
bales (of 400 lbs. each) in 1938-39 to 4,344,600 bales in 1944-45—
an increase of 39.8 per cent.—and the export of raw cotton declined
from 2,702,800 to 318,600 bales during the same period.
The Cotton-Mill Industry
Notwithstanding the immense wartime increase in the demand,
both domestic and foreign, for textiles, there was no large increase
in the mill production of cotton cloth. The production of cotton
piece goods, which amounted to 4,269.3 million yards in 1938-39
and had remained much the same until 1942-43, increased to
4,870.6 million yards in 1943-44 (an increase of 14 per cent, over
the 1938-39 production). In the following year the production
declined to 4,706.7 million yards. 1 During the four years ending
1942-43, the number of spindles installed increased only from
10,059,370 to 10,130,568, while the number of looms declined
from 202,464 to 200,890. This fact, together with the wartime
shortages of coal and of skilled workers and the insufficiency of
mill stores and textile accessories, no doubt accounts for the scant
increase in the production of cotton goods. According to one
estimate, no less than 50 per cent, of the textile machinery would
need to be replaced after the war in the case of spinning machines,
power looms and sizing machines.
As a result of the wartime need for supplies to the armed forces
and exports to neighbouring areas for the satisfaction of their
pressing requirements, there was a sharp decline in the supplies
available for civilian consumption in the country. The purchases
by the Supply Department of the Government of India increased
from 300 million yards in 1939-40 to 1,000 million yards in 1941-42
1
It may be noted in this connection that during the years 1937-1942, the mill
production of cotton piece goods in the United Kingdom declined from 3,806
million square yards to 1,850 million square yards (excluding made-up goods),
while in the United States it increased from 9,321 million square yards to 12,000
million square yards, and there was also an increase in Canada from 245 million
square yards to 350 million square yards.

18

WARTIME LABOUR CONDITIONS IN INDIA

and 1,200 million yards (estimate) in 1942-43. Exports (including
re-exports), which increased from 192.7 million yards in 1938-39
to 857.6 million yards in 1941-42, declined, however, to 416.1
million yards in 1944-45. Imports, which declined from 647.1
million yards in 1938-39 to 3.7 million yards in 1943-44, amounted
to 5.2 million yards in 1944-45. The supplies available for civilian
consumption in the country declined from 4,723.7 million yards
in 1938-39 to 2,284 million yards in 1942-43, or by 51.6 per cent.
It is estimated that in 1942 alone the Indian cotton-mill industry
supplied the armed forces of the United Nations with 852 million
yards of cotton cloth and many miscellaneous items as well.
The Handloom

Industry

The total number of handlooms in the country was, according
to an estimate, 2 million in 1940, and 72 per cent, of the looms were
utilised for the manufacture of cotton textiles. The industry
produces approximately 1,600 million yards of cotton cloth annually 1 ,
and employs about 2.4 million full-time and part-time weavers and
3.6 million paid and unpaid assistants. Contrary to the usual
supposition, the great majority of handloom weavers are full-time
workers, and the industry, in which varying types of organisation
ranging from independent craftsmen to co-operative workshops
and small factories are represented, is in process of evolution and
reorganisation and is largely located in urban areas.
The war served to provide a respite for the handloom industry
from the encroachment of the indigenous mill industry. During
the First World War and the inter-war period the indigenous
mill industry expanded mainly at the expense of foreign imports,
but signs were not lacking that the handloom industry would lose
ground in the long run in the home market. Between 1921-25 and
1934-38, for instance, the mill production increased from 1,805
million yards to 3,433 million yards (90 per cent.), while the handloom production increased from 948 million yards to 1,394 million
yards (47 per cent.) and the shares of the mill industry and the
handloom industry in the total supply of cloth available for consumption in the country increased from 41 to 61 per cent, and from
24 to 25 per cent, respectively. It is evident that there was an
increase in the handloom production of cotton textiles between
the years 1938-39 and 1944-45, for during this period the amount
of mill consumption of Indian cotton increased by 39.8 per cent.
and the increase in the mill production of cloth was only 10 per
cent.
1
In the production of cloth by the handlooms, mill-made yarn is used to a
very large extent.

WARTIME INDUSTRIAL DEVELOPMENT

19

The Jute Industry
The country has a virtual monopoly of raw jute, which is grown
for the most part in Bengal. It has been estimated that the mills
in India consume no more than 20 to 25 per cent, of the jute produced in the country. The total number of such mills (including
1 in one of the French Settlements) was 110, with 68,528 looms and
1,369,821 spindles. The number of workers employed in the jute
mills was 310,624 in 1941. Exports are the mainstay of the industry,
which was greatly affected by the wartime shortage of shipping.
Between 1938-39 and 1944-45 the exports of raw jute declined
from 690,600 tons to 160,200 tons, or by 76.8 per cent. Exports of
jute manufactures (including twist and yarn) declined from 956,302
tons in 1938-39 to 619,282 tons in 1942-43, and rose to 708,184 tons
in 1944-45. The total production of jute manufactures declined
from 1,311,600 tons in 1938-39 to 975,000 tons in 1944-45, or
by 25.7 per cent. It may be added that the average annual acreage
under jute dropped from 2,980,000 acres during the years 1936-37
to 1938-39 to 2,602,000 in 1943-44, and there was a corresponding
reduction in the production of raw jute from 8,387,000 bales (of
400 lbs. each) to 6,949,000 bales.
Wool
Before the war the production of woollen and worsted cloth by
the organised mills industry amounted to approximately 7,310,000
lbs. annually. In 1938-39 there were 35 woollen mills in the country,
with 2,102 looms and 73,943 spindles in place. During the war all
woollen mills were employed in the manufacture of material for
the defence services; the Government undertook to provide the
raw material and to take over the entire production, which increased
to 27 million lbs. a year. It is believed that, provided that the
industry is reorganised, the wartime level of production can be
maintained, although for any further increase imports of machinery
would be necessary.
The woollen handloom industry in different parts of the country
produces various kinds of rough fabrics, as well as blankets and
carpets. These latter were much in demand abroad before the
war. During the war, however, the industry was called upon to
supply blankets to the armed forces. The total number of blankets,
according to military specifications, received for instance in 1943
was 543,214.
The woollen knitting industry produced before the war over
5 million pairs of socks and stockings and 1,644,000 garments
annually. The production was raised during the war to 1,225,000

20

WARTIME LABOUR CONDITIONS JN INDIA

pairs of socks and stockings and 425,000 garments a month, the
larger part of which was acquired by the Supply Department
of the Government for the defence services.
Silk
According to an authoritative estimate, in 1937 there were
105 silk weaving establishments in India. During the inter-war
period the industry was adversely affected by imports of raw silk
from abroad and even more in consequence of the popularity of
artificial silk. The demand for high-quality silk, which continued,
however, to be produced in various parts of the country for a
restricted internal market, increased during the war owing to the
need for large quantities of parachute cloth. Assistance in various
ways was provided by the Government, and the output of filature
raw silk in 1943 was estimated at 165,000 lbs. The production was
expected to reach 500,000-700,000 lbs. in 1945.
Clothing
The large-scale clothing industry is essentially a wartime
enterprise in India, wholly dependent on the demand for readymade garments for the defence services. There was only a single
Army clothing factory in the country in 1931, with a monthly
output of some 75,000 garments. The industry was greatly developed during the war and several new factories were established ;
the monthly average of garments produced in 1942-43 was nearly
10 million. An increasing demand for readymade garments is
expected after the war, and consequently it is believed that the
industry may be able to maintain itself.
Tentage
Before the war, only 5 firms in Cawnpore were engaged in the
manufacture of the special pattern tents required for the Army, but
in 1940, in response to the wartime increase in the demand for
tentage, 53 new factories were established in the vicinity of port
towns. The annual purchase of tentage for the armed forces before
the war, which amounted to one million rupees, increased to,
approximately, 10 million rupees in 1939-40, 85 million rupees in
1940-41, 130 million rupees in 1941-42 and 160 million rupees
(estimate) in 1942-43.
LEATHER

India's cattle population—230 million cattle and 104 million
sheep and goats—amounts to a third of the world total, and its

WARTIME INDUSTRIAL DEVELOPMENT

21

annual output of hides and skins has been estimated at 20 million
cow hides, 5.5 million buffalo hides and 44.5 million skins (goat,
kid and sheep). The output, however, is subject to much variation,
as the bulk of the hides is derived from animals which die a natural
death, and not from slaughtered animals as in other countries. As
much as 40 per cent, of the cattle hides and over 90 per cent, of
the skins were exported before the war, nearly half the cattle hides
only partially tanned.
During the war, as a result of the partial reduction in imports
and a very considerable increase in the demand for leather goods
for the defence services, there was a marked expansion of the
leather industry. The pre-war average production of "army
footwear" by the indigenous leather industry was approximately
100,000 pairs a year, while in 1943 it was called upon to produce
no less than 6.5 million pairs, in addition to harness and saddlery
in considerable quantity. In consequence, many new establishments came into existence. In addition, a large number of village
cobblers and small artisans in towns were engaged in the production
of leather goods. The leather industry has several subsidiary
industries, such as the tanning and grindery industries, and the
industry as a whole may be expected to retain many of its wartime
gains after the war, having regard to the expansion of the defence
services, the greater demand for leather goods from civilians and
the world shortage of footwear and leather goods generally.
CHEMICALS

Heavy Chemicals
As a result of the full use of the existing capacity for production
and of the installation of new plants, the production of sulphuric
acid rose from 40,000 tons to 93,000 tons a year. The output still
falls short of the estimated requirements after the war. Gypsum
is, however, found in abundance in various parts of the country
and it is hoped that it might be possible to use it as a substitute for
sulphur in the preparation of sulphuric acid.
The manufacture of caustic soda was begun only recently.
The present production, estimated at approximately 2,800 tons a
year, amounts only to a small fraction of the estimated minimum
post-war requirements.
Of the 11,000 tons of bleaching powder required annually, only
3,000 tons are at present produced locally.
About 90,000 tons of sodium carbonate are estimated to be
needed every year for the different industries, but the existing
capacity for indigenous production amounts only to 56,000 tons.

22

WARTIME LABOUR CONDITIONS IN INDIA

The requirements of sodium bicarbonate are estimated at 6,000
tons a year, and this quantity is at present being imported.
In order to meet the shortage of imports of potassium chlorate
during the war, its manufacture was started locally on a scale
sufficient to meet the requirements of the country, and it is anticipated that it will be possible to maintain this production.
Sodium sulphide was wholly imported before the war. A factory
is being set up and it is hoped that when it comes into production
it will be able to meet the greater part of the demands of the home
market at favourable prices in comparison with foreign prices.
The production of saltpetre during the war amounted, as before
the war, to approximately 11,000 tons a year, and it might be possible
to increase it to rather more than double that amount, provided
that there were a demand for it as a fertiliser.
The production of bichromate as well as that of chromic acid
was initiated during the war, and the former industry might be in
a position to meet demands for exports to neighbouring countries,
if properly reorganised.
Fine Chemicals
The fine chemicals industry in India is undeveloped, except
for the manufacture of tinctures and a few pharmaceutical preparations on a very small scale, most of them from imported
products.
There are only a few plants in the country for the
distillation of wood and coal tar, which are the basic raw materials
for the fine chemicals industry, and, during the war, in order to
procure locally supplies of a few chemicals urgently needed for the
defence services, the Supply Department of the Government of
India made emergency arrangements. Some of the improvised
industries might be expanded to meet post-war requirements.
Fertilisers
The indigenous production of fertilisers is small and rose from
25,000 tons in 1938-39 to 40,000 tons in 1942-43. It has been
suggested that the target for after the war should be not less than
two thirds of a million tons annually in order to augment the
food production.
HEAVY INDUSTRIES

Metallurgical
Although the Indian iron and steel industry was fairly welldeveloped before the war, it did not produce the special kinds of
steel required for armour plates, tools, wheels and axles and other

WARTIME INDUSTRIAL DEVELOPMENT

23

equipment of modern war. Nor had aluminium, copper, lead,
zinc, tin and other non-ferrous industries been developed to any
appreciable extent. During the war new technical processes were
initiated, as a result of which large quantities of guns, tanks, bombs
and other munitions were produced.
Before the war, apart from the production of some 6,000 tons
of copper per year employed in the manufacture of hot rolled brass
sheet, no non-ferrous industry of any importance existed in India,
although plans were put into execution for the setting up of aluminium smelters and rolling mills. Since the war began, a start
has been made in the production of aluminium, and two plants
have been established, which will eventually produce 7,000 tons
of aluminium in the form of sheet or ingot from indigenous bauxite.
On the virgin metal side, antimony and lead smelters have gone
into operation; the former are capable of producing at least half
of India's total demand.
At the outbreak of the war the pig iron made in India amounted
to about 1,750,000 tons a year, and the finished steel to approximately 750,000 tons a year. Rods and bars made by rerolling mills
probably amounted to 50,000 tons a year. The pig iron production
rose to 2 million tons in 1943, the production capacity for finished
steel to 1,250,000 tons in 1943-44 and the rods and bars production
to 222,000 tons in 1944. Steel production for ordnance requirements, estimated at 2,000 tons a year before the war, was 30,000
tons in 1944. The wartime expansion of the steel industry also
led to the development of the ancillary and associated industries,
including refractories and ferro-alloys and the tinplate, bolts,
nuts and rivets, steel castings and wires and wire products industries,
which might be expected to pave the way for further industrial
advance. The refining of non-ferrous scrap has developed considerably during the war years; the individual factories have nearly
doubled in number. In the processed metal sphere, the industry
has derived considerable stimulus as a result of the war and such
items as brass and copper sheet, rods and bars and lead pipes,
are among those which can now be produced in India.
Engineering
The Indian engineering industry is largely dependent upon
the programme of public works construction in the country. I t
prospered greatly in the in ter-war years until the depression set in,
when the public authorities resorted to a policy of restriction.
With the outbreak of war, however, the situation improved.
Production increased to unprecedented levels in all branches, except

24

WARTIME LABOUR CONDITIONS IN INDIA

a few which were wholly dependent on imports for indispensable
supplies, and new branches were founded in response to the war
demands. The membership of the Indian Engineering Association
rose from 58 firms with a total of 84,000 employees in 1939 to 87
firms with a total of 150,000 employees in 1943.
Hardly a hundred machines a year were made in India before
the war, but in 1943 the output, though confined to the simpler
type of machine tools, was 4,500.
Barely 10 per cent, of the
country's total annual requirements of hand tools—pickaxes,
shovels, chisels, hammers, screw drivers, spanners, twist drills,
wood-working tools—was produced locally in the pre-war years,
but the wartime expansion has enabled the industry to satisfy the
entire demand, except in the case of metal-cutting and woodworking tools, almost all of which are imported.
The mechanical engineering industry likewise benefited by
the war, and the production of such items as centrifugal and handoperated pumps, oil engines and weighing machines and jacks
increased appreciably.
Experiments in the manufacture of textile machinery were
made in 1941. The industry is still in an early stage of development.
On the other hand, the fabrication of dairy machinery, which
was also started during the war, being simpler would seem to be
assured of good post-war prospects.
Like progress was not made, however, in the manufacture of
road-making machines, in part because of the uncertainties of the
wartime demand and in part because of the insufficiency of essential
imports.
The structural engineering industry, which was well established
before the war, had a single-shift production capacity of 10,000
tons a month, but the pre-war output was below this figure, owing
to paucity of demand. However, as a result of war demands for
floating docks, prefabricated steel-frame buildings, aeroplane
hangars and bridges, the industry manufactured in the earlier part
of 1944 over 10,000 tons of steel structures a month. Wagons were
also made in India before the war to the extent of 2,500 to 3,000
annually, and efforts were made in wartime to increase the production by initiating the manufacture of rivets and axles and wheels,
which were formerly imported. Another wartime innovation
was the making of armoured vehicles, of which 4,803 were produced
up to March 1944.
The electrical engineering industry was also considerably
developed during the war. The production of fans, incandescent
lamps, lighting accessories, dry batteries and cells, secondary
batteries, distribution transformers, wires and cables and motors,

WARTIME INDUSTRIAL DEVELOPMENT

25

which was on a small scale before the war, was greatly increased.
In addition, the manufacture of black adhesive tapes, conduit
pipes and " D " class signalling cables was initiated.
Shipbuilding and Repairing
Although marked progress could not be made, because of the
wartime difficulties in securing the necessary facilities, the shipbuilding and shiprepairing industry made some advance.
From the beginning of the war up to Japan's surrender, 2,113
craft, including boats of all sizes, were built and at the end ¡of this
period 527 were under construction.
From the beginning of 1942 to 1 July 1945, a total of 8,234
merchant ships, representing a tonnage of 49,506,715 tons, were
repaired. In 1944, 780, and in 1945 up to 31 July, 477 naval vessels
of all classes were repaired b y commercial

firms.

These figures d o

not include a large number of vessels repaired by commercial
firms for the Coastal Forces or other services such as the Army
and the Royal Air Force, nor do they include the large amount
of maintenance required for harbour craft or the assembly of
prefabricated craft.
The temporary loss of sea communication by the shortest route,
the shortage of shipping space, and the heavy commitments of the
R.A.F. and U.S.A.A.F. in Europe, necessitated the establishment
of a wartime aircraft repair industry on a considerable scale. The
repair of airframes, aero-engines, armament equipment, instruments, radar and signal equipment and accessories had to be
developed. In addition, the manufacture of a proportion of airborne
and ground equipment, including spares, was undertaken for reasons
of urgency or short supply, or as a means of saving sea and air
transport.
OTHER INDUSTRIES

Cement
The Indian cement industry, which is well established, increased
its production from 1,532,748 tons in 1939 to 2,106,000 tons in 1943.
The larger part of the production during the war was used for
Government purposes, civil and military. The demands on the
industry, both for purposes of home consumption and for exports,
are expected to be such that it is likely to expand after the war.
The production of asbestos cement goods also received considerable
stimulus during the war.

26

WARTIME LABOUR CONDITIONS IN INDIA

Timber Industries
Heavy demands were made during the war on the saw-milling,
plywood, woodware and body-building (vehicles) industries, as
a result of which there was considerable expansion of all of them;
but owing to various factors concerning the structure of these
industries, it is thought that, with the possible exception of plywood,
they might not be able to maintain the wartime progress.
Drugs, Medicines and Dressings
Before the war the production of drugs in India was largely
confined to galenicals and proprietary medicines. Synthetic drugs
were produced only in meagre quantities. In 1940, in order to encourage the indigenous manufacture of medical stores, the Government set up a special committee. As a result of this initiative,
up to July 1942 as much as 68 per cent, of the requirements of
medical stores of the country was met by local production,
compared to 25 per cent, at the outbreak of war. The number
of items so produced rose from 1,745 in 1941 to 2,361 in 1942.
The surgical dressing industry likewise developed rapidly during
the war. Having regard to the wartime progress in the manufacture of alcohol and various chemicals, the post-war prospects
of the drugs and medicines industry are considered to be really
good.
Distilleries
The war provided a great stimulus to the production of alcohol
in India. The quantity distilled in 1942-43 was approximately
10.6 million gallons, a third of which was needed for the requirements
of the defence services.
Paints and Varnishes
Paints produced in India amounted to 24,740 tons in 1938
and 30,000 tons in 1942, and the production of varnish in 1943
was 400,000 gallons. As most of the raw materials necessary are
available in the country, it is considered that the supplies needed
for industrial development might be obtained locally.
Glass
With the exception of the glass bangles industry, which covered
80 per cent, of the domestic consumption, some two thirds of the
glass goods other than bangles were imported from abroad before

WARTIME INDUSTRIAL DEVELOPMENT

27

the war. India had¿no exports whatever of glass to neighbouring
countries. As a result of the wartime expansion of the industry,
it is hoped that ultimately some export will be possible.
Soap
The production of soap in India decreased during the war from
approximately 157,000 tons in 1938-39 to about 90,000 tons in
1943, largely because of the difficulty of obtaining a sufficient
supply of caustic soda from abroad. The industry is firmly established and expected to make good progress after the war.
Miscellaneous
Included in this group are a number of industries—cycles, rubber,
cutlery, crockery, enamelware, brushware, surgical instruments
and appliances, hemp and coir rope, and buttons—which from
small beginnings have grown to a large extent during the war,
mainly as a result of the considerable reduction in foreign trade,
both exports and imports. Some of them, such as the surgical
instruments and appliances and hemp and coir rope industries,
might be able to maintain their position after the war, but the
prospects would seem to be less certain in the case of the others.
This outline of wartime industrial expansion in India is by no
means complete and no reference has been made in it to the development, for instance, of the food industries such as biscuit-making,
fruit canning and dehydration, or the increase in plantation produce
such as tea and rubber, or the extension of the telecommunications
system by 100,000 miles at a cost of about 160 million rupees.
In the great majority of cases the acceleration of industrial development was brought about by the initiative of the Government,
especially the Supply Department and the military authorities.
The assistance provided usually took the form of the guaranteed
purchase of production and the provision of the materials needed,
but there were also cases in which productive efficiency was increased
or the manufacturing processes were facilitated with the aid of local
research workers, or foreign technicians, whose services were
secured by the good offices of the Government.
Finally, it may be noted that the composition of the country's
foreign trade, exclusive of trade on Government account, shows
that from 1938 to 1944 there was a progressive increase in the
proportion of raw materials to total imports (by value) and a
3

28

WARTIME LABOUR CONDITIONS IN INDIA

steady decline in the proportion of manufactured articles. As
regards exports (including re-exports), the proportion of manufactured goods to the total (by value) continued to rise and that of
raw materials to decline. The proportion of food, raw materials
and manufactured articles to the total value of imports, which
was 13.5, 23.9 and 61.0 per cent., respectively, in 1938, was 9.0,
58.0 and 31.9 per cent., respectively, in 1944. In the case of exports,
the proportion of food, raw materials and manufactured goods
to the total value, which was 23.5, 44.3 and 30.5 per cent., respectively, in 1938, was 22.5, 24.7 and 51.5 per cent., respectively, in
1944.
The full extent of wartime industrial production as well as the
real reasons why further advance was not made will become apparent
only if and when all the relevant information is published. Meanwhile, it is widely apprehended that, great as the development
has been, it falls short of similar achievement in some other
countries, especially when the manpower and material resources
of India are taken into account. Such apprehension has led to a
great deal of public criticism, which, whether well founded or not,
may be regarded as a measure of the impatience, in the present
temper of the country, for rapid industrial advance.

IV
Organisation of Labour Supply
The changes in the employment situation brought about by
the war may be seen from the following analysis of the returns
under the Indian Factories Act, giving the average daily number
of workers employed in organised industry.
AVERAGE DAILY NUMBER OF WORKERS EMPLOYED IN INDUSTRIAL
ESTABLISHMENTS IN BRITISH INDIA SUBJECT TO THE
INDIAN FACTORIES ACT, IN 1 9 4 3
(000's)

Industry

Central, provincial and municipal Government establishments:
Clothing
Dockyards
Engineering (general)
Railway workshops
Miscellaneous
Mints
Private establishments:
Textiles
Engineering
Minerals and metals
Food, drink and tobacco
Chemicals, dyes, etc.
Paper and printing
Wood, stone and glass
Hides and skins
Miscellaneous

1939

1943

Percentage
increase in
1943 over 1939

2
5
8
56
S
2

29
13
23
93
19
7

1,350.0
160.0
187.5
66.1
280.0
250.0

817
148
55
97
56
44
52
13
20

1,002
254
93
125
83
51
90
34
37

22.6
71.6
69.1
28.9
48.2
15.9
73.1
161.5
85.0

Source: Indian Labour Gatette, Vol. 1, No. 2, Aug. 1948; Vol. II, No. 8, Sept. 1944. For the
1944 figures, which were published after this report was completed, see the Apr. 1946 issue of the
Gatette. As compared with 1948, total factory employment in 1944 increased by 8.4 per cent.,
largely as a result of the rise in employment in ordnance factories.

