The Origins (of Bombay's Economic Development) in 'Economic Development, Cities and Planning: The Case of Bombay'
Nigel Hariss


The original site of Bombay initially had only one advantage—the ease of its defence from the land. Its deep-water harbour was useful but probably not vital until the draft of ships far surpassed that of the seventeenth century. For the traders of the East India Company, the seven small islands, which the British Crown acquired in the 1661 Marriage Settlement between Charles II and the Portuguese king, had —in comparison to the. Riches of Calcutta, and Madras—little or no economic hinterland. The area had no major rivers and thus no means of water transport by which to penetrate inland. The Konkan coastal strip adjacent to the fort was relatively infertile, and beyond it the Western Chats protected the Deccan plateau from easy commercial access. To the north, communications were poor and often insecure.There were no mineral resources available and no local crafts suchasGujaratpossessed(although much earlier, important ports—by the standards of the time – existed close to what became Bombay – at Thane, Chaul, Broach and elsewhere.) Even as a fortress, the islands were unimpressive.The tidal marshes that separatedthe islands generated disease, and this—no doubt exacerbated by the low standards of hygiene and diet—waged unremitting war on the early settlers.Perhaps the Dutchmen who built the first settlement on Manhattan island atroughly the same time glimpsed the future of their city; the first English inhabitants of Bombay could hardly have done so. 

Whether or not the Bombay settlement conformed to the Company's, standard—a fortified station ‘yielding a revenue equal to the charges upon it'—it was the only means of preserving a British toehold on the Western coast, and one which offered a limited measure of independence from the powerful territorial princes.In any serious encounter,thefort was useless.The settlersmadenopretence ofbeingaland power, but even their maritime force was weak in comparison to its rivals—the Moghuls, Marathas, Portuguese, Dutch and assorted bands of pirates. The settlement stagnated, and its members declined in number in the first thirty years. What saved Bombay was less the merits and energies of itssettlersthan themovement of external politicalevents,whichgraduallyremoved tie restrictions upon it.The decay of Moghul power and the instability of the princely order to "he north (in Gujarat, Saurashtra and Kutch) drove out of those territories the merchants and craftsmen who had been the basis of earlier prosperity and British trade with Western India. Chronic warfare, the decay of urban markets, insecure roads, the depredations ofrulers,andtheMoghulMaratharivalry

destroyed the. strongholds of Gujarati merchant "ea-pita-i:Some-of-the-powerfulBanias were drawn to the court at Poona, and later, with the destructionof Marathapower,moved onto Bombay.The lesserfolk—Parsicraftsmen brokers,skilledartisansandmerchants—fled directlyto thesanctuaryof Bombay, sped or

their way in the late eighteenth and early nineteenth centuries by recurrent famines in Gujarat (and the great fire at Surat in the 1830s).

To its military-defensive role—a symbolic one at best—-Bombay added that of haven for merchant capital. But this required markets other than that of Bombay itself.The development of external routes—penetrating the hinterland of India and connecting Bombay with foreign markets--now became decisive if the city was to become an economic asset rather than a liabilitytoitsLondonmasters.Successdepended upon a political settlement. 

In1735,the first Parsi Wadia(shipbuilder) was brought to Bombay to begin the task of creating a shipyardanda skilledshipbuilding labourforce.Links withBritain and the Far East allowed Bombay to become the most effective point forthrough seatraffic. An energetic administration slowly improved the fort's defences, until—bythe1760s—thesettlementwas reasonably secure. In the 1770s, the conclusion of the first Maratha War consolidated the controloftheareaimmediatelyaroundBombay harbour,andby1805,thecity's ships had established naval "supremacy along the Western Indian, coast. The last decades of the eighteenth century witnessed the beginning of a regular service to Suez (cutting the journey time to London from 100 to 30 days) and the cotton trade to China.

All this was still fairly modest in comparison with the development of Calcutta and Madras. Bombay's territory (let alone the income of its inhabitants)was very smalland seemed most precarious considering that its neighbours, the Marathas. posed the most serious challenge to Britishpower inIndia.By comparison, Calcutta was already at the heart of a vast British administered province including Bengal, modern Bihar and parts of Uttar Pradesh, covering some of the most fertile land in India. 

