I. The Question of Why Indiaâs Muslims Are Poorer than Its Hindus Indiaâs Muslim minorityâas of the early twenty-first century, around 12% of its ethnically and religiously diverse populationâlags behind the countryâs Hindu majority economically. The average household income for Muslims is 76.6%, and per capita income 72.4%, of the corresponding figure for Hindus. In rural areas, the typical Muslim-owned farm is only 41.1% as large as the typical Hindu-owned farm. Muslims have relatively lower labor participation rates and higher unemployment rates in both cities and the countryside ðShariff and Azam 2004, vii; figs. 12, 15, 16, 18; tables 6, 7Ă. The 2011 Forbes list of the 100 richest Indians includes just three Muslims.1 The underperformance of Muslims is particularly striking in the management of its private companies. Shortly after India gained independence from Britain in 1947, only one of Indiaâs 80 largest publicly traded companies had a Muslim at its helm ðGovernment of India 1955Ă. A half century later, in 1997, just one of Indiaâs 50 largest business groups was headed by a Muslim ðTripathi and Mehta 1990, 340â42Ă. 2 In describing the economic performance of Muslims in independent India, Omar Khalidi ð2006, 88Ă infers from such statistics that Muslims âlack the ability to organize and plan enterprises on modern lines.â
My reading of the paper is that Muslim inheritance law (which divides the estates more or less equally) prevented capital accumulation to the same extent as Hindu family law. Essentially the Hindu joint family concept was very similar (structurally) to the joint-stock corporation; allowing mercantile Hindu families (especially in Western India) to rapidly accumulate capital and also move on to professional management sectors (as Sereno mentions in the previous post; privilege encompasses both financial, educational and social capital).
Furthermore Islam’s prohibition on credit made the waqf’s (essentially Islamic family trusts) less liquid and unable to allow Muslim families to fully take advantage of the assets that they controlled.
After the jump I’ve excerpted two paragraphs from the paper that touch on both the above points.
The four non-conforming Muslim castes (Khojas, Memons, Bohras and Ghiarasis – the last I had never heard of) were the only ones who maintained their pre-conversion Hindu family practises (Dina Wadia argued that the Quaid’s family estate should be divided as per Hindu law owing to his Khoja origins).
Continue reading Economic Modernization in Late British India: Hindu-Muslim Differences