It will be remarked that in both classes of establishments
mentioned—Government and private—there was an appreciable
increase in employment in all industries without exception. In
the Government establishments the rate of increase was highest
in the clothing industry and lowest in the railway workshops.
The rate of increase was higher in the miscellaneous group, mints
and general engineering industries than in dockyards. In the
case of private establishments, the rate of increase was higher
in the hides and skins, miscellaneous, wood, stone and glass, engi-

30

WARTIME LABOUR CONDITIONS IN INDIA

neering, minerals and metals and chemicals and dyes industries
than in the food, drink and tobacco or paper and printing industries;
in the last-named the rise was the smallest. In other words, the
level of employment rose mainly in industries essential to the war
effort.
The most important classes of industrial workers comprise,
in addition to factory workers, those employed in mines, 347,018
(1941) ; on railways, 708,541 (1939-40) ; and in plantations, 885,950
(1937-1939).
The above figures do not, however, present the whole picture.
In India the smaller or unorganised industries provide employment
for a much larger number of persons than organised large-scale
industry, which alone is covered by the returns of the Factories
Act 1 ; these smaller industries have made their own considerable
contribution to the wartime increase in production. In addition,
a large number of skilled and semi-skilled workers have been
absorbed by the armed forces.
From the outset, the demand for technically trained workers
from the Central, provincial and municipal Government and private
establishments as well as from the defence services was much larger
than the available supply. The utilisation of the existing number
of technical workers to the maximum advantage could be ensured
only by the control of their employment, and for that purpose, on
29 June 1940, the Governor-General in Council promulgated the
National Service (Technical Personnel) Ordinance (Ordinance No.
II of 1940). The various categories of skilled and semi-skilled
artisans—carpenters, electricians, blacksmiths, fitters, painters,
machinists—to whom the Ordinance was applicable were specified
in a schedule, and all such technical workers between eighteen
and fifty years of age who were not in the armed forces were made
liable for employment in national service. Any factory engaged in
war work might be declared by notification to be a factory engaged
on work of national importance, and all notified factories might
apply for technical personnel. Any industrial undertaking might
be required to furnish particulars of the technical personnel it
employed, and the management of any undertaking other than a
notified factory might be required to release technical personnel
1
On this point see B. G. GHATE: Changes in the Occupational Distribution of the
Population (Studies in Indian Economics issued by the Office of the Economic
Adviser to the Government of India. Second Series, No. 1, New Delhi, 1940), p. 44.
Mr. Ghate observes that "judged by the test of the total number of persons occupied in industry, India is easily the first among the industrial countries of the
world''. See also Sir Atul C. CHATTERJEE: "Federalism and Labour Legislation in
India", in International Labour Review, Vol. XLIX, Nos. 4-5, Apr.-May 1944.
pp. 415-445. Sir Atul concludes that the total of wage earning workers engaged
in industry, transport, mines, plantations, trades, domestic service and agriculture
had reached a figure exceeding 57 million in 1941.

ORGANISATION OF LABOUR SUPPLY

31

for employment in national service. The terms of service of the
personnel so requisitioned might be determined by the competent
authorities, without prejudice, however, to the rights that they
had already acquired to a provident or superannuation fund.
Technical personnel to whom the Ordinance applied might be
moved from one factory to another, and in certain selected undertakings they could not leave or be discharged without the permission
of the competent authority.
Technical personnel requisitioned for national service under the
Ordinance were entitled to reinstatement in their former employment under conditions no less favourable than those which would
have been applicable to them had they remained in that employment.
The local administration of the Ordinance was vested in national
service labour tribunals especially constituted in different areas
for that purpose. The tribunals, which consisted of not less than
three members appointed by the Central Government, the majority
of whom were servants of the Crown, were vested with the powers
of a civil court and might record evidence, administer oaths, enforce
the attendance of witnesses and compel the production of documents.
The Ordinance was amended in 1940, 1941, 1942, 1943 and 1944.
The principal changes introduced by these amendments were:
technical personnel were made liable to undertake employment
not only in notified factories but also in training establishments
and technical posts under the Crown; the definition of technical
personnel was extended so as to include apprentices and notified
Asiatic immigrants in British India; the tribunals were empowered
to determine the terms of service of persons who had been refused
permission to leave their employment; the minimum age of persons
to whom the Ordinance was applicable was reduced from eighteen
to seventeen years; the Ordinance was made applicable to Indian
State subjects resident in British India; and the administrative
powers of the tribunals, as well as the categories of technical
personnel to whom the Ordinance was applicable, were extended.
Offences under the Ordinance were made cognisable, and the scope
of the Ordinance was extended so as to include ships registered in
British India and ships' officers.
Three other Ordinances were also issued for the regulation of
employment: the Essential Services (Maintenance) Ordinance
(Ordinance No. XI of 1941), applicable to all employments under
the Crown, as well as private employment declared to be essential
in the interests of the war effort, and designed to ensure that the
administrative personnel would remain at their posts in emergency
conditions; the Motor Vehicles (Drivers) Ordinance (Ordinance

32

WARTIME LABOUR CONDITIONS IN INDIA

No. V of 1942), empowering the Government to requisition the
services of persons qualified to drive motor vehicles and providing
for their reinstatement in former employment on the termination
of compulsory service; and the Railways Employment Military
Personnel Ordinance (Ordinance No. LIII of 1942) regulating the
employment of members of the armed forces in the working and
management of railways. Amendments, mostly of a formal character, were subsequently made to the first two of these Ordinances.
It might be mentioned in this connection that provision was
made in the Defence of India Rules for empowering an authorised
officer in a specified area to require any male person in that area to
assist in emergency defence or rehabilitation work at rates of payment determined by the officer (section 78A) ; and for empowering
the Central Government to employ military personnel in Government or other undertakings in war work, should such a course
be deemed necessary for the promotion of the war effort or in the
public interest (section 81 subsection 3A).
Not only was the employment of trained workers regulated,
but measures were taken to increase the supply of such workers.
In June 1940 the Government appointed a committee to examine
the nature and extent of the training facilities provided in the
existing technical institutions in the country and to recommend
measures to improve those facilities and adapt them to wartime
requirements. In the following month the Department of Labour
of the Government of India drew up its first training scheme,
providing for the training of some 3,000 semi-skilled tradesmen.
Within three months the scheme had to be expanded.
The training scheme, which was not only initiated but also
administered by the Labour Department, covered all the main
engineering trades, including fitting, turning, machining, instrument-making, welding, sheet-metal work, tool-making, blacksmithing, moulding and pattern-making, and included the Indian
States. For inspection and supervision purposes the country was
divided into five regions, and training was given in accordance
with specimen syllabuses prepared by the Department. The
courses varied from three to nine months in the first instance and
were subsequently extended to twelve months in some cases.
Candidates for training were selected by the national service labour
tribunals or by local selection committees or recruiting officers
appointed by the tribunals.
On the completion of their training, the trainees were tradetested and placed in employment in the defence services or in civil
industry according to requirements. While under training, trainees
received stipends varying from 24 to 31 rupees a month according

ORGANISATION OF LABOUR SUPPLY

33

to their educational attainments and the relative cost of living
in the locality. On admission to a training centre each trainee
received a free issue of two sets of workshop clothing and was
entitled to a small advance for the purchase of personal requirements. Free medical treatment was provided, and if a trainee was
injured he was entitled to the benefits provided by the Indian
Workmen's Compensation Act. Sports and physical training were
encouraged and the Government provided a grant for the purpose.
Hostel accommodation was provided at most of the larger centres.
An interesting feature of the scheme was the concentration at
special centres of trainees who volunteered for Army service.
The enrolment might take place at any time after joining a training
centre, and the trainees accepted for Army service received Army
rates of pay or an allowance in lieu thereof.
The scheme was initiated with 1,800 Indian instructors and
100 British specialist instructors obtained from the United Kingdom
through the good offices of the Ministry of Labour. The critical
shortage of machine tools and precision instruments for training
purposes was made up by a supply secured from the United States
under lend-lease arrangements. The scheme was revised from
time to time in the light of the experience gained in its working.
The smaller and less efficient centres were gradually closed down
and the more successful ones were developed. At the end of
January 1945 the total number of persons who had completed
their training under the scheme was 86,223, while the number under
training was 21,425. There were 164 centres at that date with a
total capacity for training 30,588 persons. '
With the end of the war in prospect the future of the scheme
came up for consideration, since there would be a considerable
reduction in the demand for trainees for employment in Government undertakings or in the defence services after the war and
the trainees would need to be absorbed in civil industry. An
advisory committee was set up by the Government to ascertain
the views of industrialists on the changes to be introduced in the
scheme in order to make it useful for industry. Several recommendations were made by the committee, including the assignment
of a certain number of the training centres to specialise in training
for civil industry; the extension of the course of training to a period
of three years and six months with eighteen months' practical work
in a factory; the linking of training to school education and the
admission, at least in some of the centres, of boys of fourteen to
fifteen years of age on leaving school; the requirement of a higher
minimum standard of general education for admission to training;
1

Indian Labour Gaiette, Vol. II, No. 9. Mar. 1945.

34

WARTIME LABOUR CONDITIONS IN INDIA

and the co-ordination of any existing apprenticeship training
system in factories with the technical training scheme. At a
subsequent meeting, the committee recommended the establishment
of an apprenticeship scheme on a national basis, with provision for
training for two years at a training centre and a year and a half of
practical training in a factory, and the immediate establishment,
in different provinces, of training centres to accommodate 4,608
workers. *
It is not without interest to note in this connection that, in
view of the poor physique of the greater part of the trainees, the
Government decided in 1943 to set up depots in which prospective
trainees would receive regular physical training and, where necessary, would be given shark liver oil treatment as well. In the
same year systematic periodical medical examination of the trainees
was instituted, and in view of the mounting prices of food grains,
arrangements were made for the sale, at different training centres,
of grain at concession rates to the trainees and to instructors receiving less than 200 rupees a month.
In addition to the above scheme, various less extensive schemes
were instituted during the war. Early in the war, provision was
made for the training of junior technical staff and semi-skilled
artisans required for the expansion of the ordnance factories. The
scheme aimed at training, by 1 September 1942, 10 assistant
works managers, 1,300 supervisors and 6,000 skilled and semiskilled artisans in ordnance factories. Staff selected from these
factories were sent on deputation to the United Kingdom to study
the latest production methods. Arrangements were made for
giving to trainees who had completed their training under the
Labour Department's scheme advanced training for a period of
eight or nine months in civil industry as machine-tool artificers and
tool makers. The Labour Department's trainees who had applied
for Army service but had failed to attain the required physical
standard were afforded facilities for further training for two to
four months in aircraft repairs.
A small centre with 250 seats
(189 of which were occupied in November 1943) for training young
persons as naval artificers for the Royal Indian Navy was instituted.
In response to the demand for clerical staff for the defence services,
centres were also instituted for giving the requisite training to
selected persons. In November 1943 there were 21 such centres,
with a total training capacity of 5,211 persons a year.
1
This scheme will provide only 2,304 trained workers annually, but the
estimated annual demand for such workers is reported to be 16,000. See also.
note on "Technical Training in India" in International Labour Review, Vol. LII.
Nos. 1-2, Jan.-Feb. 1946. p. 94.

ORGANISATION OF LABOUR SUPPLY

35

Finally, reference should also be made to another scheme, which
owed its inception to the then British Minister of Labour and
National Service, Mr. Ernest Bevin, for advanced practical training
in industrial undertakings in the United Kingdom of selected
Indian workers with three years' engineering experience in workshops. Under this scheme, which began early in 1941, workers
were sent in groups of 50 to the United Kingdom. The period
of training, which was six months in the first instance, was subsequently extended to eight months, the groups were enlarged from
50 to 75 by the inclusion of 25 aeromechanics, and provision was
also made for the inclusion in each group of 15 workers trained
under the Labour Department's training scheme who had passed
their trade tests with credit and had acquired at least a year's
practical experience in a factory engaged in war work. Workers
trained under this scheme belonging to the first few groups, at
any rate, were reported to have found it fairly easy to secure
employment on their return at wages appreciably higher than
those they had previously received. Up to February 1945
the total number of trainees sent to the United Kingdom was 713.
One of the recommendations of the advisory committee on training
mentioned above was that this scheme should be adapted to postwar requirements, by the extension of its scope so as to include
industries other than engineering, the careful selection by regional
committees of craftsmen for specialised training and the extension
of the period of such training from eight to a t least twelve months.
The war also caused a rise in the demand for unskilled labour.
While there was, of course, no absolute shortage of unskilled labour
in the country, local shortages in areas with large defence works
or other undertakings with a steady demand for labour were by no
means uncommon, particularly because of the lack of mobility
from surplus to scarcity areas on account of the long distances
separating them, the diversity of habits and customs in different
parts of the country and the general rigidity of the rural communities. In the early stages of the war the tea gardens in Assam released
sufficient labour to meet the pressing needs in the north-east. Subsequently, the Government found it necessary to make more
extensive arrangements, and instituted a system of labour depots
in which groups of workers, each consisting of some fifty persons
under a leader, were formed into basic units of 500 to 800 workers
each under a commander. The units, which were provided with
the necessary tools and were accompanied by medical officers, were
despatched to different destinations for such work as the construction of roads, strategic railways and airfields, or coal mining.

36

WARTIME LABOUR CONDITIONS IN INDIA

The first of these depots was set up in Gorakhpur in 1942, and in
May 1944 the total number of workers supplied by the depot was
66,699.
In 1943, in Jubbulpore, where a large number of Government
undertakings were located, an advisory committee was set up to
co-ordinate the recruitment of labour for these undertakings and
propose measures for the promotion of labour welfare, including
the determination of wage rates and cost-of-living bonuses and
the provision of stores for the sale of grain at concession rates and
housing, medical relief and other such amenities.
As a result of these experiments, the Government decided in
1944 to establish advisory committees in each province to assist
in the co-ordination of the demand for, and the regulation of the
conditions of employment of, unskilled labour, as well as to set
up labour depots in all surplus areas. In the same year a Directorate of Unskilled Labour Supply was set up to supervise the working
of this scheme; and a Labour Recruitment Control Order, requiring
a licence to be obtained for the recruitment of labour in special
controlled areas in different parts of the country, was promulgated.
The wartime organisation of labour supply was largely improvised to meet the urgent requirements of an unprecedented
situation. It had to be placed on a more systematic and permanent
basis if it was to be enabled to deal with the problems of transition
after the war, when large numbers of workers would be released
from the armed forces and when the war factories would inevitably
close down or restrict production very considerably. Accordingly,
the Government decided in 1943 to establish a network of employment offices.
The scheme was confined in the first instance to technical
personnel who were receiving a daily wage of not less than a rupee
when last employed. It applied to supervisory grades but not to
managerial grades. It was designed to encourage the registration
of unemployed technical personnel, but such registration would not
be compulsory. The employment offices would deal only with
placement, and the determination of the conditions of service of
the applicants would be excluded from their scope.
The offices would be under suitably qualified managers. A
tradesman supervisor capable of carrying out trade tests in the
main engineering trades would be included in the staff where
necessary. Local employment committees, consisting of two
representatives of employers, two of workers, one of the provincial
Government and one Army representative, and with a chairman
to be elected by them, would also be set up to advise on all questions

ORGANISATION OF LABOUR SUPPLY

37

concerning placement. The central office in the Department of
Labour, Government of India, would co-ordinate the needs of the
different provinces and issue directions to the local offices when
required.
While employers would be encouraged to apply to the employment offices for any technical personnel they might require, the
engagement of the applicants referred to them would not be
compulsory. In the event of the rejection of such applicants, the
employers would, however, have to give reasons for such rejection.
By May 1944, 10 offices had been set up in accordance with
this scheme, but having regard to the needs of demobilisation the
Government decided to extend it and proposed to establish 71
offices by February 1946: one central office, 9 regional offices, 2
special offices for naval and aircraft trades and 59 subregional
offices. It was also proposed to set up 6 Directorates under a
Director-General of Resettlement and Re-employment in order to
facilitate the placement of demobilised personnel and their reintegration into civil life: a Directorate of Employment Offices and
Statistics to supervise, integrate and direct the work of central,
regional and subregional offices; a Directorate of Employment to
explore new avenues of employment; a Directorate of Technical
Training to organise facilities for advanced technical training and
apprenticeship training for demobilised technical workers; a Directorate of Vocational Training to prepare schemes for the training
of demobilised persons in non-engineering trades and vocations;
a Directorate of Publicity to call public attention to the need for
the reinstatement in civil employment of demobilised persons
and canvass for them positions in private employment; and a
Directorate of Welfare to watch the interests of demobilised persons
who had been reinstated in civil employment. It was also announced
that the Labour Department had under consideration a separate
scheme for the placing of disabled persons in employment. The
staff necessary for the administration of the scheme would be
trained partly in India and partly in the United Kingdom.

V
Industrial Relations
On the question of industrial relations the Royal Commission
on Labour in India, which was appointed in 1929 and reported
two years later, observed :
An important factor at work in creating industrial unrest in India is the
lack of contact which too often exists between employers and employed. There
are employers who, by special efforts, have established reasonably close touch
with their workers, but they are exceptional. In practically every centre and
every industry [with the exception of plantations] the lack of contact and understanding is evident. In the interests of all concerned, we urge that every effort
should be made to bridge the gulf. An immense amount of thought and toil
has been devoted to surmounting the technical, financial and commercial difficulties in the way of industrial development in India. But it will fail to secure
the results it deserves unless much more attention is given to the difficult sphere
of human relationships. Weakness in this direction has already produced serious
effects, and the outlook in some of the centres we visited was menacing. Unless
a vigorous effort is made to effect an improvement, the development of largescale industrial enterprise is likely to be difficult and precarious. *

The warning was repeated by Mr. Harold Butler, British
Minister in Washington and formerly Director of the International
Labour Office, who visited India in the course of an official mission
to the East in 1937. Mr. Butler recorded his impression that
"the problem of industrial relations may be considered to be the
chief problem confronting Indian industry at the present time, and
one upon which further industrial development to some extent
depends". 2
With the outbreak of war, the maintenance of the industrial
output at its maximum capacity became imperative, but at the
same time industrial relations were inevitably subjected to increasing strain. Moreover, although the Central Government had
to bear the responsibility for the direction and conduct of the war
effort, under the Government of India Act of 1935, which was
brought into operation in 1937, its functions in matters pertaining
to labour legislation and administration were in practice confined
to those of an advisory character. In most of these matters the
provincial Governments had plenary powers in all but name as
1
Report of the Royal Commission on Labour in India (Cmd. 3883, London,
H.M.
Stationery Office. 1931). p. 340.
2
Harold BUTLER: Problems of Industry in the East. With Speeial Reference
to India, French India. Ceylon. Malaya and the Netherlansd Indies (I.L.O. Studies
and Reports, Series B, No. 29, Geneva, 1938). p. 16.

INDUSTRIAL RELATIONS

39

a result of the autonomy accorded to them under the new Constitution, and little more than the task of co-ordination was left
to the Centre. 1
With the intensification of the war effort, a modification of the
trend became evident. Measures were adopted to enable the Centre
to control the situation. In January 1942, the Government of India
by a Notification added Rule 81A to the Defence of India Rules
in order to restrain strikes and lockouts. The Rule empowered
the Government to make general or, to suit local requirements,
special Orders to prohibit strikes or lockouts, to refer any dispute
for conciliation or adjudication, to require employers to observe
such terms and conditions of employment as might be specified
and to enforce the decisions of adjudicators. In May of the same
year, another Notification was issued vesting much the same powers
in the provincial Governments, and in August an Order was
promulgated prohibiting strikes and lockouts without fourteen
days' previous notice. Strikes and lockouts were also prohibited
when a trade dispute was referred to a statutory enquiry or for
conciliation or adjudication, during the entire period of the proceedings and for two months thereafter. In April 1943, the Defence
of India Rules were further amended and concerted cessation of
work or refusal to work by a body of persons in a place of work,
unless it was in furtherance of a trade dispute with which they
were directly connected, was prohibited. Provincial Governments
were empowered to take all necessary measures to prevent such
cessation of work in establishments in which 100 or more persons
were employed and to open and work all such establishments
which had been closed down for reasons other than those relating
to a trade dispute in them.
In the province of Bombay, where the textile industry is still
largely concentrated, the Industrial Disputes Act (Act XXV of
1938) was amended in 1941. The main object of the 1938 Act,
which applied to the cotton textile industry throughout the province
and the silk and woollen textile industries in specified areas, was
to make provision for the promotion of the peaceful and amicable
settlement of industrial disputes. To this end the Act set up a
machinery for the arbitration of disputes in which both parties
agreed to arbitration. The amendment (Act X of 1941) made
arbitration compulsory in certain cases as a war measure and
empowered the Government to refer to arbitration any dispute
which, in its view, might lead to serious disorder or breach of public
peace, or cause considerable or prolonged hardship to a large section
of the community, or affect the industry adversely.
1

For a discussion of this question, see Sir Atul C. CHATTERJBE, loc. cit.