The expansion of Bombay demanded the destruction of Maratha power (1819)so that trading links couldpenetrate the Deccan and supportthedevelopmentofcommunications abroad. The Bombay business class continually pressed for extended and improved land transport and regular foreign shipping services.Until the first' was accomplished, Bombay could never rival Calcutta’scontrolof thegreatGanges waterways.Untilthesecondwasdeveloped, Bombay's primary advantage—its proximity to Europe (Bombay was half the distance from Aden to Calcutta)—could never be properly exploited. Alreadyin the1820s, there was pres-;sure for a regular Red Sea steamship service tpEurope.In1830, the first regularroad through the Ghats to the Deccan was opened, and in 1838, a monthly mail carrier service to London (making Bombay Post Office, as was said atthetime, the mostimportant one in India). The political conquest of the Deccan—Kolaba district was appropriated in 1841, Satara in 1848, Kolhapur in 1842—opened up the cotton growing tracts to the export trade.Bombay merchants expanded into cotton with the proceeds from the illegal opium trade with Malwa district in the north. 

The conquest of the cottongrowing arcas, the opening of communications, and the increasing -price of American cotton coincided to the advantage of Bombay's businessmen. In 1853, the first rail link was established—to Thana— and in 1863, the railway was extended through the Bhor Ghats to the Deccan.It was now possible to channel raw cotton from its major growingareas—particularlyNagpur—toforeign markets through Bombay hands.A year later, the old established weaving centre of Gujarat— Ahmedabad—was connected by rail.Hitherto, communications to the north had always been bad, and the sea route was frequently inoperative during the rainy season.Now Bombay had a direct and all-weather connection to the northern trade routes, to the Punjab and the heartlands of India in the Gangetic plain.Calcutta's monopoly was within sight of being broken.

Bombay also struggled with Calcutta to secure the lion's share of external services.Its merchants gambled, or forced the Government to gamble, en the profitability of steamship communication.In 1868, a weekly mail service to Aden prepared the ground for securing the regular service through the Suez Canal(which was opened the following year). Henceforth. Bombay's advantage as the closest port to Europe was secure in terms of man-made communication routes.


Trade was the basis for the growth of Bombay from a small fortified settlement to a city of some significancewithintheBritish Empire. Events abroad thereby determined the stability of the city’s economy.For example, the 1870 Franco-Prussian War is said to have depressed Bombay's cotton exports by some 30 per cent The phases of trade growth—slackening through the nineteenth century—are shown inTable1.1 in terms of half-decade averages of the tonnage of vessels cleared ill Bombay port and the value of total trade. Phases of growth are separatedbythree clear declines—inthe 1860s,the1890sand—mostseverely—inthe 1920s.Thegraphunderstatestherelative decline in the growth of trade, and cannot show the even more severe decline in the proportion of Bombay's gross income generated by trade. Table 1.2 depicts the decline from the first to the second half of the nineteenth century and also the trend for Bombay's transformation from a strongexporting into a primary importing centre (the change illustrates Bombay's decreasing role as a City-State and its increasing integrationintothewiderIndianeconomy).The instabilityofBombay'strade,withitswide implications for the development of the city, is alsoclear.It is however the particularyears chosenwhich suggest thatthe entire loss of export value (proportionately) in the 1920s had alreadybeenexperiencedinthe1890s.Ifinstead we compare the highest and lowest of thepost-World War Iyears in terms of the valueoftotaltrade(1919-20and1932-3 respectively), the full measure of the decline can be seen. Bombay's exports declined in value by 78 per cent during these years.

