Postal variables as Proxy for Economic Growth in the Colonial Period


The study attempts to add to the basic historical debates regarding economic development during the colonial period. It tries to use a new methodology to understand the level of economic growth between 1854 and 1914 and to draw a co-relation between the growth of postal services, a crucial service, and economic growth.

It can be seen that there was very limited economic development during the colonial period. This holds true even for the period 1854 to 1914. There was growth for a brief period of time subsequently, from 1914 onwards, due to the advent of the First World War. It is however wrong to dismiss the growth in postal network as for purely strategic needs. There are sufficient indications that the postal network grew in response to demand for its services from the service sector in the colonial period.



Literature review

The creation of proxies to measure and study economic outcomes has a long history in Economics. Good (1994) uses a weighted index of several proxies including mailed items per capita, the share of the non-agricultural sectors in the total labour force, and school enrolment ratios to measure the relative economic performance of Central and Eastern European territories in the Hapsburg Empire.

Henderson, Storeygard, and Weil (2012) created a statistical framework that used satellite data on night-lights to arrive at a measure of economic growth to supplement official statistics. The method had the flexibility to be applied to several different jurisdictions as the unit of analysis. The final index created by Henderson et al. was successful in reducing bias and errors in the official statistics. Young (2012) uses microeconomic data from Demographic and Health surveys to create proxies to estimate the growth and level of consumption in Africa.

The studies quoted above concern relatively recent times, for which systematic and standardized data exists ā€“ collected and collated in modern and workable formats. For the purposes of our study, which pertains to the early part of the colonial rule in India, we have to rely on data sets constructed by previous scholars in their study of the period ā€“ since official and/or incontrovertibly trusted data is missing for the said time period. Also, the study we propose to undertake is unprecedented and devoid of any indicative literature from the past, to the best of our knowledge. We therefore proceed to use data pertinent to the period and context, and develop a framework for the intended investigation.


The public post was established on 1st October, 1837, by the East India Company under the first Post Office Act XVII of 1837. The postal system in India came to be developed first under the supervision of Lord Clive in 1766 and later under Lord Warren Hastings when he established the first Imperial Post Office, i.e. the Calcutta G.P.O. under a Postmaster General in the year 1774. This culminated in the formation of the Imperial Post in the Bengal Presidency. In the Madras Presidency and Bombay Presidency, the General Post Offices came into existence in the year 1786 and 1793 respectively. The Presidency Postmasters General maintained the postal system independently in their respective jurisdiction in the initial days of the Indian Post Office; all postal rules and regulations framed and issued by each Postmaster General were inconsistent with each other, as there was no uniform procedure under one central administration in India. The Act XVII of the British Parliament in the year 1837 first regulated the post office on a uniform basis to unite the post office organisation throughout the three Presidencies into one All- India Service. However, the Post Office Act XVII of 1854 reformed the entire fabric of the postal system and the Post Office of India was placed on a common administrative footing on 1st October 1854. It is because of this very reason that in our paper, we have restricted ourselves to commence investigation from the year 1854. We have also not ventured beyond 1914 because of paucity of postal data. The economy of India between 1854 and 1914 is subject to several debates. It is impossible to review all these debates here in this paper; however, we have attempted to recapitulate a brief outline of two of the most important debates: The De- industrialization and The Drain of Wealth.

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