40

WARTIME LABOUR CONDITIONS IN INDIA

The efforts of the Central Government were not, however,
confined to preventive action. In order to facilitate the necessary
consultation for the co-ordination of labour policy, a conference
of representatives of the Central and many of the provincial departments of labour as well as representatives of the authorities responsible for the administration of labour laws in some of the
industrially more important Indian States was held in 1940 under
the auspices of the Government of India. A similar conference
was held in the following year, and previous to that conference, the
Member in charge of Labour in the Viceroy's Council—the Labour
Department of the Government of India was made the main
responsibility of a Member of Council in that year—summoned
a meeting of representatives of employers and workers to elicit
their views on the Government's proposals in respect of the items
on the agenda. Early in 1942 a third conference, which was more
fully representative of the provinces and States than the previous
ones, was held, when the chairman suggested the desirability of
holding joint meetings of Government, employers' and workers'
representatives. The suggestion was accepted and in August of the
same year a tripartite labour organisation, modelled on the Constitution of the International Labour Organisation, was established.
The organisation consists of a Standing Committee and the
plenary Conference, over both of which the Member in charge of
Labour in the Viceroy's Council presides. The Committee, which
meets not less than twice a year, consists of ten Government,
and five employers' and five workers' representatives. The ten
Government representatives consist of one representative of the
Central Government (in addition to the chairman), one each of
the industrially more important provinces of Bengal, Bombay,
and the United Provinces, three of the remaining eight provinces,
and three of the Indian States, including one of the Chamber of
Princes. The function of the Committee is to consider questions
referred to it by the plenary Conference or the Central Government.
The plenary Conference, which meets at least once a year,
consists of twenty-two Government representatives (excluding
the chairman), and eleven employers' and eleven workers' representatives. The Government representatives consist of
three representing the Central Government, including one for
minor administrations, eleven representing the provinces, six
the industrially more important Indian States, and two the
Chamber of Princes for the other States. Of the employers' representatives, eight are nominated by the Government in agreement
with the two main employers' organisations—the Employers'
Federation of India and the All-India Organisation of Industrial

INDUSTRIAL RELATIONS

4î

Employers—while the remaining three are reserved for the representation of other classes of employers. In the case of the
workers' representatives, eight are likewise nominated in agreement
with the two main workers' organisations—the All-India Trade
Union Congress and the Indian Federation of Labour—while the
remaining three are reserved for the representation of other workers'
interests.
The functions of the organisation are advisory in character.
All current proposals for labour legislation and the promotion of
labour welfare, including, in particular, ways and means for the
enhancement of wartime industrial production, have been placed
before it. The organisation, however, is still in an experimental
stage, and proposals for modifying its constitution and procedure
are under consideration. x
The Central Government also appointed in 1942 a Welfare
Adviser in the Labour Department and seven assistants for
industrial areas in different parts of the country. A woman assistant
to deal with problems connected with female labour was appointed
in 1944. These officers, whose jurisdiction was confined to mines,.
oil fields, federal railways, major ports and industrial establishment»
owned or managed by the Central Government, were charged with
the special duty of the promotion of industrial relations by the
removal, as far as possible, of causes of friction between employers
and workers, the organisation of shops for the sale to workers of
grain at concession rates and the provision of other amenities, the
provision of assistance in the development of the trade union movement and the supply of prompt information on the industrial
situation in their respective areas in order that speedy action might
be taken to redress grievances.
Early in 1945, separate machinery was, moreover, set up by the
Government for the especial purpose of the promotion of industrial
relations in undertakings over which the Centre had direct
jurisdiction (federal railways, mines, oil fields, major ports and other
industrial establishments owned or controlled by the Government
of India). The organisation consists of the Chief Labour Commissioner and the Deputy Labour Commissioner with headquarters
at New Delhi, three regional commissioners with headquarters at
Bombay, Calcutta and Lahore respectively, nine conciliation officers
and twenty-three labour inspectors located at various centres
throughout the country. The labour welfare organisation to which
reference was made above has been merged in the new organisation,
which will deal with industrial relations, conciliation of labour
'Cf. International Labour Review, Vol. XLIII, No. 1. Jan. 1943, pp. 1-21 r
"The Institution of a Tripartite Labour Organisation in India: The Influence of
the I.L.O.".

42

WARTIME LABOUR CONDITIONS IN INDIA

disputes, administration of labour legislation in so far as such
administration is the responsibility of the Central Government
and no other machinery has been set up for the discharge of special
responsibilities, the collection of information on wages and other
labour matters, and the promotion of industrial relations generally.
As a result of these and other measures, the promotion of labour
welfare in wartime mainly took the form of the provision of
assistance to workers by the establishment of shops for the sale,
at concession rates, of food grains, cloth and other essential goods,
as well as canteens and restaurants, at or near the workplaces.
In some cases, as in Bombay City, milk was supplied free of cost
to workers' children at welfare centres. Not only did the Central
Government provide these various amenities for its own very large
number of wartime employees, but it also recommended to private
employers to make similar provision, particularly in view of the
considerable wartime rise in prices. 1 Many of these employers
responded to the Governments' proposals and some of them made
these arrangements at an early stage in the war on their own account
as a contribution to the war effort. Steps were also taken to explain
to the workers the need to maintain war production unimpaired,
and in a large number of cases individual or local grievances were
informally taken up with the management by the welfare advisers
and promptly redressed.
In India, perhaps even more than in other countries, coal mining
presented special problems. Even in normal times there was a
dearth of labour in the mines, as such labour was largely recruited
from among the aboriginal peoples of the Central Provinces and
Bihar, who are primarily agriculturists and take to mining only
as a supplementary source of income. With the increased demand
for coal for wartime industrial production, there was a proportionate
increase in the demand for labour for the mines. But other wartime
occupations in the neighbouring areas were more attractive, either
because of their less arduous character or because of the higher
remuneration offered. There was, therefore, a special need to
increase the amenities provided for miners, and in order to promote
the welfare of coal miners the Coal Mines Labour Welfare Ordinance
(Ordinance No. VII of 1944) was promulgated by the Central
Government on 31 January 1944. The Ordinance, which extended
to the whole of British India and came into effect on the date of
promulgation, provided for the establishment of a fund to finance
welfare activities. The fund was to be made up of a levy or cess
by the Central Government at a rate (not less than one anna and
1
See also "Labour Welfare in India", in International Labour Review. Vol. L I I I .
Nos. 1-2, Jan.-Feb.. pp. 103-106.

INDUSTRIAL RELATIONS

43

not more than four annas a ton) to be fixed from time to time.
The activities to be financed by the fund, which were specified in
the Ordinance, consisted of the building or improvement of housing
and the provision of water supply, facilities for washing, educational
and recreational facilities, and measures for the improvement of
public health, sanitation and the standard of living of the miners
generally. An advisory committee was set up for consultation
on the administration of the Ordinance, and steps were taken to
supply the miners and their families with essential goods, including
materials for the construction of huts. The Central Government
also appointed a Coal Miners' Welfare Commission with headquarters in the mining area.
The total number of strikes in 1939 in British India was 406
(including 14 in progress at the end of the previous year), the highest
figure on record in 20 years. The total number of workers involved
was 409,189 and the total number of working days lost 4,992,795.
In 1944, when employment had expanded as a result of the war,
although the total number of disputes (including 13 in progress at
the end of the previous year) was 658 and the total number of
workers involved 550,015, the total number of man-days lost was
only 3,447,306.
Finally, it may be noted that the membership of the trade
unions registered under the Trade Unions Act, 1926, rose from
399,159 in 1938-39 to 685,299 in 1942-43, the highest figure recorded
since 1927-28. In 1943-44 the membership, exclusive of Bengal
and the Punjab, was 382,183, but the estimated total membership, including these two provinces, was 564,968. These figures
do not, however, take account of unregistered trade unions, whose
strength is considerable. In Bombay, for instance, on 1 December
1942 the membership of registered unions was 155,782 and that of
unregistered unions 29,574. The wartime increase in trade union
membership was mainly confined to the textile, engineering and
miscellaneous industries and municipal employees and dock and
port trust workers. In addition to the All-India Trade Union
Congress, a new trade union organisation, the Indian Federation
of Labour, was founded during the war. A large measure of support
was accorded by the trade unions generally to the Allied war aim
of the destruction of fascism. The rapidly rising cost of living,
however, called for concerted action to secure some adjustment
in their earnings. The need for such efforts and the expansion of
employment no doubt account for the wartime increase in trade
union membership. *
1
See also "Wartime Developments in Trade Union Organisation in India",
in International Labour Review. Vol. LUI, Nos. 5-6, May-June 1946, pp. 349-363.

4

VI
Conditions of Work
Hours of work in perennial factories (or factories working for
over 180 days in the year) covered by the Factories Act, which were
fixed at sixty in the week following the adoption of the Washington
Hours Convention of 1919, were reduced to fifty-four in 1935, when
the Act as amended and consolidated in the previous year came into
force. In India as elsewhere, the war led to relaxation of the provisions concerning the hours of work. Early in the war, on account of
the urgent need to increase textile production and at the instance
of the Central Government, the provincial Governments issued
notifications authorising the textile factories to work up to sixty
hours a week as an emergency measure. The workers were, however, required to be paid overtime for the additional six hours
at the rate of one and a quarter times the normal wage. The
duration of the validity of this exemption was in the first instance
limited to six months, but was subsequently prolonged to the
entire period of the war.
Moreover, many of the provincial Governments, which have
concurrent powers of factory legislation with the Centre and are
wholly responsible for the administration of such legislation under
the present Constitution, also authorised, of their own accord, the
prolongation of hours of work for the duration of the war. The
exemption was authorised in respect of specified industries or
establishments, and in all cases maximum limits to the hours of
work as well as minimum requirements in respect of rest periods
were prescribed. The payment of overtime for the additional hours
of work was also made obligatory.
As a result of action taken during the war years, all class I
Railways in British India are now under statutory obligation to
observe the 1930 Hours of Employment Regulations, which, in the
main, regulate the hours of work of railway servants, the grant of
compensatory periods of rest to them and the payment of overtime
allowance when the limit of hours of work prescribed by the
Regulations is exceeded in certain specified circumstances. In 1942,
however, the Central Government was empowered by the Railways
(Hours of Employment) Ordinance (Ordinance No. XLV of 1942)
to suspend the application of the Regulations to the whole or a
part of the railways for specified periods, as an emergency measure,
but this power was never in fact exercised. The Ordinance provided

CONDITIONS OF WORK

45

for the payment of overtime in the event of the suspension of the
Regulations at not less than one and a half times the normal rates
of wages.
Another Ordinance, No. I l l of 1940, promulgated by the
Governor-General, added a new clause to section 7, subsection 2,
of the Payment of Wages Act (Act IV of 1936), permitting deductions for the purpose of investment in war-saving schemes approved
by the appropriate Government.
It may, however, be doubted if the enforcement of labour laws
during the war years, with the increase in employment and the
inevitable dislocation of the administration generally, was all that
could be desired. Notwithstanding the lead from the Centre during
this period, the administration of labour legislation, with the
notable exception of that of the Mines Act and the Mines Maternity
Benefit Act, 1941, was a provincial responsibility. Even before
the war provincial factory inspectors complained of the inadequacy
of the staff for the satisfactory fulfilment of the duties assigned to
them. The reports, for instance, of the Chief Inspectors of Factories
for Bombay and Bengal for 1937 and 1938 respectively, clearly
showed that the administration of labour laws admitted of a great
deal of improvement. Sir Atul Chatterjee, in an appraisal of the
progress of labour legislation since the enforcement of the new
Constitution in 1937, observed: "Altogether one cannot resist the
conclusion that, though there has been commendable progress in
factory legislation in British India, there has been no corresponding
improvement in the administration of the laws." 1
An instance of the wartime relaxation of established standards,
which was much remarked both in India and abroad, was the
Government of India's decision in 1943 to exempt, as an emergency
measure, coal mines in certain provinces (Central Provinces and
Berar, Bengal, Bihar, Orissa) from the prohibition of the employment of women on underground work in mines. In 1935 the International Labour Conference adopted the Underground Work
(Women) Convention, which provides that, subject to certain
specified exceptions, no female, whatever her age, shall be employed
on underground work in any mine. The Convention was ratified
by India in 1938 after regulations to give effect to its provisions
had been issued by the Governor-General in Council in the previous
year.
The representative of the Government of India on the Governing
Body of the International Labour Office, in a letter dated 18
January 1944 to the Director of the Office, explained that the
Government had, with the utmost regret, found it necessary as a
1

Sir Atul C. CHATTERJEE, loc. cit., p. 436.

46

WARTIME LABOUR CONDITIONS IN INDIA

temporary measure to remove the prohibition in respect of coal
mines in certain provinces. For the maintenance of Indian war
production, and to prevent railway communications being
interrupted, adequate supplies of coal were absolutely vital. In
recent months coal production in India had seriously fallen, and
one of the chief reasons for this was that mine workers, who were
agriculturists and who worked in the mines intermittently, tended
to drift away from the coalfields. They liked to have their womenfolk alongside them, and during the period of food scarcity they
tended to return to their villages out of anxiety for their families.
They were also attracted by other well-paid employment in military
works, etc., which was open to husbands and wives together. The
reintroduction of female labour in the coalfields underground
would have a double effect. First, it increased the labour forces
available, the women working as loaders and thus releasing more
men for coal cutting. Secondly, it acted as a stabilising factor
counteracting the tendency of labour to move to other employment.
No alternative measure was likely to produce the immediate results
which were regarded as imperatively required.
In announcing the decision, the Government had, however,
made it clear that it had lifted the ban on the employment of women
on work underground with great reluctance, and that it would
reimpose it as soon as the present emergency was over. The Government's intention was to review the position after six months.
The conditions attached to the lifting of the ban were: all women
employed underground would be paid the same rates of wages as
men on similar work; no women would be employed underground
in galleries less than six feet in height; women working underground would draw the same rations as men; and every woman
employed underground would be supplied with milk free of cost
on the completion of an underground shift. The Government
was furthermore accompanying its decision by steps for the general
betterment of conditions in the coalfields. The owners were being
required to make grain rations available at concession rates; cash
wages and allowances to meet the higher cost of living had been
improved, and the rates in the majority of collieries were 50 per
cent, above those prevailing before the war; an increase in the
supply of consumer goods in the collieries had been made; Government labour welfare officers, including one woman, were being
employed, and an Ordinance had been made imposing a welfare
cess on coal despatched, the proceeds of which would be devoted
to improvements in public health measures, education and general
amenities, including motor transport for workers. Measures were

CONDITIONS OF WORK

47

also under consideration to reduce the competition for labour from
defence works, and to improve production in other ways.
In accordance with the policy set out in this letter, the recruitment of labour within certain specified colliery districts, otherwise
than in accordance with licences issued for the purpose for employment on works outside those districts, was prohibited with a view
to conserving the supply of colliery labour. Furthermore, in
April 1945, the Mines Maternity Benefit Act, 1941, was amended
(by Act No. X of 1945) in order to afford greater protection to
women workers employed in mines. Under the original Act, the
employment in mines of women workers was prohibited for four
weeks after delivery and they were also entitled to receive maternity
benefit for four weeks before and four weeks after delivery at the
rate of 8 annas a day. The amending Act extended the prohibition
from four weeks to twenty-six weeks after confinement in the case
of women working underground. Moreover, during an additional
period of ten weeks, employment underground was permissible
for more than four hours a day only if a crèche was provided at the
mine, and for not more than four hours at a stretch in any case.
The employer had also to pay maternity benefit at 6 rupees a week
for ten weeks preceding, and six weeks following the delivery in
the case of women who had worked below ground in a mine or mines
of the same owner for not less than ninety days in all during a
period not exceeding six months immediately preceding the date
on which the mine owner or manager was informed that she was
likely to be delivered of a child within ten weeks. The rate of
benefit in the case of other women workers was also increased from
8 to 12 annas a day, and women doctors had to be provided to
examine women workers.
There was a great deal of controversy in the country over the
removal of the prohibition of the employment of women on underground work. The ban was rightly regarded as one of those
standards which could not be infringed without detriment to
national prestige and the violation of which could not be justified
solely on grounds of expediency. On the other hand, the miners
presented a special problem. The engagement in the same pursuits
of members of a family in common appears to be a social tradition
with them, which they are reluctant to abandon. The fact of the
matter seems to be that in India the miners (as indeed a large part
of the industrial workers), are still essentially agriculturists who
are interested in the cultivation of their land and resort to mining
as an incidental source of supplementary gain. Neither is this
income sufficiently large, nor are the housing and other conditions
of life in mining areas attractive enough to draw the miners away

48

WARTIME LABOUR CONDITIONS IN INDIA

from the land. They are, too, for the most part untrained, unskilled and illiterate, with little appreciation as yet of better ways
of life. The remedy in this case, as in so many others where Indian
labour is concerned, is the pursuance over a long period of a firm
policy for the removal of illiteracy and the improvement of living
standards by the encouragement of craftsmanship and the team
spirit, the provision of opportunities for ample and varied employment and the building up of a system of social security at a higher
level more in accordance with modern notions of individual rights
and social justice.
It must be added in this connection that shortly after the
surrender of Japan the Government of India issued a Notification
to the effect that the ban on the employment of women on underground work would be reimposed with effect from 1 February
1946.
Seamen are another category of workers who were much affected
by the war. Large numbers of Indian seamen are employed not
only on ships engaged in Indian coastal traffic but also on oceangoing vessels belonging to British and foreign companies. On the
occasion of the opening of a club for Indian seamen at Liverpool
in 1942, the then Parliamentary Under-Secretary for India remarked that a quarter of the whole personnel of the British merchant
navy was made up of Indian seamen, and he stressed the need for
providing them with all possible amenities. Before the war their
conditions of work were markedly inferior to those of seamen of
other nationalities, and the responsibility for their welfare at
various ports in India and abroad rested entirely with the shipowners and certain voluntary organisations. With the exception
of a home in Bombay, there were few welfare facilities available
for Indian seamen in India, while the amenities provided for them
abroad were most scanty. There was an appreciable improvement
in the situation during the war. A Welfare Directorate, with a
Central Advisory Board, consisting of representatives of Government departments and the representative in India of the United
Kingdom Ministry of War Transport, attached to it, was set up
in the Department of Commerce of the Central Government,
for the planning and provision of amenities and welfare facilities
for merchant seamen in all parts of the country. Eight welfare
officers, of whom three were exclusively assigned to Indian seamen,
were appointed at Calcutta, Bombay, Cochin and Vizagapatam.
At all these ports and at Karachi and Chittagong, homes or hostels
or clubs for seamen were organised. Similar organisations were
also established in London, Liverpool and Glasgow, as well as
in New York, Durban, Cape Town, Port Elizabeth, Mombasa,

CONDITIONS OF WORK

49

Freemantle and Colombo. Three welfare officers and two assistants
for the care of Indian seamen were appointed in the United Kingdom
under the administrative control of the High Commissioner for
India in London. Some of the organisations mentioned were
started by British or Allied voluntary associations for the promotion
of the welfare of seafarers generally, and it is notable that in one
instance the establishment of a hostel for Indian seamen was made
possible by a large donation received for that purpose from an
important American workers' organisation. Liberal contributions
for the provision of amenities to Indian seamen were also made
from the Viceroy's War Purposes Fund.
Another measure adopted in India during the war for the
protection of seamen was the Indian Merchant Shipping (Emergency
Life-Saving Appliances) Order, 1943 (supplementing the Indian
Merchant (Life-Saving Appliances) Rules, 1934), applicable to all
passenger ships, except home-trade wooden sailing ships of
primitive build, and to foreign-going and home-trade steamships
not certified to carry passengers. The Order was designed to
bring the rules applicable in the field of life-saving appliances up
to the standards generally adopted in wartime for the principal
merchant marines of the world, on the basis of actual experience.
The Indian Merchant Shipping Act (of 1923) was amended
(by Act II of 1942) in order to extend the application of the United
Kingdom Compensation to Seamen (War Damage to Effects)
Scheme, 1939, to Indian seamen employed on British ships registered
in India. In addition, the Government of India instituted a separate
but similar scheme—the Indian Seamen (War Damage to Effects)
Scheme, 1942—applicable to the personnel of ships registered
under the Indian Registration of Ships Act (of 1841) or the Bombay
Coasting Vessels Act (of 1838). In consequence of these measures
the masters of ships registered in British India and the members
of their crews who sustained war damage to their effects were
entitled to compensation from the State. The amount of compensation payable for war damage to a seaman's effects under the
Indian scheme was 40 rupees in the case of a seaman of a rank
lower than a tindal, and in other cases 50 rupees, or a month's
wages, whichever was more. Provision was made at the same time
to prevent the possibility of overlapping claims being made under
the two schemes for compensation for the same loss.
Provision was likewise made for the payment of compensation
and pensions to Indian seamen who had sustained war injuries or
were detained by the enemy, under the United Kingdom Personal
Injuries (Emergency Provisions) Act, 1939, and War Pensions and
Detention Allowances (Indian Seamen) Scheme, 1941, as well as

50

WARTIME LABOUR CONDITIONS IN INDIA

under the Indian War Pensions and Detention Allowances (Indian
Seamen) Scheme, 1942. Seamen were divided into four categories
under the United Kingdom scheme and into five under the Indian
scheme, according to their wages. The rate of compensation
for disablement was determined by the category to which the
seamen belonged and by the severity of the disablement. Provision
was made for the award of a special allowance to the seaman and
his wife in the event of need in cases in which the right to, or rate
of, compensation could not be readily determined and, in the event
of the seaman's death, for the payment of children's allowances
and widows' or dependants' pensions. Special awards and allowances were also provided for, but all payments were conditional
on the war injury or detention not being caused by the negligence
of the seaman. Claims for compensation in the case of injury or
detention could, of course, be made only under either the United
Kingdom or the Indian scheme, and amendments were made in
1939 and 1942 to the Indian Workmen's Compensation Act to
prevent applicants for benefits under one or the other of these
schemes from claiming compensation under the Act as well.
The Government of Bengal, it may be added, took steps in
1941 to bring under control the seamen's lodging houses in Calcutta,
and in order to enable inspections to be made of such houses and the
conditions therein to be regulated, required the proprietors to take
out licences. Amendments, designed to bring all these lodging
houses, regardless of whether they provided boarding or not,
were made in 1943 to the Calcutta Police Act and the Calcutta
Suburban Police Act (of 1866).
Relief for war injuries to workers employed in factories or other
industrial establishments was provided under a scheme which
the Central Government was empowered in 1941 to draw up by
the War Injuries Ordinance (Ordinance No. VII of 1941). The
Ordinance was amended in the following year (by Ordinance
No. I of 1942). This latter Ordinance, which applied to the whole
of British India and to British subjects and servants of the Crown
in any part of the country, enabled the Central and provincial
Governments to require dispensaries and hospitals to treat all
persons over the age of fifteen years in employment who had
sustained war injuries, including civil defence volunteers who
were injured in the discharge of their duties as such volunteers.
Provision was also made for the payment of allowances and pensions
to the injured persons and to the dependants of those in whose
case the injuries had proved fatal.
The rates of benefits in the case of an adult male, for instance,
were: 1 3 ^ , rupees a month for a period not exceeding six months

CONDITIONS OF WORK

51

for temporary injuries; the same rate in the case of total disablement
and proportionately reduced rates for partial disablement. Pensions
were also provided for the families of persons who had sustained
fatal injuries, at the rate of 8 rupees a month, in addition to a
children's allowance at the rate of 2 rupees a month for every
male child under fifteen years of age and every unmarried female
child under sixteen years of age. The rates of allowances and pensions for women were two fifths of the rates for adult males, and
the rates for persons under eighteen years of age three fourths
of the rate of adults. Pensions were reduced by 20 per cent, while
the beneficiaries were under treatment in a hospital, and deductions
were authorised in cases in which the beneficiaries declined to
undergo the necessary medical or surgical treatment. The scales
were higher in the case of civil defence volunteers, and the entire
cost of the scheme was borne by the Central Government.
The payment of compensation for war injuries was explicitly
excluded from the scope of the War Injuries Ordinance. While
the provisions of the latter Ordinance were adequate for persons
receiving up to about 24 rupees a month, they were hardly satisfactory to those receiving higher wages. In order to provide for compensation for war injuries, the War Injuries (Compensation Insurance) Act (Act X X I I I of 1943) was subsequently passed.
The Act imposed an obligation on employers of labour engaged in
specified essential services or industrial, mining, transport, or
other undertakings to pay compensation to their workers for war
injuries. The amount of compensation payable was the difference
between the extent of the relief prescribed under the War Injuries
Ordinance and what would be payable under the Workmen's
Compensation Act had the Act been applicable to war injuries.
Provision was also made for the compulsory insurance with the
Central Government of the undertakings concerned, as these
undertakings were themselves liable to war risks against which
few private companies were prepared to insure them. The Act
was applicable to the whole of British India and to Indian States
desirous of being included in the scheme and making the necessary
arrangements.
The foregoing account of the wartime regulation of conditions
of work would hardly be complete unless some mention was also
made of measures of a more permanent character which found their
way into the Statute Book during the war. Since the end of the
First World War, the Central and provincial Governments have
had before them a fairly extensive programme of labour legislation,
as a result in part of industrial development and in part of the

52

WARTIME LABOUR CONDITIONS IN INDIA

increasing demand for the improvement of labour conditions.
The war did not prove a deterrent to the continuance of the process.
The Indian Factories Act was amended by the Central Government in 1940, 1941, 1944 and 1945. The 1941 and 1944 amendments were more or less of a formal character. The 1940 and 1945
amendments, on the other hand, introduced substantial changes
in the legislation. The 1934 Act was applicable only to establishments employing on an average at least twenty persons a day.
The 1940 amendment (Act XVII of 1940) aimed at the prevention
of the employment of children in unhealthy or dangerous conditions
in smaller factories. It extended the provisions of the Factories
Act, dealing with health and safety, children, and registration
of factories, to establishments employing not less than ten persons,
if these latter included juveniles. In addition, it authorised the
provincial Governments to apply these provisions to establishments using power, in which juveniles were employed, even if the
average daily number of workers engaged was less than ten. The
1945 amendment (Act III of 1945) provided for the grant of ten
paid annual holidays to adult workers, and fourteen to child workers
(twelve to fifteen years of age), with the possibility of accumulating
the holidays over a period of two years.
The Governments of the Central Provinces (by Act XXXVI of
1939) and of the Punjab (by Act VII of 1940) also amended the
Factories Act 1 in order to require a fee in respect of the registration
of factories for the purpose of defraying the expenditure on the
factories inspectorate. The Punjab Act, in addition, prohibited
the unauthorised establishment of new factories or the enlargement
of existing factories for the manufacture of certain specified articles,
as a means of regulating industrial development in the province.
An amendment was introduced in Madras (Act VI of 1941) in
order to restrict the medical examination of adolescents (persons
fifteen to seventeen years of age) and children (persons under
twelve years of age) for ascertaining their fitness for employment
to cases in which the demand for such labour was assured.
As was remarked by the Royal Commission on Labour, the
conditions of work in the numerous smaller workshops in the
country, including those in which bidis (an indigenous brand of
cigarettes) are made, are far from being satisfactory. In the
Central Provinces, legislation was passed in 1937 to bring these
workshops under control. As a further step in that direction, in
1941, the Government drew up model by-laws, under the Central
Provinces and Berar Municipalities Act, for the regulation of
1
The provincial Governments are responsible for the administration of the
Act, and have rule-making powers and powers to regulate inspection.

