This is addressed in some of the comments above. Haryana’s growth is not just about Delhi, also Gurgaon has the headquarters of many companies, doesnt make sense to call it a suburb.

Regarding size, the data doesnt indicate that size has a big effect on prosperity.

The bottom level assemblers indeed have repetitive work and are not the main value adders.

I think it is this abundance of factory level technicians that India would have lacked due to its low literacy. I think this is an area which China maintains an edge over India right now.

I agree that certain groups took the entrepreneurial lead, the Parsi dominated Mumbai is a major example of that. Even in Calcutta most factory workers were not Bengali and management was British or Marwari.

I would not say that literacy was important at the time for most industrial jobs, much of which consisted of manual and repetitive labour. Burma had high literacy and schooling rates for the time period yet most factory work there was done by Indians. How much do most people remember and use from school aside from reading and writing?

Around half of Indian billionaires are Gujarati, an ethnic group that makes up 4% of India’s population. There is definitely a sociological and historical angle to who chose entrepreneurship in India, aside from any market conditions.

Think of the sheer number of cantonment towns in the Gangetic plains versus Gujarat. The entry into these cantonments as workers (and later as residents) meant an entry into the modern world for the local elite, which would compensate for the exclusion from the highest levels. It is a bit like H1B Indians from today who choose relatively low level positions at companies in America, even though they could have had businesses to run in India.

India’s literacy rate was around 12% in 1947, Japan’s was 40% when the Tokugawa shogunate collapsed (1868). The Tokugawa shogunate made major investments in literacy which probably led to the higher productivity levels you are mentioning.

Wouldn’t exclusion from most of the high positions in empire tend to push Indian elites towards business and entrepreneurship? The population share of people employed by the Raj was small anyway.

That the Indian elite didn’t bother to become entrepreneurs could be that there were few profitable opportunities and therefore they focused on obtaining cozy government jobs.

In addition, there are studies showing that Japanese labour productivity grew much faster than Indian in 1900s cotton textile mills despite both using the same technology. Inefficient labour rather than inefficient entrepreneurs was the major source of divergence. A Japanese firm even attempted to run a mill in Bombay but couldn’t reach Japanese productivity levels.

Prats, the most important things are networks and the presence of an entrepreneurial elite. It is a strong economy that builds state capacity rather than the other way around.

Comparing Chandigarh and Islamabad is attractive, but they differ in many important ways.

Islamabad is the national capital of Pakistan, so has a direct line of tax revenue. Chandigarh is a state capital, so its tax revenue stream is far more limited.

Its airport had 5 million passengers last year, compared to Chandigarh’s 2 million. Islamabad’s population seems to be more internationally connected, especially to UAE. There were 4 direct flights to Dubai from Islamabad compared to 1 from Chandigarh.

Ugra, before Japan had the Meiji restoration, it had the Rengaku.
https://en.wikipedia.org/wiki/Rangaku

Incipient curiosity about Western knowledge in Japan seems to have roots in the interest of the Japanese elite in Dutch medical expertise.
https://en.wikipedia.org/wiki/Caspar_Schamberger

This combined with the fact that the Japanese elite, like the American remained non-colonized, and sought wealth via entrepreneurship rather than administrative positions in an empire played a major role in the divergence of the Indian and Japanese/American economies.

Ali, Pratap Bhanu Mehta is perhaps India’s finest public intellectual, and he recently summarized research into India’s labour laws,
“It is a myth that India’s labour laws increased Indian labour’s bargaining power. As brilliant papers by Aditya Bhattacharjea of Delhi School of Economics showed, Indian labour’s wages stagnated, since the 1980s there was a massive decrease in strikes and lockouts, factories with hundred or more workers experienced more variability in employment than smaller firms. So the idea that Indian labour’s bargaining power was an obstacle to India’s industrialisation is errant nonsense.”

Therefore, I am an unconvinced by these labor law type lamentations. I have read the Industrial Disputes Act, my family members have factories in India, from personal experience it isnt the problem these non-scholars make it out to be.

Also, how would you then explain the success of coastal states and Haryana ?