According to a recent report, India had been declining in its growth momentum over the past three years and grew barely 3% in the quarter before the pandemic. The report also stated that India’s GDP shrunk by 24% and economists now expect the GDP to shrink by 10% in 2020-21.
At a time like this, it is important to remember that almost 300 years ago, India accounted for more than a 1/4th of the world’s GDP. Although the share began falling after the British took over our country, the emperors during the time managed to keep the country’s revenue intact amidst famine and several other economic crises.
Here are five Indian rulers who took monumental decisions to sustain the economy of our country.
The Cholas, who reigned for close to 430 years (C.E 850 -1280), created economic policies in the 9th Century completely from scratch. Among the first things they did was to survey and grade the land in order to set up a fair taxation system, and they went from there to develop their massive trade routes – which stretched to ancient Rome.
The Chola economy was constructed at different levels, beginning with towns or the ‘nagaram’, which acted as distribution centres for produce and a source for products made by local artisans for international trade. The Chola rulers also actively encouraged the weaving industry and derived revenue from it which were also sold at the ‘nagarams’ to traders.
Indeed, unlike the main agricultural economies of the North at the time, Cholas chose to develop their kingdom through intensive trade and urbanisation. They also had an even distribution between ‘rule from the centre’ and ‘self-governance, in that nagarams and other centres were allowed to reinvest parts of the wealth they earned as they saw fit.
Not that agriculture was ignored. For example, the Chola rulers built stone dams across the Kaveri, of which the 2000-year-old Kallani dam built by King Karikalan is still in use. The dam is said to have irrigated 69,000 acres of land. The Cholas also created channels to distribute water to allow agriculture to flourish.
Lesson: Self-governance at the city or town levels helps accelerate growth
Nawab Asaf-Ud-Daulah, the fourth Nawab of Awadh (present-day Lucknow), assumed the throne in 1775 and brought about significant changes in the economy of his province. Widely known for his efforts for public employment, the nawab started a ‘food for work’ programme during the famine of 1784, which lasted for 11 years.
One of the most iconic structures in Lucknow, the Bara Imambara was built as a result of this programme, employing thousands of citizens. Such government-mandated work gave rise to the saying, “Jisko na de Maula, Usko de Asaf-Ud-Daula”, meaning, those who did not receive from the almighty will receive from Asaf-Ud-Daula. The Nawab is said to have employed more than 20,000 men for the construction of the Bara Imambara which also lasted 11 years.
Today the historic monument left behind by the Nawab is not just an architectural wonder but stands as a testimony for the economic stability he provided his citizens.
Lesson: Governments can stimulate economies through large-scale public works
Sher Shah Suri
After the invasion of the Delhi Sultanate in 1398 by the Turkish conqueror Timur, the sultanate was in ruins, and the citizens had lost everything they had. The economy was especially shattered.
But when Sher Shah Suri came to power, he reestablished the sultanate using policies that considered every stratum of the society, especially the farmers who were not receiving the income they deserved.
Before his rule, land revenue was calculated on the basis of the estimated production of the land. This was an unfair system since the produce varied every year. He had every plot of farmland in his kingdom measured precisely and graded by quality. Each peasant was given a document called a patta that specified the tax due on the specified land so that the revenue collectors could not cheat the farmers. Farmers also had the option of paying land revenue in kind or cash.
He is also widely known for his investments in the infrastructural development of the country.
The construction of the Grand Trunk Road, the standardisation of the rupee as a currency and the development of a large postal system were all his efforts towards a better administrative system which highly improved India’s productivity.
Lesson: Fresh surveys, coupled with infrastructure projects, help shake-off old inefficiencies, and increase tax revenues.
When Chandragupta Maurya came into power in 321 BCE, surviving sources stress how he established a strong economy through infrastructural projects, especially through irrigation.
Evidence was found in the Junagadh rock inscription of Rudradaman in Gujarat, which dates back to 150 CE. The inscription stated that Rudradaman repaired and enlarged the reservoir and irrigation infrastructure built by Chandragupta.
In fact, the great Maurya is said to have built a dam across the river Girnar, creating a large lake which was maintained for almost 800 years after its construction, giving the region some stability in production and the government more control over the economy.
In agriculture, the Muaryans did away with the practice of paying tax to hundreds of lesser lords and centralised it. The king officially owned all land, and farmers paid their produce as tax to central authorities alone.
Besides irrigation, the Maurya also made significant progress in industry and trade. Guilds from the Mauryan empire became free centres of the economy and major contributors in the manufactured goods industry. The empire built large export industries, building ships that traded figs, wine, and silver goods with far off places like Eygpt.
Interestingly, capitalism flourished during the Mauryan era, with many private entities rising to prominence, something that was rare at the time in India.
Lesson: Simplifying tax regimes, while boosting irrigation, stablises the backbone of the economy, allowing other sectors to flourish.
When Akbar came to power in 1556, Delhi and Agra were under threat by Hemu Vikramaditya, Chief Minister of Adil Shah Suri and Punjab was also under dispute by Sikandar Sūr and was on the verge of collapse.
In order to bring stability to the state, he started by abolishing the pilgrim tax from non-Muslims. He also developed the existing revenue system in a way that was convenient to the peasants and profitable to the state.
In 1580 using the previous 10 years’ local revenue statistics, productivity and price fluctuations, he averaged the produce of different crops and their prices. The new system rapidly expanded the economy, and as a result, moneylenders and dealers became active in rural areas. Akbar also secured the support from the dominant rural groups, and his officials dealt with the leaders of the communities.
Lesson: Price control helps better planning, and microfinance gives rural economies an added boost.
When the country’s economy is going through a severe downfall, the lessons on the economy from these emperors are definitely something to go back to.
(Edited by Vinayak Hegde)