CONDITIONS OF WORK

53

conditions in bidi factories. These by-laws, which it was expected
the municipal and other local bodies in the province would adopt,
required the bidi factories to be licensed and one of the conditions
prescribed for the grant of a licence was the establishment of the
factory in healthy surroundings and with satisfactory sanitary
fittings.
The Indian Mines Act was amended in 1940. The amendment
(Act XXIV of 1940) required the owner of a coal mine to pay the
salaries and wages of the manager and the supervisory staff, and
its purpose was to ensure that the supervisory staff, which would
have to take the necessary measures for the safety of the miners,
would be directly responsible to the owner. As a rule, it was the
contractors who worked the coal mines, and they were interested
only in the output. If the supervisory staff depended on them,
it could hardly be expected to manifest the requisite care in respect
of safety measures. Amendments of a minor character, calculated
to reinforce the safety measures in coal mines, were also made in
1940, 1942 and 1944 to the Coal Mines Safety (Stowing) Act, 1939.
Some headway was made in the introduction of shops legislation.
The Bombay Shops and Establishments Act (Act XXIV of 1939),
the Punjab Trade Employees Act (Act X of 1940), the Bengal
Shops and Establishments Act (Act XVI of 1940), and the Sind
Shops and Establishments Act (Act XVIII of 1940) were all
instances of attempts to break fresh ground in the field of labour
legislation. The precise nature of the provisions varied from
province to province, but in general they covered such matters
as the minimum age of admission to employment in commercial
establishments, hours of work, weekly rest and annual holidays.
The Government of India, for its part, consulted the provinces
on the need for central legislation on the subject. As a result of
the discussion, the Weekly Holidays Act (Act XVIII of 1942)
was passed. The Act, which applied to the whole of British India,
but could be put into operation only if and when the provincial
Government so desired, provided for the closing of shops, commercial
establishments, restaurants and theatres for one day in the week.
Provincial Governments were empowered to add a half-day, and
the weekly holidays were to be paid holidays.
Reference has been made above to certain amendments to the
Workmen's Compensation Act made in consequence of the adoption
of schemes to provide compensation for war risks to Indian industrial
workers and seamen. The only other amendment of some importance made during the war to the workmen's compensation legislation was the Workmen's Compensation (Bengal Amendment)
Act (Act VI of 1942), containing provisions, on the lines of the

54

WARTIME LABOUR CONDITIONS IN INDIA

British Act, relating to the practical application of the measure,
including particulars about the assessment of the disability and
its origin and duration, for the guidance of the Workmen's Compensation Commissioner.
The most notable advance made in wartime with regard to the
provision of maternity benefits was constituted by the Mines
Maternity Benefit Act (Act X I X of 1941). The Act, which came
into force in December 1942, was the first instance of a central
measure dealing with maternity benefits. It was amended in
1943 (by Act XVIII of 1943) with a view to removing certain
ambiguities in the wording of the provisions, and in 1945 (by Act
X of 1945), as has been remarked above, in order to extend the
benefits to women employed on underground work in mines. In
May 1945 an Ordinance was issued enabling the Government to
require the mines in which women were employed to provide
crèches. The provincial additions to the legislation consisted of
the Punjab Maternity Benefit Act in 1943 (Act VI of 1943), and
the Assam Maternity Benefit Act in 1944 (Act I of 1944). 1
Various measures of less importance for the improvement of
conditions of work were also adopted by the provinces, and, at
the time of writing, the Central as well as provincial Governments
have numerous proposals at different stages of consideration.
Among these proposals, a scheme drawn up at the instance of the
Central Government for the institution of a system of health
insurance for industrial workers may be mentioned. The scheme,
as at first put forward, was confined to the more skilled trades.
Two officials of the International Labour Office, who visited India
at the invitation of the Government, to advise on the matter,
however, suggested the extension of the scope to all perennial
factories covered by the Factories Act, and the insurance of the
risks of sickness, childbirth and employment injury under a single
scheme, in the interests of economy and administrative efficiency.
The Central Government referred the proposed scheme, as amended
in the light of these suggestions, to the provincial Governments
and to representatives of employers' and workers' organisations
for their views. Subsequently, another official of the International
Labour Office was also deputed to India to assist the Government
in the preparation of a scheme of health insurance for Indian
seamen. It is hoped that it may be possible, without undue delay,
1
For an account of labour legislation in India, see I.L.O.: Industrial Labour
in India (Studies and Reports, Series A, No. 41, Geneva, 1938); see also, Bulletins
of Indian Industries and Labour, No. 74: Labour Legislation in India since 1937
(Delhi, 1945). An appreciation of the effect of the decisions of the International
Labour Conference on the evolution of Indian labour legislation will be found
in P. P. PILLAI: India and the International Labour Organisation (Patna University,
1931).

CONDITIONS OF WORK

55

to undertake the necessary legislation to bring these schemes
into operation. The long series of labour measures initiated in
India largely as a result of the impetus provided by the war of
1914-1918 contain a conspicuous gap in as much as little has been
done in respect of social insurance properly so called. The difficulties are, of course, considerable, but a beginning has to be made,
for a country of the industrial importance of India cannot for
long continue to be an exception to the general rule in most countries
of building up a suitable system of social security for their workers.

VII
The Remuneration of t h e Worker
The average earnings of workers covered by the Payment of
Wages Act, for the four years 1939, 1940, 1941 and 1943, are given
below. The corresponding figures for 1942 were not published
because the abnormal emergency conditions produced wide
fluctuations that year. The Payment of Wages Act, it must be
added, applies to all workers in organised industry receiving less
than 200 rupees a month, whether employed directly in the manufacturing process or engaged in incidental work, including clerical
work.
AVERAGE ANNUAL EARNINGS PER WORKER IN DIFFERENT
BRANCHES OF ORGANISED INDUSTRY, FOR THE FOUR YEARS,
1939, 1940, 1941 AND 1943

(Rupees)
Industry

Textiles
Engineering
Minerals and metals
Chemicals and dyes
Paper and printing
Wood, stone and glass
Skins and hides
Ordnance factories
Mints
Miscellaneous

1939>

1940

1941

1943

293.6
312.1
462.8
246.2
332.6
193.8
290.3
361.9
367.4
282.8

302.9
345.0
491.5
229.6
360.3
175.3
327.1
408.5
462.7
261.0

314.0
371.5
476.1
238.1
324.8
199.1
357.9
429.4
491.2
261.2

571.2
529.0
502.7
398.8
413.4
303.0
410.7
527.4
574.4
392.0

Source: Indian Labour Gazette, Vol. I, No. 6, Dec. 1943, and No. 11, May 1944; Vol. II, No. 10r
Apr.
1945.
1
Exclusive of figures for Assam.

The above returns included cost-of-living bonuses and other
allowances in cash, but not such benefits as the sale of foodstuffs
at concession rates or housing. The rates of wages and allowances
differed widely not only between one industry and another, but
even between one factory and another in the same region. The
figures should not, therefore, be regarded as indicative of actual
individual earnings.
The average annual earnings per worker for all industries
increased from 1939 to 1940 by about 3 per cent., and from 1939
to 1941 by about 6.3 per cent. The increase from 1939 to 1943,
however, was nearly 83 per cent. Compared with 1939, in 1941
the average annual earnings per worker declined in the chemicals

57

THE REMUNERATION OF THE WORKER

and dyes, paper and printing, and miscellaneous industries, but
increased in all others, more especially mints, ordnance factories
and the mineral and metal industries; while in 1943, the increase
was largest in textiles, followed by engineering and mints. In
1943, moreover, the average earnings per worker in the ordnance
factories were almost as large as in the engineering industry, and
they were lowest in the wood, stone and glass manufactures.
Although the wartime increase in earnings was as a rule confined
to industries employing a high proportion of skilled labour or
producing goods in urgent demand, the variations were largely
determined by the differential basic wage rates and the differences
in the rates of the cost-of-living and war bonuses.
In order to consider the effect of the war on real wages, it is,
however, necessary to take into account the wartime rise in prices.
The changes in the index number of wholesale prices for the whole
country, by groups of commodities, from August 1939 to March
1945 are shown below (annual averages).
INDEX NUMBERS OF WHOLESALE PRICES BY GROUPS OF

COMMODITIES, 1939-40 TO 1944-45
{Base: Week ended 19 August 1939 = 100)
1939-401 1940-41

1941-42

1942-43

1943-44

1944-45

125.6

114.8

137.0

171.0

236.5

244.2

127.5

108.6

124.2

166.2

268.7

265.4

118.8

121.5

146.9

165.9

185.0

206.0

Manufactured articles *

131.5

119.8

154.5

190.4

251.7

258.3

Sugar

121.0

100.0

102.0

127.0

146.0

158.0

Kerosene

109.0

122.0

138.0

185.0

186.0

176.0

Cotton manufactures

117.0

118.0

173.0

292.0

422.0

293.0

Commodity group

General index
Agricultural commodities
Raw materials

3

2

Source: RESERVE BANK OF INDIA: Retort on Currency and Finance for the year 19Ü-Í5 (Bombay,
1945),
Statement II, p. 100.
1
For seven months ended March 1940. 2 Rice, wheat, tea, groundnuts, coffee, sugar, tobacco,
copra, cotton (raw), jute (raw)4and linseed. 3 Pig iron, coal, lac, wool (raw), hides and skins
(raw), kerosene and petrol.
Cotton manufactures, jute manufactures, cement, galvanised
corrugated sheets and leather.

There was a considerable rise in the prices of all commodities
during the first few months of the war, stimulated probably by a
speculative accumulation of stocks in the expectation of a continued
rise in prices. A recession, however, followed as a result of the
lull in active military operations, and the indices for "food and
tobacco" and "other agricultural commodities" (19 August

58

"WARTIME LABOUR CONDITIONS IN INDIA

1939 = 100) fell from 117.9 and 151.5 respectively in March 1940
to 103.8 and 98.2 respectively in August of the same year. Since
then the prices of all commodities have risen, although it was not
until after 1941-42 that the prices of agricultural commodities
reached the December 1939 level. By June 1943 the general index
of wholesale prices for the whole country had risen by over 50 per
cent., as compared with June 1942. Although the increase was
more or less uniformly distributed over the price levels of primary
commodities as a whole and of manufactured articles, there were
considerable variations in the prices of different commodities.
The rise in the case of food and tobacco and of other agricultural
commodities, which was especially pronounced, was 87 per cent.
and 79 per cent, respectively, as against 8 per cent, only in that
of raw materials. 1
Prices in different parts of the country showed large variations
as a result of difficulties of transportation and local differences in
respect of supplies and purchasing power. During the eleven months
ending May 1943, for instance, while the index number of wholesale
prices for the whole country (compiled by the Economic Adviser
to the Government of India) showed an increase of 50 per cent.,
the corresponding increase in the case of Calcutta was 79 per cent.
The general index of wholesale prices in Calcutta (July 1914 = 100)
averaged 96, 109, 121, 141, 187, 311 and 302, respectively, during
the seven years 1938 to 1944. The highest levels during this
period were reached in the summer and autumn of 1943. T h e
general index of wholesale prices, which had risen from 137 in
June 1941 to 182 in June 1942 (33 per cent.), advanced further
to 325 in May 1943 (79 per cent, over June 1942). The indices
for cereals and pulses, which were 154 and 151, respectively, in
June 1942, had, however, shot up to 473 and 374, respectively,
in May 1943, while, during the same period, sugar showed a smaller
rise from 210 to 311, tea, after a rise in the winter months, declined
from 259 to 192, and "other food articles" rose from 294 to 545. 2
The upward trend of the general index for the whole country
was checked after June 1943 (241.4). It fluctuated mildly around
235 till June 1944, when it began to rise again. It stood at 247.8
in March 1945. The average for 1944-45 was 244.2 as against
236.5 for 1943-44, an increase of 3 per cent, over the previous
year, as compared with an increase of 38 per cent, during 1943-44
over 1942-43 and 25 per cent, during 1942-43 over 1941-42. Because
1
RESERVE BANK OF INDIA: Report on Currency & Finance for the year 1942-43,
Statement II, p. 72; Report of the Central Board of Directors for the Year Ended
the 30th June. 1943, p. 8.
8
Idem: Report on Currency and Finance for the year 1944-45, Statement I. p. 99;
Report of the Central Board of Directors, op. cit.

THE REMUNERATION OF THE WORKER

59

of growing war demands and a continued increase in imports, the
prices of manufactured goods rose sharply; the index for 1943-44
was 251.7, and it was 258.3 for 1944-45. The prices of cotton
manufactures increased by over 4-00 per cent, (as compared with
August 1939), and the index, which reached 505 in May 1943 and
513 in June 1943, averaged 422 during 1943-44. It fell thereafter
and averaged 293 during 1944-45. The prices of industrial raw
material—jute, cotton—rose less rapidly than the prices of consumers' goods, largely because of difficulties of exports and shipping.
The rise in prices was higher in India than in most of the other
Allied belligerent countries. The quarterly index of average
monthly wholesale prices (July 1939 = 100) rose from 105 in JulySeptember 1939 to 342 in July-September 1943, and it was 299 in
October-December 1944. The corresponding figures for the United
Kingdom were 102, 166 and 170, for Canada, 103, 138 and 140,
for the Union of South Africa, 98, 153 and 156, and for the United
States, 102, 137 and 139, respectively. 1
Although the changes in wholesale prices reflect the general
trend of the price level, they are not a sufficient indication of the
movement of retail prices and prices in local markets, which determine the cost of living of the workers. The working class cost-ofliving indices which are available for a number of cities provide
a clearer indication of the effects of the wartime increase in prices
on the worker's income. 2
It will be seen that between August 1939 and July 1944 the
working class cost of living rose by 130 per cent, in Bombay,
189 per cent, in Ahmedabad, 227 per cent, in Cawnpore, 107 per
cent, in Madras, and 182 per cent, in Lahore. In Calcutta, according
to an unofficial estimate, the increase was even greater: between
1941 and 1944 the cost of the daily necessities of life other than
textiles rose by 250 per cent. 3 The latest figures available at the
time of writing show a declining trend generally in the cost of living
from August 1944 to January 1945. However, while the workers*
earnings in organised industry increased between 1939 and 1943
by approximately 85 per cent., the cost of living increased during
the same period by 135 per cent, in Bombay, 218 per cent, in
Ahmedabad, 214 per cent, in Cawnpore, and 207 per cent, in Lahore.
It is evident, therefore, that the cost-of-living bonus paid to the
workers was insufficient to enable them to maintain even their
1
Idem: Report on Currency and Finance for the year 1944-45, Statement II;
and table 3, p. 8.
2
See the table overleaf.
3
The Statesman (Calcutta), 21 and 28 Apr. 1944.

5

60

WARTIME LABOUR CONDITIONS IN INDIA

WORKING CLASS COST-OF-LIVING INDICES (5 CENTRES), 1939-1944
(Base: August 1939=100)
Date

Bombay

Ahmedabad

Cawnpore

Madras

Lahore

1939
August
October

100
103

100
103

100
105

100
106

100
104

109
108

111
108

114
109

109
109

109
102

1941
January
July

111
120

108
121

110
126

110
115

113
114

1942
January
July

130
160

130
160

145
190

119
136

143
166

1943
January
July

193
225

237
288

225
341

164
185

264
275

1944
January
July

227
230

293
289

304
327

197
207

293
282

1945
January

218

282

301

217

283

1940
January

July

Source: Indian Labour Gazelle. July 1943-May 1944 and April 1945. In Bombay the index
numbers were readjusted, consequent upon the introduction of rationing in May 1943, on the
basis of the purchases made by the working classes during the month in Question in Government
grain shops, or similar depots run by employers for the sale of grain at concession rates; similar
changes in the calculation of current expenditure on cereals were made in Ahmedabad in January
1944; and in Madras, as from February 1945, the basis of calculation for the "miscellaneous group"
was changed in order to take into account the increased expenditure on the items in question.

low pre-war standard of living unimpaired. 1 I t has been remarked
that the effects of the inflation were at least in part counteracted
by the wartime expansion of employment and the consequent
increase in the aggregate earnings of workers' families. This may
well be true to some extent, although no statistical information
is available by which it might be measured, but such a situation
has only made it the more urgent to devise measures for the
maintenance, as far as possible, of the wartime level of employment
after the war.
1
For instance, in Bombay and Ahmedabad, where the textile workers are
reported to have received a higher rate of cost-of-living bonus than in other
textile centres, the working class cost-of-living index (Aug. 1939 = 100) rose
between Jan. 1940 and Mar. 1943 from 109 to 198 and from 111 to 237, respectively, while the monthly cost-of-living bonus to the cotton mill workers, averaged
over the same period, formed only 24 per cent, and 26 per cent, respectively
of their average earnings.

THE REMUNERATION OF THE WORKER

61

The inflationary trend was caused by numerous factors: the
heavy war expenditure and the consequent expansion of currency,
the inadequacy of civilian supplies, the difficulties in the way of
the organisation of a satisfactory system of price control and
rationing in so large a country with a predominantly rural economy
and numerous administrative divisions, the delay in the establishment of the necessary machinery of price control and rationing
and the small extent of Government borrowing and taxation.
As compared with other Allied belligerent countries, such as the
United Kingdom or Canada or the United States, the situation in
India left much to be desired. The comparison is, however, hardly
justified, for while more energetic action during the early period
of the war to control prices might have produced less unsatisfactory
results in some respects, by far the greater part of the difficulty
in the organisation of the country for war was doubtless due to
its undeveloped condition from the economic as well as the political
point of view.
If the organisation of social security is to be actively promoted
in India, it will be necessary to secure far more detailed statistical
information relating to labour matters, including wages, 1 than
has hitherto been available. All social security measures, except
those of the most rudimentary kind, have for their basis precise
actuarial data, which can only be derived from an adequate system
of wage regulation. The war has served to demonstrate the importance of such regulation, and it is satisfactory to note that the
Standing Committee of the Tripartite Labour Organisation decided,
in May 1943, that the collection of wages and hours statistics
should be proceeded with as a first step in the enforcement of the
Industrial Statistics Act (Act X I X of 1942). The Act, which made
provision for the co-ordination of labour statistics by the Central
Government, applied to the whole of British India, but was to be
brought into force in the provinces only when their Governments
decided to do so. Earlier in the war, a similar measure—the
Collection of Statistics Act (Act X X X I V of 1939)—was adopted
in the Central Provinces.
It may also be noted in this connection that the Second
Conference of the Tripartite Labour Organisation, which was
held in September 1943, unanimously passed a resolution recommending the establishment of machinery to prepare data
concerning the existing social conditions, including wages and
1
For a discussion of the factors determining wages a t present in India and
suggestions for the improvement of the situation, see D. R. GADGIL: Regulations
•of Wages and Other Problems of Industrial Labour in India (Poona, Gokhale
Institute of Politics and Economics, 1943).

62

WARTIME LABOUR CONDITIONS IN INDIA

earnings, with a view to planning a policy of social security for
labour. In pursuance of that resolution, the Central Government
appointed a committee to make the necessary investigations 1
and strengthened the statistical staff of its own Labour Department in order to assist the work of the committee.

1
The Labour Investigation Committee has published in 1946 a series of reports
on conditions in 38 selected industries, as follows:
Mining: coal, manganese, gold, mica, iron ore and salt;
Plantations: tea, coffee and rubber;
Factories: cotton, jute, silk, woollen, mineral oil, dockyard, engineering,
cement, matches, paper, carpet weaving, coir matting, tanneries and leather
goods manufacture, potteries, printing presses, glass, chemical and pharmaceutical works, shellac, bidi-making, mica splitting, sugar, cotton ginning and
baling and rice mills;
Transport: tramways and buses and non-gazetted (lower grade) railway staff;
Other types: port labour, municipal labour, central Public Works Department
and rickshaw pullers (cf. Indian Trade Bulletin, New Delhi, Vol. I I . No. 9, 1 M a y
1946).

Vili
Wartime Evolution of Labour Policy
The wartime evolution of labour policy was authoritatively
summed up by the Member for Labour of the Viceroy's Executive
Council, Dr. B. R. Ambedkar, at a press conference in New Delhi
in October 1942. 1 Pre-war legislation, he said, had dealt with
three main types of questions: those covered by the Factories
Acts and other similar legislation; those dealt with by the Workmen's Compensation Act and the Payment of Wages Act; and those
relating to the regulation of industrial relations with which the
Trade Disputes Act and the Trade Unions Act were concerned.
Legislation during the war had been voluminous, but the Defence
of India Rule 81 (A), the Essential Services (Maintenance) Ordinance and the National Service (Technical Personnel) Ordinance
might be regarded as typical. These latter measures had imposed
certain restrictions on the workers. The first required, for instance,
that in all cases in which a strike was contemplated a fortnight's
notice must be given. While the rule had formerly been confined to
public utilities, it had been generally applied during the war.
But the rule also enunciated the important principle of compulsory
arbitration and of the enforcement of the arbitrator's award.
Compulsory arbitration had in fact been applied up to that time
in some 25 cases.
The two Ordinances mentioned debarred persons from leaving
their jobs and enabled the Government to transfer a certain proportion of the labour force from one industry to another, but they
also empowered the Government to prescribe wages and fair
conditions of service when those restrictive provisions were applied.
Many strikes had been ineffectual in the past and had brought no
benefit to the workers. Such a thing could not happen under the
existing legislation because of the distinct provision that if the
workers wanted to go on strike, and if they formulated definite
grievances, the Government was bound to refer the matter to
arbitration. If the arbitrator found the demands just and proper,
the Government had the power to enforce the award. That was a
great advance on the chaotic conditions which prevailed previously.
The other principle, the right to fair wages and fair conditions
of labour, was also new. Those two principles would never be
dislodged, but would be amplified and enlarged in subsequent
legislation.
1

The Statesman (Delhi), 31 Oct. 1942; The Leader (Allahabad), 3 Nov. 1942.

64

WARTIME LABOUR CONDITIONS IN INDIA

The Government had itself opened or had caused employers
to set up a number of shops at which food grains were sold at cost
price to the workers, as a measure of special assistance at a time
when the prices of essential commodities had risen abnormally.
That step might appear to be no more than charity, but underlying
it was the very important principle that the Government recognised
that, next to military requirements, labour requirements should
be assigned priority. The principle might not have been laid
down in so many words, but the fact remained that the Government had agreed to the opening of such shops and that it had
further been agreed that a portion of any loss on such shops might
be charged to the Central Government. The Government had
also the power to secure stocks of food grains for labour in an
emergency, had undertaken to institute air-raid precaution
measures both in factories under its control and in others, and had
accepted the principle of the provision of relief for the higher cost
of living during the war at a flat rate, instead of a rate varying
with the wages. The flat rate benefited the lower paid worker.
There was also the appointment of labour welfare advisers
to the Government of India. For the successful administration
of welfare work, three conditions were necessary: the establishment
of direct contact between the Central Government and the workers;
the dissemination of information among the workers on what the
Government had done for them ; and the establishment of machinery
by which the Central Government would be informed of the
situation as soon as it became unsatisfactory, so that necessary
action might be taken. The appointment of the welfare officers
was a most important step.
Under the present Constitution, the Central and provincial
Governments had concurrent jurisdiction in respect of labour
legislation, and the administration of Central labour laws had to
be left to the provinces. Wartime labour legislation had conferred
new powers on the Central Government, and it was to be hoped
that it might prove to be a step in securing greater control of
labour matters by the Centre. The Indian Constitution had much
in common with the Constitution of the United States, which was
a source of many difficulties for labour as a result of the dichotomy
of Federal and State powers. It had been held in the United
States that the States by themselves were unable to deal fully with
labour measures and that the Federal Government should come to
their aid. The problem had been solved by a scheme of grants-inaid, and the extent to which the Federal Government had by that
means been able to secure control of the administration of labour

WARTIME EVOLUTION OF LABOUR POLICY

65

measures had been described in recent reports. It was to be hoped
that it might be possible to follow a similar procedure in India.
In a subsequent talk 1 , which was broadcast, Dr. Ambedkar
further observed that Indian labour had secured many gains during
the war and would obtain many more. But Indian labour was not
content with fair conditions of work, it wanted fair conditions of
life as well. It wanted liberty, government by the people both
in name and in fact—including the right to equal opportunity and
the fullest facilities for growth for every individual according to his
needs, which it was the duty of the State to provide; equality,
the abolition of privileges of every kind, in law, in the civil service,
in the Army, in taxation, in trade and in industry, the abolition of
all processes leading to inequality ; and fraternity, an all-pervading
sense of human brotherhood unifying all classes and nations. The
creed of Indian labour was internationalism, and nationalism was
to it only a means to an end. Labour was not prepared to make
a fetish of nationalism. If nationalism meant the worship of the
ancient past—the discarding of everything that was not local in
origin and colour—then labour could not accept nationalism as

its creed. Labour could not allow the living faith of the dead to
become the dead faith of the living. Labour would not allow the
ever-expanding spirit of man to be strangled by the hand of the
past which had no meaning for the present and no hope for the
future; nor would it allow itself to be cramped by a narrow jacket
of local particularism. Labour must constantly insist upon renovating the life of the people by being ever ready to borrow in order
to repair, transform and recreate the body politic.
The war
was full of potentialities for good. It was both a war and a
revolution, a revolution which demanded a fundamental change in
the terms of association between man and man and nation and
nation—are planning of society. In this sense it was a people's war,
and, if it was not, it could and should be made into a people's war.
The Secretary to the Government of India in the Department
of Labour, Mr. H. C. Prior, also commented on the labour policy
of the Government in the course of a talk 2 which was broadcast.
Indian labour, he said, held, in the words of the Constitution of the
International Labour Organisation, that peace should be based on
social justice. The Government had taken certain steps, and was
contemplating others, calculated to help labour to work alongside
of the Government and employers to achieve that end. The
Government's policy in the circumstances was one which would
be conducive to maximum war production and might be summed
1
Indian Information (New Delhi), Vol. 12, No. 107, 1 Jan. 1943.
s Idem. Vol. 12. No. 108, 15 Jan. 1943.

66

WARTIME LABOUR CONDITIONS IN INDIA

up as "full and free contact between the Government, employers
and workers, steady production, and fair conditions of work for
all". Such tripartite collaboration would be possible only if there
was a sound trade union movement. The Indian trade union
movement was not yet strong, and many of the existing trade
unions had not been affiliated to the main all-India associations,
but the Government recognised the importance of the development
of trade unionism and was, therefore, fully committed to the
encouragement of a sound trade union movement.
*

*

*

Even a short descriptive sketch of wartime labour conditions in
India, such as has been attempted in the foregoing pages, would
seem to justify the conclusion that the Second World War imposed
an immensely greater strain than the First on Indian economy.
The First World War, it is true, had also led to industrial development, but it did not demonstrate as forcibly as the Second the
difficulties of the organisation of food supply or labour supply in
the existing conditions. It is often too readily assumed that the
abundance of human resources in India is in itself a source of
strength which might be turned to any desired purpose with little
or no preparation. The war showed that, in the conditions in India,
it was of the first importance to provide the workers with sufficient
food. Both the trainees of the Labour Department's training
scheme and the members of the Pioneer Civilian Corps—a formation
of mainly unskilled workers for the construction of roads, bridges
or aerodromes or other similar employment for the Army—had
in many instances not only to be provided with training but also,
as a preliminary measure, with good nourishing food and physical
instruction in order to fit them for training. Furthermore, it was
made clear that training for employment in the highly skilled
trades in modern industry is a long and arduous process, which
can hardly be improvised. Finally, it became no less evident that,
notwithstanding the high praise bestowed on the Indian worker's
quick adaptability to the exigencies of complicated machine manufacture 1 , illiteracy is a serious handicap. It may be recalled in
1
A special correspondent of The Times (10 April 1942) in an article entitled
"India's Unused Resources" observed:
There is an immense possibility for the development of training in India.
Large numbers of workers can achieve a surprising mechanical dexterity in a
short space of time, and in many cases develop a capacity to understand the
mechanical and physical principles on which the technique is based. This is
true even where, as in India, mass illiteracy remains a formidable obstacle.
A similar remark was also made by the American Grady Mission, which visited
India soon after Japan's entry in the war in order to investigate the possibilities
of increasing Indian wartime production.

WARTIME EVOLUTION OF LABOUR POLICY

67

this connection t h a t t h e R e p o r t of t h e Royal Commission on
L a b o u r , t o which reference has been m a d e before, s t a t e d :
In India nearly the whole mass of industrial labour is illiterate, a state of
affairs which is unknown in any other country of industrial importance. It is
impossible to overestimate the consequences of this disability, which are obvious
in wages, in health, in productivity, in organisation and in several other directions.
Modern machine industry depends in a peculiar degree on education, and the
attempt to build it up with an illiterate body of workers must be difficult and
perilous.
M r . H a r o l d Butler also came t o a similar conclusion a t t h e end
of his visit t o the E a s t in 1937.
It is clear, he wrote in his report, that the introduction of industrialisation
is breeding the same problems in the East as in the West, but against an eastern
background their order of importance appears in a different light. The western
mind is mainly preoccupied with questions of wage rates, working hours, unemployment, social insurance, protection against industrial accidents and disease,
the safeguarding of women and children against exploitation, the organisation
of factory inspection, relations between employers and workers, to which have
been added in comparatively recent years the questions of housing, nutrition and
vocational training. All these problems have made their appearance over the
eastern horizon... Nevertheless, although there is a general endeavour to work
towards international standards in regard to conditions of employment and a
growing measure of success is being achieved, it would be misleading to suggest
that these problems, important as they are, dominate the social consciousness of
the East. They necessarily yield priority to the fundamental and interlocking
problems of population, poverty, illiteracy and disease.
In the last analysis, the measure of success achieved in bringing
these problems under control will be d e p e n d e n t upon t h e extent
t o which it is found possible to inculcate a m o n g t h e people a spirit
of high endeavour a n d determination t o e m a n c i p a t e themselves
from the limitations which t e n d to keep t h e m in a s t a t e of a p a t h y
a n d inefficiency.
In other words, the h u m a n element remains
the most i m p o r t a n t factor in t h e struggle against environmental
conditions a n d its strengthening is t h e core of t h e problem. N o
organisation, national or international, a d m i n i s t r a t i v e or advisory,
confined to fact finding or invested with powers to exercise discretion
or t a k e a n d implement decisions, can do more t h a n provide t h e
necessary framework t o render activity orderly, co-ordinated
a n d fruitful. T h e activity itself is primarily an individual product,
a n d t h e excellence a n d plenitude of the a c t i v i t y of a n y assemblage
of individuals is inevitably conditioned b y their insight and energy.
T o help t h e individuals to help themselves t o m a t c h the d e m a n d s
m a d e upon t h e m — t o devise means t o enable t h e m to release
themselves from t h e cramping effect of the fear t h a t t h e y are in t h e
grip of hostile forces, t o engender in t h e m t h e self-confidence t h a t ,

68

WARTIME LABOUR CONDITIONS IN INDIA

provided they acquire a proper understanding of the world around
them and are prepared to exert themselves sufficiently, they can
remain largely if not wholly masters of their destiny—is the ultimate
objective of all policy making.
Poor physique and illiteracy are serious drawbacks, which
Indian labour can be enabled to overcome only by long-term
planning. From the point of view of increasing production this
was probably the most outstanding lesson of the war. The proposals
for post-war reconstruction which have been made by the Central,
provincial and State Governments, as well as by representatives
of employers and workers, to build economic and social policy on
firmer foundations after the war show that the lesson has not
been lost on the country. These proposals are briefly described
in the following pages.

Part II
RECONSTRUCTION PLANNING
IX
The Central Government's Proposals
As early as March 1941, in the course of a debate in the Central
Legislative Assembly on the budget proposals of the Government
of India for the year 1941-42, the Member for Commerce of the
Viceroy's Council stated that the Commerce Department had
under active consideration the question of the transition from war
to peace in industry. He announced at the same time that it was
proposed to set up an interdepartmental committee for the investigation of reconstruction problems and expressed the hope that
the committee might have the advice of industrialists.
The Committee was set up in June 1941. In addition to the
Chairman, the Member for Commerce of the Viceroy's Council,
it consisted of the Economic Adviser to the Government and
representatives of the Railway Board and the Finance, Commerce,
Defence, Education, Health and Lands, Labour, and Supply
Departments. At the first meeting of the Committee four subcommittees were set up, to deal with labour and demobilisation,
disposal of stocks and contracts, public works policy, and trade,
international trade policy and agricultural development. Provision
was made for associating with each committee representatives of
commercial and industrial interests and labour, and it was also
decided to set up a consultative committee of economists, drawn
from the different universities in the country and presided over by
the Economic Adviser. The recommendations of the various
committees were to be communicated to the Governor-General in
Council for action.
In March 1943 it was felt that reconstruction had become an
urgent matter, to be taken up at the highest level by the Government as a whole. Accordingly, the Interdepartmental Committee
was replaced by a Committee of the Viceroy's Council, with the

70

RECONSTRUCTION PLANNING IN INDIA

Viceroy as Chairman and consisting of the Members for Civil
Defence, Defence, Labour, Supply, Commerce, War Transport
and Finance (and later, also the Member for Planning and Development), to deal with all matters of policy, exercise initiative and
co-ordinate and sanction plans. This Committee, which was
designed with a view to enabling definite decisions to be reached,
was provided with a separate secretariat. Policy committees,
consisting of representatives of the Governments of British Indian
provinces and Indian States as well as prominent non-officials,
were set up to deal with policy questions concerning resettlement
and re-employment ; disposals, contracts and Government purchases;
transport; posts and aviation; public works and electric power;
trade and commerce; industries; shipping; and agriculture, forestry
and fisheries. A General Policy Committee was constituted to
advise the Government on major matters of policy and also on
matters which did not fall within the purview of one or the other of
the various policy committees and on the question of priorities.
Official committees, with Secretaries to the Government as chairmen, were also formed to deal with the technical preparatory
work and carry out a preliminary examination of the proposals.
One of these official committees was especially charged with the
function of co-ordinating the activities of the various departments
in respect of social services.
Commenting on the reorganisation of the Reconstruction
Committee, the Finance Member of the Viceroy's Council, in
his budget speech to the Legislative Assembly in March 1943,
observed that the Government had been considering a proposal
to constitute a fund for the purpose of financing reconstruction,
but that the important point was to have the plans for reconstruction made well in advance, since the capital goods market
in the post-war world would be a seller's and not a buyer's market
for a considerable period of time.
According to a letter, dated 3 July 1943, from the Government
of India to the International Labour Office, the work already
completed or in various stages of preparation at that date in respect
of reconstruction planning included the following: a scheme for
the development of welfare services in the areas in which men
were recruited for the armed forces; a survey, in conjunction with
the provinces, of the land that might be assigned for the settlement
of demobilised soldiers; a scheme for the utilisation of the Military
Reconstruction Fund (a fund set up by the Government for the
purpose of financing special schemes for the promotion of the
welfare of demobilised soldiers) ; preliminary plans for the establishment in the departments concerned of organisations for the disposal

CENTRAL GOVERNMENT'S PROPOSALS

71

of the remaining stocks of provisions and supplies; road development and development of civil aviation ; and memoranda on matters
of policy concerning agriculture, forestry and fisheries. A questionnaire designed to elicit from representatives of industry their views
on the development plans and on the requirements in capital goods
was also nearing completion.
Since the receipt of the communication referred to above, two
reports have been published by the Reconstruction Committee on
the progress made in drawing up plans, one in March 1944 and the
other a few months later. x The first report gives an indication,
in broad outline, of some of the problems which were being examined
by the Government, and the second a summary of the views of the
departments of the Government of India on various proposals. The
later report specifically states that while it was not possible for the
Government to arrive at final conclusions on matters of policy
until a more definite picture of t h e plans of the provinces as well

as the Centre could be drawn, the proposals mentioned were meant
to provide guidance on the lines on which reconstruction planning
should proceed.
GENERAL OBJECTIVES OF PLANNING

The reports contain a discussion of the general objectives of
planning. It is recognised that "the ultimate object of all planning
must be to raise the standard of living of the people as a whole and
to ensure employment for all", and that to that end, the purchasing
power of the people must be increased by improvement in the
efficiency and consequently the productivity of labour on the one
hand, and a simultaneous development and reorganisation of
agriculture, industries and services on the other. As agriculture
is and will remain the country's most important industry, the
stabilisation of the prices of agricultural products at an economic
level is indispensable for economic development. But only by
intensive industrial development will it be possible to enable the
pressure of population on the land to be relieved and to procure
the necessary means for the improvement of national defence
and of living conditions, particularly in respect of education, public
health and housing. The measures proposed in the reports have
been designed accordingly, and also to remove "the existing glaring
anomaly of immense wealth side by side with abject poverty"
by bringing about a more equitable distribution of the wealth that
1

GOVERNMENT OF INDIA, RECONSTRUCTION COMMITTEE OF COUNCIL:

First

Report on the Progress of Reconstruction Planning and Second Report on Reconstruction Planning (New Delhi. 1944). These reports form the basis of t h e
account of the Government's policy and proposals contained in the following;
pages.

72

RECONSTRUCTION PLANNING IN INDIA

is produced. It is especially stated that besides these general
measures, the objective of the Government will be to take special
steps to bring about an amelioration in the condition of the backward classes of the community, including the "scheduled castes",
and that "it should be the special responsibility of the provincial
Governments and local bodies [municipal and district boards]
to see that early measures are taken to remove the handicaps of
these classes and to raise them to the level of their more fortunate
fellow-citizens".
The main short-term objectives, those of reconstruction properly
so called, are stated to be, among others: the resettlement and reemployment of defence service personnel and of labour displaced
from war industry, military works, etc.; the orderly disposal of
surplus military stores and equipment, land and buildings; the
conversion of industry from war to peace; and the removal or
adjustment of controls to suit peace conditions. The important
long-term objectives, involving large capital expenditure, include:
the development of electric power in order to facilitate industrial
development and to a lesser extent agricultural development,
pump irrigation and rural industry; industrial development with
special reference to the production of capital goods and the consumer goods required by the bulk of the population, as well as the
maintenance and development of small-scale and cottage industries ;
the development of road communications and transport services
on a comprehensive scale, especially in rural areas ; and agricultural
improvement, including the development of irrigation and the
institution of anti-erosion and land-reclamation projects.
It is emphasised that the development of public health, public
instruction and housing and other social services is essential not
only as a welfare measure but also as a prerequisite to general
economic development.
T H E FINANCIAL POSITION

The Reconstruction Committee appreciates that the diversity
in the character and scope of reconstruction problems precludes
the formulation of closely defined principles of finance of universal
applicability, and that planning must largely be a matter of choice
between "unlimited wants and limited resouices". The need for
the provision of large capital resources at reasonable rates of interest
for development and the consequent possibility of the institution
of a system of priorities and of control over the floatation of new
companies are emphasised. It is suggested, however, that, pending
further detailed investigations, plans should be drawn up on the
assumption that capital expenditure on electrical development,

CENTRAL GOVERNMENT'S PROPOSALS

73

roads and irrigation would be financed by public loans, and industrial
development by private capital except where participation by the
State is decided upon. Recurring Government expenditure on
development projects and social services, including interest charges
on Government loans, would be met out of revenue.
It is further pointed out that while the greatest difficulty is
likely to arise in regard to the financing of social services, it is
common ground that their full development must eventually
depend on an increase in the national income and the recruitment
and training of the large staffs required. Attention is drawn to the
experience of the United Kingdom, where, during the period 19001934, there was a striking and simultaneous expansion in the social
services and in the revenue. The Committee suggests the desirability of exploring ways and means of local taxation for the
financing of social services.
The Committee also recalls the speech made by the Finance
Member of the Viceroy's Council in introducing the budget for
1944-45 in the Legislative Assembly, in the course of which he
observed that the Government fully recognised the need for large
sums for any effective development in the post-war period. The
magnitude of wartime finance, he said, had taught both Governments and the public to think in terms of figures which would have
frightened the older generation. The main resemblance between
wartime and reconstruction finance was that they both necessarily
involved a continuously high level of taxation and of borrowing
if the objective was to be attained. While it was impossible at
that stage to work out precisely all the details of the schemes
for raising the requisite finance for Government schemes, the
Government had estimated, on the basis of certain fundamental
assumptions, that a round figure of 10,000 million rupees might
be available for the first five-year period, commencing 1947-48
a n d ending 1951-52. Approximately half of this sum would come
out of the revenue and would be available for such of the Central
Government's development projects as were not financed by loans
and for making grants, recurring or otherwise. The remainder—
about 5,000 million rupees—might, it was felt, be raised by loans
by the Central and provincial Governments in the five-year period.
Additional amounts which could be raised from the market for
private investment might be of the same order as that estimated
for Government borrowings. The fundamental assumptions and
conditions on which the foregoing estimate was based were: (1)
that any constitutional or political changes which might be
introduced would not result in a radical departure from the present
economic and financial arrangements; (2) that a relatively speedy

74

RECONSTRUCTION PLANNING IN INDIA

rate of demobilisation after the conclusion of hostilities would
prove possible and a corresponding progressive reduction of the
defence budget be ensured; (3) that world conditions in the early
post-war period were such as to permit of full production and
employment; (4) that in the interests of the future development
of the country the Government of the day would be prepared to
impose, and the public would be prepared to accept or submit to,
full development and exploitation of the taxable capacity of the
country: in other words, that a determined effort would be made to
secure a sure and sound financial foundation for development and
expansion by such measures as an all-out taxation policy and the
deliberate working of the Government commercial departments
for profit; and (5) that the Government control over the issue of
capital was maintained and the borrowing requirements of the
Government were taken into consideration in its administration.
T H E CONSTITUTIONAL POSITION

As to the present constitutional position in respect of planning,
the Reconstruction Committee observes that the plans set out in
the reports have been drawn up on the basis of the existing Constitution, as it is not possible to anticipate the exact form the
future Constitution will take. Provincial autonomy exists over
a very large range of subjects, and the autonomy of most States is
complete as regards their internal administration. It is recalled,
however, that other countries with federal Constitutions, with
constituent units possessing a measure of autonomy far greater
than that of the Indian provinces, have felt the need to formulate
a common policy in the general interests of the country as a whole.
The proposals for reconstruction set out in the reports are not
intended in any way to prejudice the decisions that may be taken
in the future on the constitutional issue. A main feature of these
proposals is regionalism calculated to benefit the different parts
of the country in as equal a measure as is compatible with the
physical features and the natural resources of each part.
Although most questions concerning development are the
responsibility of the provinces, there is general agreement as to
the measures necessary over a great part of the field. For a task
of this nature and magnitude, a pooling of all resources will clearly
be desirable, if not indispensable, and this will inevitably entail a
considerable degree of co-ordination. Co-ordination is especially
necessary in respect of such subjects as resettlement, industrial
development, electric power, irrigation, road transport and road
planning. In certain matters requiring unified direction, it may
be possible to set up autonomous authorities with jurisdiction over

CENTRAL GOVERNMENT'S PROPOSALS

75

the whole country, in agreement with the provinces and the States.
In certain cases it may be desirable to set up regional authorities
on the lines of the Tennessee Valley Authority. The need for
national planning and the exercise of far more initiative by the
State than hitherto in all matters of social reform and economic
development is widely recognised.
METHOD OF PLANNING

The reports suggest that, in addition to an over-all plan for
reconstruction and development for the country as a whole, detailed
five-year plans should be prepared for each of the provinces and the
more important Indian States, as well as in respect of subjects
for which the Central Government is largely responsible. The
Central Government, in addition to initiating—in consultation
where necessary with provinces and States—plans and policies
in respect of questions for which it is directly responsible, proposes
to co-ordinate policy and scientific research, and provide technical
advice and financial assistance in suitable cases to the provinces
and States in the preparation of their own plans. While financial
considerations will have to be taken into account in the allocation
of priorities in the implementation of the proposed schemes, the
availability of trained staffs, materials and machinery will be an
important element. Accordingly, it is proposed that the following
measures might be undertaken as a preliminary step: the provision
of scholarships and studentships, in India as well as abroad, for
the training of technical and administrative staffs; the expansion
of the existing institutions and the provision of new ones for training
in engineering, agriculture, forestry, medicine and other branches
of science ; the survey of power resources and industrial production
potentialities of the provinces and States; and a review of the
existing administrative systems and methods with a view to reform,
where necessary. The Committee notes that, at the end of the
war, while the process of implementing the plans for agricultural
and industrial development and developing educational, health
and other social services would begin, such measures as the resettlement of demobilised soldiers and the development of irrigation,
electric power and roads would necessarily receive more urgent
attention.
T H E EMPLOYMENT POLICY

The Government's employment policy aims at the full employment of all those seeking work. But it is realised that employment
policy is in effect determined by industrial, agricultural, public
works and financial policies, or in other words by social and
e

76

RECONSTRUCTION PLANNNG IN INDIA

economic development generally. Accordingly, steps will be taken
for the efficient use of manpower and natural resources and the
establishment of suitable relations with other countries. The
labour supply will also be regulated.
A beginning has been made with the establishment of a system
of employment offices for the placing of skilled or semi-skilled
workers and of labour depots for the supply of unskilled workers.
This system will be extended and improved as employment expands
in consequence of the industrial and economic development for
which plans have been or are being prepared. In order to fit
workers formerly engaged in war service or industries for civil
employment, it has been decided to adapt to post-war requirements
the technical training scheme initiated by the Labour Department
of the Government of India for training workers for wartime
purposes.

X

Summary of Plans Prepared by the Central Government
A short account of the various plans which have been prepared
by the Central Government is given below.
RESETTLEMENT

AND

RE-EMPLOYMENT

OF FORMER

SERVICEMEN

Recruits to the armed forces have been drawn from a wide
range of occupations and from almost every section of the people.
The main line of division, so far as re-employment is concerned,
is between those who will look to the countryside for their livelihood
and those who will look for industrial or other employment in the
towns. Planning for the resettlement of former servicemen has
for its aims the adjustment of demobilisation, so far as possible,
to opportunities for settlement, the provision of machinery to
place former servicemen in employment on their discharge and to
train them for suitable occupations, and the promotion of appropriate resettlement and welfare measures for former servicemen
as a special class. Demobilisation schemes will be designed to
secure opportunities for officers and men for resettlement.
The employment offices will be called upon to give particular
attention to former servicemen, and, where necessary, special
military sections will be established in these offices. Particulars
of the qualifications and experience of service personnel are being
collected and recorded systematically to this end. Government
departments as well as private employers will be asked to reserve
a percentage of vacancies for, or give preference to, former servicemen. Schemes to give vocational training to servicemen before
demobilisation are being worked out with the aid of provincial and
State Governments. Efforts are also being made to secure special
educational and training facilities and concessions for officers and
men who have had their training interrupted by war service. In
addition to these measures, facilities will be provided to former
servicemen for settlement on the land and for the education of
their children. Social services especially designed to promote their
welfare, including rest houses, residential quarters, libraries, health
measures, etc., will also be provided. The Directorate of Welfare
and Amenities in the Army has a card index system which provides
the necessary information for placing each soldier in employment
on his discharge. The Military Reconstruction Fund, which is
financed by per capita contributions by the Government and

78

RECONSTRUCTION PLANNING IN INDIA

amounted to 50 million rupees in March 1944, is intended to be
used for the permanent benefit of former servicemen.
Since the publication of the reports of the Reconstruction
Committee of the Viceroy's Council on the general lines of policy
in regard to the resettlement and re-employment of former servicemen, the Directorate-General of Resettlement and Re-employment
has been very active. Detailed reports on the progress made up to
31 December 1945 and monthly reviews of current developments
in the following months have been issued.
ADAPTATION OF W A R INDUSTRIES TO PEACETIME PRODUCTION

Investigations have been made into the possibilities of the
utilisation of some of the ordnance factories for the manufacture
of civilian goods, as part of the problem of the adaptation of war
industries to peacetime needs. It is proposed to pursue these
enquiries with a view to making as much use as possible of the
machinery in ordnance factories for the production of consumers'
goods in short supply, and with a view to transferring surplus
factories ultimately to private enterprise.
TRADE POLICY

The suggestions made in the reconstruction planning reports in
respect of trade policy are as follows :
(1) As to export policy: replacement of the export of raw
materials by that of partially or fully manufactured goods;
avoidance of undue dependence on a particular market for the
disposal of a particular class of goods, and development of eastern
markets; grading of export goods and rigorous enforcement of the
established standards; formation of larger export units and improvement of the existing methods of trade; and establishment
of organisations by the State for trade with countries in which
trade is under State control, or in commodities or goods produced
by State-owned enterprises.
(2) As to import policy: avoidance, as a rule, of undue
dependence on particular markets, and consideration of the steps
to be taken to check the increasing tendency for companies domiciled abroad to establish branches and subsidiaries in India in
preference to employing local houses.
(3) As to wartime trade controls: their adjustment in sufficient
time to enable orders to be placed for the import of capital and
consumers' goods from abroad and the necessary shipping priority
to be obtained, to ensure the retention of pre-war markets and the

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

79

creation of new ones, and to secure the necessary foreign exchange
to finance imports.
(4) As to tariff policy : abstention from the imposition of export
duties for the protection of industries, imposition of such duties
for revenue purposes only sparingly and with great caution, and
imposition of small export cesses, where necessary, if they are
intended exclusively for the improvement of the industries
(including agriculture) on which they are based; continuance of
the revenue tariff on imports, with periodical revision of the tariff
schedules, maintenance of the existing policy of extending protection
to industries after careful investigations in respect of each case,
and resuscitation of the tariff board for the determination of the
measure of such protection.
The adhesion of India to a multilateral United Nations
Convention concerning commercial policy, and should no such
Convention be adopted, the conclusion of commercial treaties as
bilateral agreements with foreign countries on a most-favourednation or other suitable basis, are also recommended.
INDUSTRIAL DEVELOPMENT

The Government of India has appointed an Industrial Adviser,
with a suitable staff, to direct the planning of industrial development. An Industries Committee, consisting of representatives
of the more important industries and of the Central, provincial
and State Governments, has been set up to advise on questions
of policy pertaining to industrial development.
In addition, for the consideration of the development of particular industries or groups of industries, 28 panels, composed of
representatives of the industry or industries concerned and experts,
have been established, with officers of the Planning and Development Department of the Central Government to assist the panels
in their work. The recommendations of these panels will be coordinated with those of the provincial and State industries committees and then considered by the Government of India with
a view to establishing the controls and providing the facilities
that may prove necessary. Pending such consideration the
provinces and States proceed with their particular schemes.
The Government has made arrangements for leading Indian
industrialists to visit the United Kingdom and the United States
in order to enable them to acquire first-hand and up-to-date information of industrial development in these countries.
Provincial Governments have been asked to appoint special
committees to review the position of cottage and small-scale

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RECONSTRUCTION PLANNING IN INDIA

industries with particular reference to their types, capacity, location,
markets, availability of raw materials, etc. It is stated that the
Central Government attaches the utmost importance to the
development of cottage and small-scale industries as an essential
and integral part of industrial expansion, and considers that, in
addition to the surveys to be made by provincial Governments, it
should itself also examine the position of these industries from the
point of view of an all-India policy and has entrusted this work
to its Economic Adviser.
The planning of industrial development falls into two parts:
(1) the planning of the transition from war to peace; and (2) longterm planning.
As to the planning of development in the transition period,
information on the existing situation has been collected by means
of a questionnaire addressed to industrialists and by other means.
The question of the extent to which and the manner in which the
wartime State munitions, food, clothing and other factories might
be converted for the production of civilian requirements, either
under continued State ownership and management or by private
interests, has been under consideration.
The transitional plans are being co-ordinated with the longterm plans. These latter, admittedly, call for the imposition of
controls requiring the enactment of legislation with special reference
to the licensing of industries and the control of imports of capital
goods and of capital issues. The existing controls over the export
of capital goods in the United Kingdom and the United States
need to be taken into account, and steps will be taken to ensure
the grading and quality of the Indian products for export.
The sources of the supply of raw materials and of the power
required for production, as well as the location of the markets,
will determine the parts of the country in which industrial development should proceed. The pace of such development, in the early
post-war years at any rate, will in all probability be governed
more by the availability of machinery and technical staff than by
considerations of finance. The most serious difficulty will probably
be the dearth of technical staff, especially for the higher technical
managerial posts, and the initial efforts for reconstruction have
therefore been directed to securing facilities abroad for the training
of promising young Indian technical workers.
A more detailed statement of policy concerning industrial
development than that contained in the reconstruction planning
reports was issued by the Government in April 1945. 1 The
1

PLANNING AND DEVELOPMENT DEPARTMENT: Statement of Government's

Industrial Policy (New Delhi, 1945).

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

81

statement adds, however, that the views set out therein are to
some extent provisional, as it was not possible for lack of time to
consult the provincial and State Governments in the matter. The
Government was anxious that private industry should not be
impeded in its own reconstruction planning by doubt as to the
official policy in respect of industrial development.
The statement points out that although the development of
industries is a provincial subject under the Government of India
Act, 1935, it is open to the Central Government to bring the development of specified industries under its control by declaration by
law, if deemed expedient in the public interest. There can be no
doubt that the general economic policy pursued by the Government
under its own constitutional power exercised in the past a profound
influence on industrial development. The cotton textile, iron and
steel, and sugar industries, for instance, made rapid strides largely
as a result of the fiscal policy pursued by the Government. It is
realised that in the interests of co-ordinated development certain
industries should be brought under Central control. The Government of India Act indeed provided for such a contingency, and
accordingly, subject to the final decisions being made in consultation
with the provinces and States, it is proposed to bring the following
industries under Central control and to take the necessary legislative
measures for the purpose: iron and steel; manufacture of prime
movers; automobiles and tractors and transport vehicles; aircraft;
shipbuilding and marine engineering; electrical machinery; heavy
machinery, such as textiles, sugar, paper, mining, cement and
chemical; machine tools; heavy chemicals and fine chemicals,
chemical dyes, fertilisers and pharmaceutical drugs; electro-chemical
industry; cotton and woollen textiles; cement; power alcohol;
sugar, motor and aviation fuel; rubber manufacture; non-ferrous
metals industry; electric power; coal; and radio-engineering.
The principal objectives sought by the Government in promoting
industrialisation are stated to be: an increase in the national
wealth by the maximum exploitation of the country's resources;
the improvement of the defence of the country; and the attainment
of a high and stable level of employment. It is axiomatic in the
Government's policy that the additional wealth created by industrial
development should be distributed in a manner that may be regarded
as socially equitable.
The Government has decided to take positive steps to encourage
and promote the rapid industrialisation of the country to the
fullest extent possible. In this process, heavy industries, which
constitute the foundation of modern industrial life, must take
high priority, while at the same time a balanced plan in which

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RECONSTRUCTION PLANNING IN INDIA

consumption goods will have a due place will need to be worked out.
The formulation of an appropriate tariff policy to further
industrialisation is under consideration, and pending the determination of a long-term policy, suitable assistance or protection will
be provided to the large number of wartime industries during
the period of transition from war to peace.
A main question to be considered in the determination of
industrial policy is the extent to which the State should take part
in industrial enterprise. In India, ordnance factories, public
utilities and railways are owned and operated by the State. The
Government has also decided that the bulk generation of electric
power should as far as possible be a State concern. Basic industries,
including aircraft, automobiles and tractors, chemicals and dyes,
iron and steel, prime movers, transport vehicles, electrical machinery,
machine-tools, electro-chemical and non-ferrous industries may
be nationalised if sufficient capital is not forthcoming. Manufactures, such as salt, in which the tax element is more important
than the profit element may also be nationalised. The coal mining
industry represents a special case which will have to be examined
and dealt with separately.
All other industries will be left to private enterprise under
varying degrees of control. Industries of national importance
such as shipbuilding and the manufacture of locomotives will
be run by the State as well as by private interests. Normally,
State enterprises will be managed by the State, but in special
cases the possibility of management through private agencies for
a limited period may have to be explored. In some cases State
enterprises may be operated through public corporations.
With a view to preparing the ground for industrial development,
the Government has taken steps to ensure the co-ordinated development of transport facilities and the development of scientific and
technical research. Action has also been taken to improve and
extend the existing facilities for technical education. The Geological
Survey will be extended with a view to the development of the
mineral resources of the country; and in order to make as large a
volume of power as possible available for industrial development,
regional agencies will be set up wherever necessary.
Other forms of Government assistance to industry will include:
participation, by making loans or subscribing a share of the capital,
in industrial undertakings for which capital may not be forthcoming
in adequate measure; provision of a guarantee of the payment of
a minimum rate of dividend on the capital invested in certain
undertakings, or of the coverage of losses of revenue, over a specified
period; extension of financial support to research organisations set

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

83

up by industrial associations; purchase of supplies from Indian
industry; establishment, if necessary, of an Industrial Investment
Corporation; periodical examination of the tax system in order to
ensure that development will not be impeded by taxation; and
provision of assistance for the purpose of securing capital goods
or the services of experts from abroad.
The Government has also come to the conclusion that it must
take power to institute a system of controls. Control is inevitable
in planned economy, and wartime controls are to be replaced by
new ones, designed to prevent excessive concentration of industries
in particular areas and to ensure a balanced distribution of the
capital available for investment in the capital and consumers'
goods industries, agriculture and the social services. Accordingly,
it is proposed to take power to require a licence to be taken out
for the establishment of new factories or the extension of old
ones. A board, with provision for the representation of the Indian
States, has been set up to advise the Government in this matter.
Agricultural development will be undertaken almost wholly
under the auspices of the State, because the bulk of the agriculturists
are not in a position to provide the necessary capital.
Machinery with provision for the representation of the various
interests concerned will also be set up, after necessary consultations,
with the object of ensuring a reasonable standard of living for
industrial workers, preventing excessive private profits, extending
the external and internal markets, avoiding the unhealthy concentration of assets in monopolistic fashion and providing sufficient
facilities for technical training, particularly in the case of persons
belonging to minority and backward groups.
TRANSPORT AND COMMUNICATIONS

Roads and Road Transport
The outlines of post-war road and road transport planning
were drawn in the reports of two committees of experts, prepared
in 1943. The first, a technical committee, appointed by the Reconstruction Committee, published a report in November 1943,
outlining the principles on which road development should be
planned and including the following proposals for evolving and
enforcing a co-ordinated transport policy with the objective of
providing cheap and efficient transport for all by the means best
suited to the type of traffic involved: active development of motor
transport for the opening up of the countryside; encouragement of
short-haul goods traffic on roads; restriction, in the interests of
over-all transport economy, of long-distance goods transported
by road on routes served by rail, on the basis of public and economic

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RECONSTRUCTION PLANNING IN INDIA

need combined with scientific zoning; co-ordination of passenger
transport by road and rail, for the attainment of which the railways
should enter into road transport operation by taking a commanding
interest in it ; a scientific review of motor vehicle taxation ; development of alternative fuels such as producer gas; improvements in
the maintenance of statistical information on all transport matters;
and setting up of suitable administrative machinery to implement
the recommendations.
The second report was that of a Conference of Chief Engineers of
provinces, States and the Centre, which met at Nagpur in December 1940 and drew up the details of an all-India road plan, classified
under the heads of national highways, provincial highways, and
district and village roads, of a total mileage of 200,000 miles and
estimated to require a capital expenditure of 4,500 million rupees
and a recurring annual expenditure of 160 million rupees, the
national highways to be financed by the Centre. The report includes
recommendations for the execution of the plan under the heads
of standards, specifications, plant and machinery, estimating,
phasing, legal matters connected with land acquisition, finance,
administrative set-up, etc. Both the reports stress the need for
setting up a Central Road and Road Transport Authority, to be
designated the Indian Road Board, to deal with the development
of roads and road transport, the administration of the general
road transport policy and the regulation of road transport on the
national highway system, and to function as an appellate authority
to settle disputes.
The main recommendations in the reports have been discussed
with provincial Governments, and a substantial measure of agreement has been reached on essentials. The Central Government
has drawn up the details of the scheme for national highways and
proposes to accept financial responsibility for the construction
and maintenance of national highways in British India with effect
from the financial year 1947-48, subject to acceptance by the provinces of certain conditions. It has set up a Central Road Board
to act as an advisory body and to exercise certain of the functions
of the Centre in connection with the preparation and execution
of the plan. The provinces have for their part prepared five-year
road plans, and financial arrangements have been agreed upon
between the Centre and the provinces in order that road works
can be begun in areas where the need for providing employment
to demobilised servicemen and counteracting slump conditions
becomes pressing. A beginning has been made in road-rail coordination in certain provinces, where joint road-rail companies
for the operation of passenger services are being formed.

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

85

Railways
A basic plan, capable of being enlarged or adjusted to post-war
requirements, has been drawn up by the Railway Board, for the
improvement and expansion of the railways. Among the objectives
of this plan are: rehabilitation, repair and replacement of locomotives, wagons, coaches, track and other equipment, which have
been subjected to abnormal wear and tear, or whose renewal has
fallen into arrears as a result of the war; establishment of workshops for the manufacture of locomotives, boilers and other railway
equipment in India; absorption of demobilised Army personnel in
railway services ; formulation of a programme of annual replacement
of railway engines, wagons, coaches, workshop machinery and other
equipment, spread over a number of years and designed to assist
industrial development and improved services for goods, parcels
and passenger traffic; annual construction of 500 miles of railway
during a period of ten years; regrouping of railways; extension of
activities of railways to other transport services (road, air, etc.);
development of staff welfare organisations; provision of special
amenities for third-class passengers; and determination of a new
rates structure in accordance with post-war requirements. The
cost of this plan has been provisionally estimated at 3,190 million
rupees in the first seven years of the post-war period.
The programme of new constructions is being worked out in
consultation with the provincial Governments and Indian States.
The programme, so far as the provinces are concerned, has been
almost completed and a large number of surveys have already
begun. Substantial progress has also been made in respect of the
programme relating to the Indian States.
Shipping
The total tonnage of Indian deep-sea ships at the outbreak
of the war was less than 150,000 tons, and the Government of India
is pledged to a policy of assisting in the development of an Indian
mercantile marine. According to the reports of the Reconstruction
Committee of the Viceroy's Council, shipping policy should aim
at securing for Indian shipping an increased share of the coastal
trade, a substantial share in the near trades (e.g., Persian Gulf,
East Africa, Malaya and Netherlands East Indies), a fair share in
the eastern trades (especially those trades of which Japanese shipping has been dispossessed), and also a fair share in the trade
between India, on the one hand, and the United Kingdom, the
Continent of Europe and North America, on the other. It is expect-

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RECONSTRUCTION PLANNING IN INDIA

ed that the continued development of small (country) craft will,
in addition, be necessary in order to give maximum relief to the
railways.
Ports
It is considered that the capacity of the major ports at the
start of the post-war period will be adequate for the next few
years, but that the question whether it would be more economical
to construct new harbours or to modernise and develop smaller
ports will need to be examined by experts.
Inland Water Transport
The provincial and State Governments will take measures
to improve the navigability of existing waterways and extend them,
consider the possibility of using the irrigation canals for inland
traffic, and bring about an increase in the use of steamers, tugs,
power-driven barges and country craft.
Civil Aviation
The Government's policy aims at the development of civil
aviation with Indian capital and under Indian management, with
•opportunities for the employment of Indians. The Government
recognises its responsibility to ensure the provision of the ground
organisation for air services in and through India, and reserves
the right to control the agency through which any such ground
organisation is provided. In the matter of international services,
India will claim full reciprocal rights with other nations. In the
event of India's participation in any international through-services
on a reciprocal basis, the policy will aim at ensuring that such cooperation is not only financial but also technical and operational.
For the initial post-war period, plans have been prepared for a
system of trunk air services, designed for the social, commercial
and industrial development of the country as a whole. The services
planned would involve a route mileage of 11, 220 miles, and approximately 8.2 million miles a year. The necessary legislation for the
establishment of an Air Transport Licensing Board, responsible
for|the orderly development of air transport, has been passed.
The air services and the air route and aerodrome organisations
have been planned on a national basis, including the Indian States,
and in the international field India has participated in British
Commonwealth and Empire and international meetings and conferences.

SUMMARY OF CENTRAL GOVERNMENT'S FLANS

87

Postal and Telegraph Services
Under the stress of war conditions the postal, telegraph and
telephone services have expanded considerably, and these need to
be readjusted and redistributed with due regard to the demands
arising in post-war conditions. Plans have been prepared for a continuous expansion of the services with a view to providing, for
instance, the establishment of a post office in every village with a
population of 2,000 or more, a telegraph office in every town with
a population of 5,000 or more and a telephone exchange with a
trunk connection in every town with a population of 30,000 or
more. Amenities for the staffs employed in these services will
also be provided, and the question as to what additional activities
the postal, telegraph and telephone services might suitably undertake for the public benefit is receiving consideration.
DEVELOPMENT OF ELECTRIC POWER

The ultimate objective will be to secure the development of
electric power, with regional administration in so far as the constitutional position may permit. As one means to this end, the
provincial Governments will be empowered to set up statutory
electricity supply boards, and the trading arrangements of these
boards will be regulated. Broadly speaking, the policy to be
pursued in respect of the administration of public electricity supply
is that the ownership of new major undertakings will be vested in
public bodies rather than in commercial corporations. The policy in
relation to existing commercially owned electricity supply undertakings is generally to permit them to continue their operations,
albeit with the probable introduction of certain profit and rates
control provisions which are at present under consideration. When
options to acquire such undertakings arise under the terms of their
franchises, these options will generally be exercised. New franchises
for the starting of new undertakings will be granted only where the
provincial or State Government concerned is not in a position to
provide electric service for some time to come in that area.
A new organisation has been set up, known as the Central
Technical Power Board, which will act as a central planning authority for the initiation and formulation of major power schemes
throughout the country. The preparation of such schemes will be
undertaken in consultation with the provincial and State Governments in whose territory the scheme may be proposed. The
Board will have particular regard to the prospects for the development of several of the major river basins as multi-purpose river
development projects. To this end it has prepared a comprehensive

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RECONSTRUCTION PLANNING IN INDIA

project for the unified development of the Damodar River, which
rises in Bihar and passes through Bengal on its way to the sea. *
The Board will also concern itself with the adoption of standards in
technical practice in the electricity supply industry, and with the
preparation of schemes for the training of Indian engineers for the
industry.
MINING DEVELOPMENT

In view of the increasing need in the future for a well-co-ordinated national mining development policy, the Government will
take steps to bring under Central control all minerals of strategic
or key industrial importance, so far as it is possible to do so under
the Constitution. Model rules for the prospecting of minerals and
their subsequent exploitation will be framed in consultation with
the provinces and States, to which the Central Government will
be prepared to extend any necessary assistance by providing the
services of experts and technicians.
The question of the nationalisation of the coal industry in
all its aspects will also be examined, and research in the better
utilisation of coal, already initiated in collaboration with the Board
of Scientific and Industrial Research, will be pursued. The activities
of the Geological Survey of India, including such as have been
carried out by its Utilisation Branch during the war, will be
extended, and arrangements will be made to train the staff necessary
for the purpose.
IRRIGATION, WATERWAYS, DRAINAGE, ETC.

In respect of these subjects, the Central Government will take
steps to co-ordinate the provincial and State projects, provide
technical assistance wherever necessary, and even financial grants
in exceptional cases, and arrange for priorities for the supply of
materials necessary for the execution of projects. The Government
has appointed a Consulting Engineer for Waterways and Irrigation
to advise it in matters concerning waterways, irrigation and navigation. It has also set up an expert organisation, called the Central
Waterways, Irrigation and Navigation Commission, with, inter
1
The project involves the construction of eight dams and a barrage on the
Damodar River and its tributaries. It would cost a t a rough estimate 500
million rupees and should be completed in not more than ten years. With flood
control is combined the utilisation of t h e river for irrigation and the generation
of electric power, and there will also be possibilities of navigation. The Damodar
valley contains the major part of the coal resources of India and is in other ways
particularly suitable for industrial development. The project envisages the
perennial irrigation of 750,000 acres where today 186,000 acres are partly irrigated
{The Times, 30 Aug. 1945).

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

89

alia, general responsibility for initiating, co-ordinating and pressing
forward schemes for the control, regulation and utilisation of water
and waterways in consultation with the provincial and State
Governments concerned.
FOOD POLICY

The Nutritional Advisory Committee has prepared a report on
individual nutritional needs in India and on nutritional education
for consideration by the Health Survey and Development Committee. The responsibilities of this Advisory Committee included
the assessment, province by province, of the standard to be adopted
for the various important foods in common use. On the basis of
these estimates the provincial and national food requirements will
be calculated and the policies for securing the necessary supplies
will be determined. A good deal of educational propaganda will,
however, be necessary before the population can be induced to
improve the diet in accordance with scientific requirements. Such
instruction can be imparted through schools, maternity and child
welfare centres and industrial canteens.
An important aspect of food policy will be the effective
prevention of food adulteration. The question has been considered
by the Central Advisory Board of Health, which has published two
reports on food standards and the legislative and administrative
control necessary to maintain them. The testing of food products
and the assurance of sanitary conditions in food shops and markets
will also receive attention.
The dietary requirements in India have been estimated at
2\ lbs. a day for each adult, including 1 lb. of cereals. But the
poverty of the great majority of the population is such as to prevent
them from acquiring the necessary quantity of protective foods,
with the result that provision has to be made, for the present at
any rate, for a larger ration than that of 1 lb. of cereals a day for
each adult.
The national target for food production on the basis of the
existing population has been estimated to be an increase of 10 per
cent, in cereals, 20 per cent, in pulses, 50 per cent, in fruits, 100 per
cent, in vegetables, 250 per cent, in fats and oil, 300 per cent, in
milk and 300 per cent, in fish and eggs. In addition, the production
of fodder will have to be increased in order to improve the quality
of the livestock. The food situation is so grave that it is not only
necessary to increase the production of foodstuffs on this scale but
also to augment the total volume so as to overtake the increase in
population. For this purpose, adequate statistics of acreage, yields

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RECONSTRUCTION PLANNING IN INDIA

and stocks will be needed, and some such means as the readjustment of land revenue to prices, or the reversion to the payment of
land revenue in kind, subject to an option to pay in cash at prices
notified from time to time, or the establishment of co-operative
or collective systems of farming, will have to be adopted. Attention
will also be given to the production of processed foodstuffs, the
establishment of storage facilities and the determination of a sound
price policy.
AGRICULTURE, FORESTS AND FISHERIES

Agriculture
A master plan proposing definite targets for the increase of
agricultural production is embodied in a memorandum on the
development of agriculture and animal husbandry in India prepared
by a committee of the Imperial Council of Agricultural Research.
The plan provides for an increase in production by 50 per cent.
in ten years and by about 100 per cent, in fifteen years. The capital
expenditure envisaged is 10,000 million rupees over the whole
period of fifteen years, and the recurring annual expenditure is 250
million rupees.
The plan aims at the production of an adequate quantity of
foods of all kinds for a balanced diet for the growing population
and of raw materials for local industries and for export. It is
proposed that agrarian reform for the purpose of bringing about
the increase in production should include the stabilisation of the
price of agricultural commodities at a level calculated to provide
the necessary incentive for bringing additional land into cultivation
and for the general grading up of the means and technique of
production ; crop planning on a national basis, reform of land tenure
in so far as the existing system has proved to have a hampering
effect on agricultural production, and measures to deal with the
problem of absentee landlordism; the organisation of rural finance;
and the establishment of a Central authority for anti-erosion
measures and measures to control plant and animal diseases, as
well as land reclamation, afforestation, or research projects of
national importance. The importance of measures for the employment of improved varieties of seeds, the regulation of grazing, the
prevention of erosion and conservation of land resources, the
improvement of livestock, the consolidation of holdings and prevention of further fragmentation and the organisation of marketing
is emphasised and it is suggested, moreover, that where policies
acceptable to the great majority are obstructed by small groups,

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

91

compulsion will have to be used. x Admittedly, as a consequence
of agricultural reconstruction planning, the Central Government
will have increased responsibilities in respect of the provision of
expert advice, equipment and financial assistance to the provinces.
An organisation with provincial branches, a centre for the purpose
of co-ordination, and a very large trained staff will be necessary.
It is recommended that in respect of the fifteen-year plan
mentioned above, the priority to be accorded to the tasks involved
should be in the following order: (1) the construction of ponds,
wells and canals for irrigation; (2) the provision of fertilisers;
(3) land improvement (embankment, afforestation and drainage);
(4) the provision of quality seed, including the establishment of
seed farms and stores; (5) the establishment of experimental farms;
and (6) the improvement of livestock and establishment of cattle
and sheep farms. The plan has been approved by the Advisory
Board of the Imperial Council of Agricultural Research and
communicated to the provincial Governments for consideration.
Forests
The importance of a well-considered forest policy for agricultural
development is fully appreciated, and the Government's policy
aims at the rehabilitation of Government-managed forests to compensate for advance fellings during the war, the enforcement of
measures to prevent erosion, and the extension of afforestation.
It is suggested that in order to secure these ends the provinces and
States should take action to increase the area under forest (preferably under Government forest) up to the minimum requirements
of the country, to obtain a sustained and equal annual yield from
forests; to place under forest management land subject to, or
necessary for the control of, floods, erosion, or desiccation, for the
purpose of preserving the general climatic and physical conditions;
and to bring about the distribution of forest land in such a manner
as to.provide agriculturists with sufficient supplies of timber and fuel
at a convenient distance from their homes. This last is an important
consideration, for in the absence of other sources of fuel the agriculturists are apt to continue burning valuable cattle manure.
The development of forest research, the training of rangers and
other forest officers and the reorganisation of the Forest Research
Institute are also recommended.
1
For an interesting discussion of agricultural development in India on novel
lines, see Tarlok SINGH: Poverty and Social Change. A Study in the Economic
Reorganisation of Indian Rural Society (London, Bombay, Calcutta, Madras.
New York and Toronto, Longmans Green & Co., Ltd., 1945). The author, who
is an official of the Government of India, undertook this study in his spare time
and discussed his proposals with agriculturists in areas in which he was stationed.

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RECONSTRUCTION PLANNING IN INDIA

Fisheries
The development of fisheries, including the establishment of a
central institute for research work on inland and marine fisheries
and training of personnel, and the promotion of facilities for conservation, storage and transport are recommended.
Organisation of Co-operation
It is proposed that the organisation of co-operative societies
should be extended to enable them to deal not only with rural
finance but also agricultural production, including dairying, and
urban handicrafts and small-scale industries, the grading and
marketing of goods of different kinds, the distributive trades and
the organisation of settlements in newly irrigated areas. The
establishment of a central advisory board, consisting of representatives of the Central, provincial and State Governments, for the
organisation of educational propaganda for the extension of the
co-operative movement is also recommended.
Rural Development
The need for undertaking an educational campaign with the
aid of broadcasting, films, gramophone records, exhibitions and
social recreational activities for the purpose of inculcating a^ sense
of social, national and international solidarity among the rural
communities and of bringing about a change in their general
outlook is particularly emphasised.
EDUCATION

A scheme for a national system of education has been prepared
by the Educational Adviser to the Central Government. The
scheme, which is proposed to be worked out over a period of thirty
to forty years, provides for universal compulsory basic education
for boys and girls between the ages of six and fourteen years and
for higher general and technical education, and also for a twentyyear campaign for the abolition of adult illiteracy which would be
conducted by the State and aided by voluntary organisations and
would be preceded by five years of preparation. When completed
the scheme is expected to cost (exclusive of Indian States) 3,130
million rupees annually (the total expenditure on education in
British India in 1940-41 was about 300 million rupees).
The scheme envisages a system of universal, compulsory basic
education free of cost, and it is suggested that while the majority

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

93

of pupils should go through the complete course, children of ability
and promise (estimated at one child in every five) should be enabled
at the end of the junior or basic primary stage to enter institutions
for higher education.
Higher (or secondary) schools would be of two types—general
and technical—and both would aim at giving a good general
education and preparing pupils in their later stages for their future
careers. The raising of the standard of requirements for admission
to the universities by the reorganisation of the secondary school
system 1 , the introduction of a three-year degree course and the
extension of the tutorial system in the universities are proposed.
Having regard to the importance of technical education in the
probable post-war conditions, the regulation of technical (including
agricultural and commercial) education in its higher stages by the
Central Government and the establishment of a national council
for the purpose are proposed. Technical instruction would be
designed for five classes of industrial workers—managerial class,
research workers, supervisory class, skilled artisans, and semiskilled and unskilled workers.
The total number of basic (primary and middle) school pupils

for whom provision would need to be made is estimated at 52 million,
while the number of non-gradua te and graduate teachers that would be
required for all types of schools (basic and high schools) would be 2
million and 180,000 respectively. The facilities for training teachers
would have to be extended accordingly, and particular attention
given to the provision of refresher courses for teachers for rural areas.
The implementation of the proposals for the provision of school
medical services and physical education which have been made
by a joint committee, appointed in 1941, of the Central Board of
Health and of Education is recommended. It is estimated that
7,500 school medical officers and 15,000 nurses would be needed.
The establishment in the provinces of specialised employment
bureaux under the control of the educational authorities, for the
placing of pupils leaving school, and of university employment
bureaux is also recommended.
The Central Advisory Board of Education has considered the
above scheme, and on the basis of it drawn up a comprehensive
plan for educational development.
PUBLIC HEALTH AND MEDICAL SERVICES

The annual average mortality and morbidity figures for India
include the following: a death rate of 23.9 per thousand; an infant
1

This reorganisation is at present under consideration.

94

RECONSTRUCTION PLANNING IN INDIA

mortality rate of 169.3 per thousand live births; 459,931 deaths
from cholera; 52,335 deaths from smallpox; 13,578 deaths from
plague; 295,953 deaths from dysentery and diarrhoea; 500,000
from tuberculosis, and 4,138,751 deaths from "fevers". Notwithstanding all that has been done in the past decades, the problem
of raising the general standard of health is still largely unsolved
and the existing health services are far below the minimum standard
required. The Government appointed a Health Survey and Development Committee in 1943 to conduct a comprehensive survey of
the existing position and make recommendations for future development. The Committee had the assistance of several experts from
abroad and appointed advisory committees to deal with public
health, medical relief, medical education, industrial health and
medical research.
The Committee has provided in its report 1 not only the most
comprehensive survey of its kind of the existing situation, but has
also drawn up a long-term programme which, if implemented on
the lines suggested, should bring about the establishment of a
reasonably well-developed health service by successive stages of
intensive effort over a period of forty years. The programme aims
at making available the services of 1 doctor to 2,000 persons, 1
nurse to 300 persons, 1 health visitor to 5,000 persons, 1 midwife
for 100 births, 1 pharmacist to 3 doctors, and 1 qualified dentist to
4,000 persons, in 1971 in the Indian provinces with an estimated
population of 370 million. These proposals involve, during the first
ten years of their execution, an anticipated expenditure of 1.875
rupees per head of the population, or nearly twice as much as the
current figure for the province with the highest expenditure of all on
health service.
Particular attention is called by the Committee to the growth
of the urban population in recent years, and the importance of
town planning is emphasised. It is recommended that experts
should be appointed at the provincial headquarters, charged with the
duty of advising municipalities or other local government bodies
on town planning and of drawing up standard development plans.
SCIENTIFIC AND INDUSTRIAL RESEARCH

In 1940 the Council of Scientific and Industrial Research was
set up. It rendered valuable assistance in the war effort, and it is
proposed to set up national physical, chemical and metallurgical
laboratories and fuel and glass research stations under its auspices,
1
Repori of the Health Survey and Development Committee, Vols. I-IV (New
Delhi, Government of India Press. 1946).

SUMMARY OF CENTRAL GOVERNMENT'S PLANS

95

with the co-operation of the Government as well as of industry.
It is also proposed to strengthen the staffs of the existing research
institutions, including the provincial, State Governments' and
university organisations, and the organisations under the various
departments of the Government of India, such as the Imperial
Council of Agricultural Research, the Forest Research Institute,
the Indian Research Fund Association, the Nutrition Research
Laboratories and the Botanical, Zoological and Geological Surveys
of India. Steps will be taken to co-ordinate the work of these
various bodies and to set up five development boards to deal
respectively with medicine and public health; agriculture, animal
husbandry and forestry; industry; defence services' requirements;
and surveys of national resources.
The Industrial Research Planning Committee recommended
in August 1945 that a National Research Council, consisting of
representatives of research institutions, the provincial and Central
Governments, industry and labour, should be set up as soon as
possible to undertake a five-year programme of research, involving
a total expenditure of over 55 million rupees. l

I

1

Christian Science Monitor, 22 Aug. 1945.

XI
Provincial Governments' Plans
As has been previously indicated, the plans of the Central
Government are designed to co-ordinate and supplement the projects
of the provincial and State Governments. Several provinces have
published their own reconstruction projects, which as a rule provide
for a five-year plan of development concerning agriculture, public
works, animal husbandry, fisheries, co-operation, forestry, public
health, industries, education and public administration. Priority
is accorded to plans for the training of the personnel necessary for
the administration of the development projects. In some cases,
as, for instance, the United Provinces, remunerative projects are
given precedence over those which are not expected to produce
quick returns. The first five-year post-war reconstruction plans
of the provinces are, moreover, intended to pave the way to a
succession of similar plans. An interesting experiment proposed
by the Bombay Government is the adoption of four different types
of projects: special priority projects (plans for the training of
personnel for the administration of development projects); allprovince projects (projects extending to all the districts and designed
to prepare the way to more intensive development subsequently) ;
particular area projects (projects such as irrigation or anti-malaria
projects suitable only for certain areas) ; and concentrated area
projects (projects for a concerted drive for an all-round development of selected areas in various parts of the province). The
objective of the last-named proposal is to achieve visible and
measurable results, which may prove to be a stimulus for future
development. The approximate total expenditure proposed on
development for the first five years after the war in the various
provinces is as follows: Assam, 840 million rupees; Bengal, 1,684
million rupees; Bihar, 1,200 million rupees; Bombay, 500 million
rupees (training of craftsmen and technicians and development
of fisheries) ; the Central Provinces and Berar, 306 million rupees ;
Madras, 1,365 million rupees; Orissa, 300 million rupees; the
Punjab, 1,163 million rupees; Sind, 455 million rupees; and the
United Provinces, 1,200 million rupees. It should be added that in
many cases these are probably first estimates.
At the time that these plans were drawn up it was, however,
the general expectation that the war in the Far East would not come
to an end until 1946. Accordingly, the first effective post-war
quinquennium was expected to begin only with the financial year

PROVINCIAL GOVERNMENTS* PLANS

97

1947-48. With the sudden end of the war in the Far East in August
1945, and the consequent contraction of military expenditure,
steps had to be taken to advance the whole programme by one year.
It was not possible within the space of a few months to make a
full examination of all the provincial plans and to approve them in
their entirety. It was decided, therefore, to ask the provincial
Governments to select projects which could be undertaken forthwith and which were best calculated to counteract any unemployment and deflation that might follow the cessation of wartime
expenditure. In making their selection, provincial Governments
were instructed to give preference to: (1) productive and other
projects of economic importance which would increase the real
national income; (2) projects which would provide a high proportion
of employment relatively to cost; and (3) projects which would
provide employment for former service personnel.
With the exception of the North-West Frontier Province, all
the provincial Governments have selected projects and submitted
them to the Central Government for approval. Most of these
projects had been included in the original five-year plans, but new

ones were added by some provinces, notably Madras.
The Central Government had already decided to give the
provinces financial assistance for certain special classes of projects,
e.g., in connection with the Grow More Food Campaign, the
resettlement of former servicemen on the land, the technical training
of students abroad, and the establishment of employment offices.
It has further offered financial assistance in the form of: (1) loans
to the extent necessary for projects for which the provincial Governments might decide to debit the loan money; (2) advances equal
to the total expenditure actually incurred during the years 1945-46
and 1946-47 on projects selected and approved. These advances
will not be recoverable from the provincial Governments but will
be debitable to the grants which the Central Government proposed
to make to provincial Governments for development during the
first post-war quinquennium.
The total estimated cost of the projects selected by the provincial
Governments is 863.9 million rupees. 1 Of this total, it is proposed
provisionally to provide 108.4 million rupees by loans from the
Central Government, to take from it advances amounting to 360
million rupees and to meet the balance from provincial resources.
The great majority of the projects have already been examined
and approved by the Central Government.
These projects include a large number for the expansion of
staff and for increasing the supply of trained personnel. Such
1

See p. 99, table communicated by the I.L.O. Branch Office, New Delhi.

98

RECONSTRUCTION PLANNING IN INDIA

projects do not in themselves provide much employment; they
are not immediately productive, and they can only absorb an
insignificant number of former servicemen. They have, however,
been given high priority in order that development may go
forward rapidly in the next few years. Excluding special training
projects for demobilised personnel, the total cost of projects of this
character included in the plan amounts to nearly 55 million rupees
(staff expansion, 30 million rupees; training, 25 million rupees).
In all provinces, most emphasis is laid on the increase of the
staffs of the agriculture and veterinary departments. Several
provinces have projects for increasing the forest staffs and most
have provided for the expansion of their co-operative departments,
for more industrial training and for training more teachers, doctors
and public health officers. The remaining projects of considerable
economic importance may be said to fall under the following main
heads: (a) hydro-electric and other electricity projects, 113.1
million rupees; (b) irrigation projects, 80.9 million rupees; (c)
afforestation and soil conservation, 19.6 million rupees; (d) agriculture and fisheries, 22.9 million rupees.
Most provinces propose to embark on electricity projects.
Irrigation projects will be undertaken by all the provinces except
Assam. Though these schemes are undoubtedly productive and
will provide employment, most of them will yield no tangible
returns until a lapse of at least four or five years. The tube-well
project is the only important single project which will yield quick
results. Other large-scale projects which are under consideration
or in progress are, for example, the Darnodar and the Sone River
projects, but as they involve more than one provincial administration, they are not included in the provincial plans.
It is proposed to spend a sum of nearly 3.3 million rupees on
afforestation. Nearly all provinces have included such projects
in their plans. The Punjab, for example, expects to employ 10,000
workers on the planting of trees along roads and canal banks.
Bombay and the United Provinces propose to spend considerable
sums on soil conservation and land improvement projects designed
to check erosion, conserve rainfall and make better use of the land.
All the provinces have adopted projects for the improvement
of agriculture and livestock, but the expenditure on directly productive projects falling under this head is relatively small (about
22.9 million rupees). The expansion of cinchona cultivation is
provided for by Bengal and Assam, and the development of fisheries
by Madras, the Central Provnces and Orissa. Bengal has also
provided for seed multiplication farms, and the Central Provinces
will subsidise the distribution of improved seeds and fertilisers.

PROPOSED EXPENDITURE BY PROVINCIAL GOVERNMENTS ON DEVELOPMENT PLANS
FINANCIAL YEARS 1 9 4 5 - 4 6 AND 1 9 4 6 - 4 7 )
{thousand rupees)

Province

Assam
Bengal
Bihar
Bombay
Central Provinces
and Berar
Madras
Orissa
The Punjab *
Sind 1
United Provinces
Total

1

Irrigation

Afforestation
and soil
conservation

1,000
1,030

Agriculture
and
fisheries

Electricity

Roads and
buildings

Miscellaneous

Total

2,290

520
6,830

17,050
68,750

70

1,100

48,910

30,800
140,600
30,300
100,800

260
12,810
2,500
1,100

60
6,330
510
4,030

44,500

21,550
56,000
8,920
23,350
29,290
63,210

3,950

320

5,670
24,930
20,320
50,190
4,710
34,760

54,400
165,900
34,100
91,400
34,000
181,600

113,120

309,370

22,980

19,700

275,290

863,900

250
3,770

8,700
2,820
8,800

15,180

2,500
17,660
260
8,400

60
870
30
300

9,600
7,260
60
30

14,700
40,040
1,500
4,000

31,800

1,160

1,900

80,940

19,630

22,870

1,980
6,400

11,980
49,230
25,500
20,340

Resettlement Industrial
of former
servicemen development

Figures not complete.
O
O

100

RECONSTRUCTION PLANNING IN INDIA

The total estimated expenditure by the provinces on roads,
buildings and other construction projects is 310 million rupees.
The United Provinces, Madras and the Punjab propose the largest
expenditure on roads, but every province will be spending something
on them. Every province has likewise adopted projects which
involve a good deal of expenditure on building hospitals, schools,
colleges, storehouses and office and other buildings of all kinds.
In most provinces, hospital buildings claim the largest share of the
expenditure. Drainage and water supply projects for both towns
and villages account for the larger part of the expenditure under
the heading "other construction".
All the classes of projects mentioned above provide for the
absorption of former service personnel ; and in the case of some of
the projects for staff expansion and training, many provinces intend
to reserve for such personnel a definite proportion of the vacancies.
In addition, however, to the opportunities afforded to them by
these general projects, all the provinces have included in their
plans other projects for their exclusive benefit, designed to promote
the provision of training and resettlement facilities.
No provision is made in the provincial plans for large-scale
industrial expansion, because the development of major industries
is intimately bound up with the general fiscal and economic policy
of the Central Government and the matter has therefore been
taken up by it. The main responsibility of provincial Governments
is for the development of small-scale and cottage industries and
for industrial training. With few exceptions, all the provinces
have made provision in their plans for the improvement or expansion
of such industries, either directly or by increasing the facilities for
industrial training. Many provinces have provided for the expansion
of engineering colleges and of industrial schools.
Of the total estimated expenditure on development plans by
the provincial Governments for the two years 1945-1947, amounting
to 863.9 million rupees, training projects and expansion of staff
(55 million rupees), projects of economic importance (236.5 million
rupees), roads, buildings, and other construction, mainly drainage
and water supply works (369.3 million rupees), special projects for
former servicemen (20.5 million rupees) and industries, excluding
industrial training, (nearly 10 million rupees), account for 630.8
million rupees. The balance is made up of expenditure on projects
falling under the heads: education; medical and public health, and
co-operation; and expenditure on miscellaneous agricultural and
veterinary schemes.

XII
Indian State Governments' Plans
Several of the Indian States, more particularly the larger ones,
have constituted special bodies, or appointed special officers, to
draw up plans for reconstruction. As in the case of the Government
of India and of the provincial Governments, they have created
special funds for the purpose out of wartime surpluses, and the
plans aim at the general improvement of the social and economic
condition of the people. Detailed plans have been drawn up,
among others, by the Governments of Baroda, Hyderabad, Jaipur,
Jodhpur, Mysore, Travancore and Udaipur States. A considerable
extension of the public health, public instruction and rural development services, as well as the construction of public works is envisaged
in these States. In Mysore State the declared aim is a 100 per cent.
increase in the per capita income in the first five-year period of postwar reconstruction. The total expenditure involved during this
period is estimated at 400 million rupees in the case of Mysore and
100 million rupees each in those of Baroda and Travancore. 1
It may be added that the extent of the land to be brought under
cultivation by irrigation, under the plans so far published, is
3 million acres in Hyderabad, 162,250 acres in Jaipur and 1,205,600
acres in Bikaner. The estimated cost of the proposed irrigation
projects in Bikaner, Hyderabad, Jaipur, Junagadh and Mysore
States is 80 million, 650 million, 12,600,000, 1,750,000, and 20
million rupees, respectively. 2
The Godavari River Development project, which is estimated to cost approximately 400 million
rupees and to take seven years to complete, is also being executed
by Hyderabad State. As a result of this project nearly two million
additional acres of land will be brought under cultivation and new
electric, steel, textile, coal carbonisation, engineering, cement and
other industries will be set up. 3

1
2
3

Communication from the I.L.O. Branch Office, New Delhi.
New York Times. 6 Sept. 1945.
The Gazette (Montreal), 15 July 1946.

XIII
Industrialists' Plan
T H E "BOMBAY P L A N "

A scheme—generally known as the "Bombay Plan" 1—for
a rapid planned economic development of the country has been
put forward by a number of prominent Indian industrialists. T h e
authors explain that their object is merely to present in as concrete
a form as possible, as a basis of discussion, a statement of the
objectives to be kept in mind in economic planning in India, the
general lines on which development should proceed and the demands
which such planning is likely to make on the country's resources.
It is further explained that the assumption underlying the
proposed scheme is that on the termination of the war or shortly
thereafter, a national Central Government, vested with full freedom in economic matters, will come into existence. I t is also
assumed that the future Government of India will be constituted
on a federal basis and that the jurisdiction of the Central Government in economic matters will extend over the whole country.
The possibility of a regional grouping of provinces and States as
an intermediate link in a federal organisation is not, however,
precluded.
The plan aims a t doubling the per capita income within a period
of fifteen years. It is estimated that with an increase of population
at the rate of five million per annum, as shown by the last census,
such a doubling of the per capita income would necessitate the
trebling of the present national income. T o bring about this
increase, it is proposed that the net output of agriculture should
be raised to a little over twice the present figure and that of industry,
including small-scale industries, to approximately five times the
present production.
The authors of the plan appreciate the difficulties in the way
of the attainment of the proposed goal. Their approach to the
problem, it is stated, has been characterised by the dictum t h a t
"money or finance is not the master of a country's economy b u t
its servant or instrument". The conviction is expressed that the
capital expenditure proposed is well within the limits of the country's
1

A Brief Memorandum

outlining a Plan of Economic Development for

b y Sir Purshotamdas THAKURDAS, J. R. D . T A T A , G. B. B I R L A ,

Sir

DALAL, Sir Shri R A M . Kasturbhai LALBHAI, A. D. SHROFF and J o h n

India,

Ardeshir

MATTHAI

(Bombay, 1944; the memorandum has since been published in London and
New York by Penguin Books, Ltd.).

THE BOMBAY PLAN

103

resources and that, from a business point of view, such expenditure
will constitute a sound and profitable investment for the country.
The estimates of the costs mentioned in the memorandum are,
it should be added, based approximately on the average price level
during the period 1931-1939, and the calculation of the expenditure
involved in the attainment of the minimum standard of living set
out below is with reference to the total population as in 1941.
On the basis of conclusions reached by nutrition experts it is
considered that, in India, the daily diet of an adult should be
2,600 calories in value, and consist of cereals (16 oz.), pulses (3 oz.),
sugar (2 oz.), vegetables (6 oz.), fruit (2 oz.), fats and oils (1.5 oz.),
and whole milk (8 oz.) or meat, fish and eggs (2.3 oz.).
The per capita consumption of cotton cloth in India in 1929 was
16.1 yards, or much less than the corresponding figure for a number
of European or Asiatic countries. The standard aimed at in the
plan is 30 yards.
Housing presents a more complicated question, to be dealt
with in accordance with local conditions in different parts of the
country, but the urgent need for improvement is acknowledged.
The existing conditions of public health are admittedly
deplorable. Preventive measures, dealing with sanitation, water
supply, anti-epidemic precautions, maternity and child welfare
and curative measures, in the form of the provision of adequate
medical facilities, are alike considered indispensable.
Finally, as regards education, the plan provides for compulsory
primary education and a considerable extension of secondary,
university and vocational education and scientific research.
According to the latest available estimate, in 1931-32 the total
national income of British India was 17,660 million rupees and the
per capita income under 65 rupees a year. Since then prices
have risen and the population has grown, but there has been no
significant increase in the national dividend. The attainment of
the minimum standards specified, together with a small margin
for recreational and cultural activities, would, it is estimated,
necessitate the enhancement of the national dividend (for the whole
country, including the Indian States) to 66,000 million rupees and
of the per capita income to 135 rupees in the fifteen years ending
1960. Under the proposed plan, the contributions of industry,
agriculture and services to the national income would be changed
from 17, 53 and 22 per cent, respectively (in 1931-32 in the Indian
provinces) to 35, 40 and 20 per cent, respectively (for the whole of
India including the Indian States). The goal, it is observed, is a

104

RECONSTRUCTION PLANNING IN INDIA

modest one in comparison with the results of planned economy in
the U.S.S.R., where the national income is reported to have increased
fivefold in twelve years.
It is urged that the basic or heavy industries should be accorded
priority over consumers' goods industries in the early stages of the
enforcement of the proposed plan. It is noted that the development of electricity is indispensable for industrial expansion and
agricultural reorganisation; the potential reserves of hydro-electric
energy in the country have been estimated at 27 million kilowatts,
and only half a million kilowatts have so far been developed. The
plan also emphasises the desirability, in the peculiar conditions
of the country, of the development of small-scale industries at the
same time as that of large-scale industries, because of the need
to provide employment and reduce the amount of capital required
for industrial expansion.
The plan envisages an increase of 130 per cent, in agricultural
production. The need to grow more food is particularly emphasised,
and it is pointed out that the cultivation of cash crops such as jute,
tea, cotton, and oil seeds would have to be adjusted to the requirements of post-war international trade. The organisation of cooperative farming, even if some form of compulsion has to be
resorted to, is recommended for the consolidation of holdings
without depriving the cultivators of their right to the ownership
of the land. Co-operative methods, together with conciliation
procedure, are likewise recommended for the reduction of
agricultural indebtedness. The total amount of this debt, which
before the war was estimated at 12,000 million rupees, has, it is
believed, probably been reduced considerably as a result of the
rise in agricultural prices in the previous two years. Attention is
drawn to the urgent need for measures to check soil erosion. The
extension of irrigation facilities and the institution of model farms
are advocated.
Having regard to thé importance of sufficiently extensive
communications and transport facilities for development, an increase of over 50 per cent, in the existing railway mileage and of
100 per cent, in the road mileage in British India, the metalling
of existing roads, the use of pneumatic tires for bullock carts and
the improvement of harbour facilities in the several ports are
proposed.
The total expenditure for carrying out the various proposals
contained in the plan would be 100,000 million rupees. It is
proposed to meet that expenditure by funds derived in the following
manner: 3,000 million rupees by the mobilisation of wealth privately
held in the country; 10,000 million rupees from sterling securities

105

THE BOMBAY PLAN

accumulated during the war; 6,000 million rupees from favourable
trade returns; 7,000 million rupees from external loans; 40,000
million rupees from savings; and 34,000 million rupees by "created
money" or the issue of currency. Ways of raising the capital
(taxation, Government borrowing, voluntary private investment)
can, it is stated, be indicated more clearly only when the plan is
ready for execution, in the light of the conditions a t the time.
The enforcement of the plan, it is urged, should be gradual,
in three five-year periods of increasing intensity, and should take
into account the possibilities of mobilising national resources, labour,
capital goods and managerial ability. I t should also give priority
to certain types of development and avoid undue strain on the
national economy in the early stages.
Measures for bringing about a more equitable distribution of
the national income and the problem of State ownership, control
and supervision are dealt with in a subsequent publication. 1
An orderly change from the existing economic organisation to
a system which would ensure both sufficient scope for productive
enterprise and equitable distribution is urged by the authors, and
it is pointed out that the plan has the twofold objective of securing
to every person a minimum income essential for a reasonable
standard of living and of preventing gross inequalities in the incomes of different classes and individuals. To secure a minimum
standard of living, it is proposed, on the one hand, to increase the
general level of income through full employment, more efficient
methods of production, improvements in rural and urban wages,
stability of agricultural prices, development of multi-purpose
co-operative societies and reform of the land system (replacement
of the landlord by peasant proprietors), and, on the other, to reduce
the cost of living through the provision of social services, such as
primary and middle school education, adult education, and medical
treatment free of charge, and of essential utility services, such as
electricity and transport a t low cost.
Gross inequalities of income are to be eradicated partly by
such measures as a steeply graduated income tax, death duties
and control of interest rates, prices and profits, and partly by
decentralising the ownership of the means of production through
the encouragement of small-scale and cottage industries, the
widespread distribution of shares in joint-stock companies, the
regional distribution of industries and the development of cooperative enterprise.
1

A Plan of Economic Development for India:

t h e S t a t e ) , b y Sir Purshotamdas THAKURDAS, J .

Part II (Distribution-Role of
R. D . T A T A , G. D .

BIRLA.

Sir Shri RAM, Kasturbhai LALBHAI, A. D. SHROFF and John MATTHAI (Bombay.
The New Book Co., 1944).

106

RECONSTRUCTION PLANNING IN INDIA

The authors of the plan consider that, although the State
should play a positive role in the direction of economic policy and
the development of natural resources, there should be, on the one
hand, sufficient scope for individual initiative and enterprise, and
that, on the other, the interests of the community should be effectively safeguarded against the abuse of individual freedom. Of the
three methods of State intervention, namely, ownership, control
and management of economic enterprise, control is considered
to be the most effective. State ownership is advocated in all Statefinanced enterprises or where it is a necessary means of enforcing
State control. The State-owned enterprises, however, may be
managed by private concerns or by ad hoc public corporations.
Enterprises owned wholly or partially by the State, public utilities,
basic industries dependent on scarce natural resources and those
subsidised by the State should normally be subject to State control,
which may be exercised through the control of prices and profits,
the determination of conditions of work and wages, Government
representation on the board of management, etc. During the
planning period, however, the State will have to adopt a number
of controls of a temporary character in the spheres of production,
distribution, consumption, investment, foreign trade and exchange,
and wages and working conditions.
The authors consider that the wide powers of direction and
control invested in the State for the successful execution of the
plan proposed by them should be exercised through a national
Government responsible to the people.

XIV
T r a d e Union Proposals
RECOMMENDATIONS OF THE ALL-INDIA TRADE UNION CONGRESS

The All-India Trade Union Congress adopted a comprehensive
resolution on social economic planning at its twenty-first session,
held in Madras in January 1945. The resolution welcomed the
growing public interest in such planning, and while declaring that
complete planning of social and economic life could only be achieved
under socialism, laid down the objectives to be pursued during
the transitional stage. Included in these objectives are the establishment of heavy industry, the modernisation of agriculture, the
a d o p t i o n of m i n i m u m wage and social security legislation, t h e

reduction of hours of work and the provision of housing and other
social services. The resolution stated that, in the view of the
Congress, public enterprise and public control would need to play
a large part even during the transitional stage to full-fledged socialism if the standard of living of the people was to be raised.
It therefore recommended the nationalisation of key industries,
mines and quarries and the land as well as transport and communications, banking, finance and insurance, and the establishment
of a system of profit control in respect of both commerce and
industry, designed to safeguard the fundamental economic rights
of the people. 1
T H E "PEOPLE'S PLAN"

The "People's Plan" 2 was prepared by the Post-War Reconstruction Committee of the Indian Federation of Labour. The
fundamental notion underlying this plan is the démocratisation
of the political and economic structure of the country as speedily
as possible. It is observed that the raising of the general standard
of living is not an invariable concomitant of a planned economy,
for "it is possible to imagine a manifold increase in the national
income with a considerable deterioration in the living conditions
of the people". The duration of the plan is ten years. It is confined
to the Indian provinces, but the desirability of bringing the Indian
1
All-India
Trade Union Congress Report. . .Twenty-first Session,
Madras,
1945 (Bombay, 1945).
2
People's Plan for Economic Development of India, being the Report of the
Post-war Reconstruction Committee of the Indian Federation of Labour (Delhi,
1944).

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RECONSTRUCTION PLANNING IN INDIA

States within its scope is emphasised. The purpose of the plan is to
provide for expanding social standards and its immediate objective
is to increase the agricultural output fourfold and industrial production sixfold. The price level on the basis of which the estimates
mentioned in the plan have been prepared is the quinquennial
average for the period 1934-1939.
At the outset, the importance of concentration, in the initial
stages of enforcement of the plan at least, on agriculture, which
provides employment for the large majority of the people, and of
the extension of the internal market is emphasised. It is observed
that to be effective, planning, instead of being governed by the
profit motive, should aim at the advancement of the welfare of
the people. The control of production by the State and the démocratisation of the State are considered to be indispensable for
such a reorientation of policy. A number of general principles are
enunciated as the indispensable basis of the proposed plan. These
include, in particular, the liquidation of the rural debt, the establishment of State control of foreign trade, banking and financial transactions with foreign countries, the systematic reinvestment in
the national economy by the State of the surplus wealth produced
so as to quicken the pace of economic development, and the limitation of the revenue payable for the use of private capital to
3 per cent., the Government guaranteeing the payment and
including it in the national budget.
The proposals for agrarian reform include the following: the
application to the whole country of the recommendation made by
the Bengal Land Revenue Commission, which reported in 1938,
to the effect that the State should acquire the rights of private
interests in agricultural land by compensating the present owners;
the similar acquisition of the private interest in underground
wealth and in fisheries; the compulsory scaling down of rural debts
and their assumption by the State ; the extension of the area under
cultivation and the adoption of intensive methods of cultivation
(extension of irrigation, land reclamation, mechanisation, adoption
of improved methods of animal husbandry, establishment of collective farms, soil conservation, development of food industries,
provision of adequate manuring and of improved seed).
The reform and reorganisation of agriculture will, it is believed,
lead to a wide distribution of the increased income and an expansion
of the internal market. The development of consumers' goods
industries must, it is urged, be the immediate objective of the plan,
for it is observed that "it is indeed a little pathetic, and may even
prove to be considerably harmful, to start, with half-filled bellies
and half-clad bodies, thinking in terms of automobiles and aero-

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planes". Some expansion of the basic or heavy industries is, however, considered indispensable for the development of the consumers' goods industries.
In order to place the manufactured products within the reach
of the consumer, it is thought essential that the State should fix
prices and control new industries. Any considerable use of cottage
industries cannot, it is stated, be reconciled with the purpose of
the plan, which is to open up the prospect of a continual improvement in living standards by increasing productivity. It is realised
that the rationalising of agriculture would release a large volume
of labour, all of which it may not be possible to absorb in the
increased activities resulting from the enforcement of the plan.
Private enterprise may, it is suggested, be left free to operate in
respect of such surplus labour, provided that the over-all control
of the State in matters of policy is maintained.
A 70 per cent, increase in the existing railway mileage and 160
per cent, increase in the route mileage, the development of ports
and inland navigation and an increase in shipping tonnage are
proposed.
The extension of public health measures (provision of additional
rural and urban dispensaries and hospitals, maternity and child
welfare centres, specialised hospitals, and rural and urban water
supply and sanitation facilities), public instruction (provision of
a system of rural and urban primary, middle and secondary schools,
university and technical educational centres and rural and urban
cultural centres) and rural and urban housing is proposed. It is
emphasised that, under the plan, all the social services in respect
of health, education and housing are to be provided to the people
free of cost.
The minimum social standards aimed at are, in respect of food,
an average diet of 2,600 calories per day per adult; in respect of
clothing, 50 yards of cloth per person; in respect of housing, 100
square feet of built area per head ; in respect of medical assistance,
a dispensary for every 1,000 to 1,200 of the population in rural
areas and a hospital for every 10,000 persons in urban areas; and in
respect of education, a primary school for every 1,000 of the
population, with an approximately proportionate number of other
educational institutions.
The plan calls for a capital expenditure of 150,000 million
rupees. It is proposed that the necessary funds should be drawn
from the following sources: sterling balances, 4,500 million rupees;
taxes—estate duty, inheritance tax, death duty—8,100 million
rupees; income from nationalised land preparatory to the enforcement of the plan, 900 million rupees; income from agriculture for

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reinvestment during the period of enforcement of the plan, 108,160
million rupees; and income from industries for reinvestment during
the same period, 28,340 million rupees.
As has been stated above, the plan is based on the principle
that, during the period of enforcement, the surplus in the national
economy should be reinvested in it by the planning authority, and,
accordingly, there is a cumulative increase in the expenditure
from 3,000 million rupees in the first year to 23,570 million rupees
in the tenth year. The initial finance needed for the plan for the
first three years of its operation is estimated at 16,000 million
rupees.
Finally, certain important considerations are emphasised.
Attention is drawn to the need for the organisation of consumers'
and producers' co-operatives for distribution, instead of leaving
the circulation of commodities to the normal trade channels, the
working of which is governed by the profit motive. The effect on
social standards of the increase of population at the rate of five
million a year is recognised. It is observed, however, that nothing
important in this respect can be done during the period of the
plan, but that it is hoped that the secular outlook on life
accompanying the improvement in living standards will operate
ultimately as an effective check on the growth of population. It
is also recognised that India will not be able to plan its life in economic isolation and that the plan will have to be such as to fit into
the post-war world context. The belief is expressed that a plan
leading to improvements in the standard of living of one fifth of the
human race will be one of the greatest stabilising factors in the world
economy of the post-war period.

Planning is perforce provisional in character as it is rooted in
certain assumptions or anticipations, which in the final outcome
seldom correspond to the initial formulation. Such assumptions
are at best a working hypothesis based on current trends, the course
of which, however, is being continually altered by new factors or
factors only dimly perceived in the first instance. As will have
been seen in the preceding pages, the plans drawn up by workers'
and employers' representatives presuppose that it will be possible
to bring into existence a central authority to proceed with the
planning. A similar assumption underlies the Central Government's plan, although the precise character of this authority is
left to be determined in the light of future political developments.

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111

The somewhat sudden termination of hostilities in the Far East,
the character of the foundations on which the world political
structure will have to be rebuilt, the numerous difficulties to be
overcome in the transition from war to peace, and, not least, the
many political problems which await settlement in the country
itself, are all factors which will have an important bearing on
reconstruction planning in India. These factors will affect the pace
of such planning and determine its character, but they do not in
any way detract from the importance of the emergence of a new
outlook in India, shared by the public authorities and the people
alike, which consists in the desire to take all possible steps to
increase production and improve the general standard of living. No
visitor to India at the present time can fail to be impressed by
this change amidst the social and economic unsettlement brought
about by the war.
While the war served to demonstrate the urgency of the need
for economic and social reconstruction in India, it is evident that
the process of the reorientation of Indian social life had already
begun some twenty years earlier. Although India is reputedly a
land of villages, there has been a marked advancement in urbanisation in the last quarter of a century. In the nineteen twenties
the decennial rate of increase of the urban population in British
India was as high as 20 per cent., as compared with 9 per cent.
in the case of the rural population. The difference was still greater
in the following decade, for which the rates of increase of the
rural and urban population were 13 per cent, and 33 per cent.
respectively. Industrialisation, the attraction of town life for the
middle classes and the availability of better educational facilities
in the towns, among other things, no doubt accounted for the increase. The substitution of electric power for power from coal
may be expected to result in a gradual dispersion of the towns in
the future, but the quest for civic improvement is likely to remain
a permanent characteristic of former towndwellers.
The comparatively rapid spread of literacy among the masses
is another feature of the last two decades. In 1921 the total number
of literates in British India was less than 15 million and the proportion of literates to the total population was 6 per cent., while
in 1941 the literates numbered 37 million and formed 13 per cent.
of the population. The number of children attending primary
schools increased from 6 million in 1920-21 to 12 million in 1940-41
and that of secondary school pupils from about 1 million to 3
million during the same period. Technical and industrial schools
increased their strength fourfold—from 10,000 to over 39,000—
during the two decades 1920-21 to 1940-41. The annual expenditure

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on recognised educational institutions (half of which was met from
Government funds), which was less than 160 million rupees in
1920-21, was over 300 million in 1940-41.
As to the extension of industrialisation, during the period 193233 to 1940-41, the steel ingot production increased from less than
600,000 tons to 1.3 million tons a year. During the same period
the annual output of finished steel rose from 359,000 tons to 925,000
tons. During the interval between the two wars, in the cotton
textile industry the number of spindles increased from 6.2 million
to 8.4 million and the number of looms from 109,000 to 168,000;
the output of yarn more than doubled in weight and that of piece
goods nearly trebled in length. The output of sugar, which was
only about 300,000 tons in 1932-33, has a t the present time risen
to over 1 million tons. In the last twenty years, the steel, sugar,
paper, cement, soap, matches and chemical industries have been
firmly established, and the progress of industrialisation has been
sufficiently marked to make it necessary for the country to import
a supply of raw materials for its own needs without impairing the
extent of its export of such materials. Agricultural research and
marketing, co-operation, irrigation, banking, postal savings,
insurance, communications, electrical power production and various
other branches of social and economic activity also showed encouraging signs of development, although in the vital matter of
food production for the increasing population no such progress was
noticeable. 1
Notwithstanding these favourable trends, it would be a mistake
to underestimate the difficulties to be surmounted in order to
bring the standards of life and work in India into conformity with
those which prevail in certain other countries. The extent of the
gap to be covered will be apparent from a calculation made by Mr.
Colin Clark, who, taking an international unit to mean the amount of
goods and services which could be purchased for one dollar in
the United States over the decade 1925-1934 (average), estimated
the annual average per capita income in that country a t 1,300-1,400
international units, as compared with less than 200 such units in
British India, the Netherlands Indies and the rest of Asia. 2 The
gap is being widened, moreover, by the increasingly heavy pressure
of population on the resources of these countries. The net addition
to the population in India in the two decades 1920-1940 was
80 million, and the high rate of natural increase has been sustained
1

Cf. OFFICE OF THE ECONOMIC ADVISER. GOVERNMENT OF INDIA: Statistical

Summary of the Social and Economic Trends in India (in the Inter-War Period),
op. cit.
2
Cf. Colin CLARK: The Conditions of Economic Progress (London, MacMillan
and Co., Ltd.. 1940).

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by a fall in the infant as well as general mortality rates. As a result
of the gap, the more superficial differences between the east and
the west are intensified and the cleavage between the two tends to
be deepened in a world in which unity has become an urgent
necessity. The reduction in the gap in living standards between the
North American continent and the rest of the world will present
many complicated problems, and it cannot be accomplished by the
mere discussion of generalities or enunciation of universal principles.
Still less can it be expected to result from an attitude of natural or
studied reluctance to tackle the task or of leaving well alone and
letting time take its toll. It is a very considerable undertaking,
which calls for determined national action for the increase of
production and efficiency and co-ordinated international organisation designed to facilitate such expansion. Not until the gap is
reduced will it be possible either to find the expansive markets
indispensable for the products of the present-day industrial civilisation or to ensure that close association of the peoples of the world
which alone provides, in the last analysis, an adequate safeguard for
the maintenance of peace.