External-factors -were an--important influence inBombay'seconomy, but notthe sole determinant. The domestic harvest from time to time proved critical in cutting supplies. For example. during the 1899-1900 famine, Bombay's cotton exports were said to have been cut by some 50 per cent, and wheat by some 70 per cent.1

The directionandcompositionoftrade changedthroughoutthenineteenthcentury. sometimes with considerablespeed.Initially, the bulk of trade was with Britain and Europe, and later with China and Japan.China and Japanwere already cuttinginto Indian yarn exportsto theFar Eastby theend ofthe century.Rawcottonandopiumdominated exportsup to the middleof the century; the former remained important, making up nearlyafifthof theexportvalue in1881.Nearly a fifth of British cottonexports went toIndiain the 1850s, and part of this made up something like athird of Bombay's imports.The volume ofimports ofBritish cottonpiece-goods was slowly reduced bythe development of Indian manufacturing. Sugar (nearly 10 per cent of the import value in 1850-55) and silk (9 per cent, 1840-41)werealsoimportant components of imports.Metalsgraduallyexpanded to reach nearly a third of the import value in the 1860s. Bombay's role as primarily an exporter of raw materials changed to that ofanimporter of goods required for the development of the tiny modern economy. 

The heart of Bombay's nineteenth century trade was cotton.The decade of the 1860s was

both the high point of the cotton trade and the beginningof its decline. The American Civil War interrupted exports of raw cotton to Lancashire, and for a short period the inferior cotton output of Western India (Nagpur, Berar, parts of GujaratandsouthMarathwada) receiveda greatboost.Bombay'smerchants, financiersandbrokersserved as intermediaries. Between 1861-2 and1864-5,cottonexports increasedby171 percent inphysical termsand 480 per cent in value. The city became dominated by a share mania that attracted capital funds from the rest of India. The shares of almost all enterprises rose to astonishing heights, and the flotation of new enterprises stimulates the proposal—and to a much lesser degree, the execution—of a very wide range of projects. A grandiose plan to drain a part of Bombay' coastline—the Backbay Reclamation Scheme- became the star attraction. Its shares increaser in price by some 600 per cent (the descendant of this scheme is still a preoccupation of Bombay planners and is discussed in Chapter 4). In the spring of 1865, General Lee surrendered and the price of Indian cotton at Liverpool collapsed. Itwasthelastgreatfluctuationofapurely trading city,leavingbehindnotonlybankruptcies, ruined reputations and unemployment but giving rise to entirely new ambitions. Fortunately for the people of Bombay, the economy was never again quite soexposedtothe accidents of foreign wars. 


Bombay'screation,survivalandgrowth depended at every stage on India's relationship to Britain, of which trade was only one aspect. Even whentrade was the main factor in generating Bombay's income, there were elements of manufacturing in the city. Indeed, the early development of ship repair and building activitieswassufficiently securetomakepossible the transition to modern technology.The first steamship was launched in 1829, and an 80-ton steamer entirely manufactured locally went into operation in 1851. But, given the lack of local iron and coal resources, the industry was unable tosurvivetheenormousexpansioninthe .Britishshippingfleetthatsoonfollowed. Manufacturing proper awaited the development ofrailways,whichinturnwaitedupon the extension of British political power.

However even the railways brought greater benefit to Eastern India than Western. Railways stimulated the demand for power, steel and engineering products—all relatively poor inthe Bombay area. Bombay's coal was drawn from the Eastern coalfields, and freight rates even in the 1920s doubled the pithead price.Without coal of the right quality, the iron that was produced locally (although at some distance from Bombay) could not displace the iron that was imported orbrought fromthe east.The shipbuilding industry and an ordinance factory(employing 1.000 workers in 1823) provided a workforce for the foundries and workshops required for the railways, butthebasicmaterialswerenot available.At least the power bottleneckwas overcome after the turn of the century by the development of hydro-electric power by the Tatas,butthemetalssituationremainsa restriction to this day.

Bombay's industrialization followed an import substitution pattern, still a powerful motive in the city. This was a prime factor in the development of cotton manufacturing. In the 1860s, ten millsemployedsomesix toseventhousand workers. In the 1880s, 30 to 40 mills provided jobs for over 30,000. By the turn of the century, there were 82 mills and nearly 73.000 workers' By the early twenties, some II per cent of the population were saidto beemployed in the cotton industry.India had become one of the world's largest cotton manufacturing countries—in number of spindles, fifth; in the quantity fraw cotton consumed, fourth; in the size of its labour force, third; and in the size of its raw cotton production, second. 

Initially, the replacement of British exports to Indiawas perhapsthe primary motive.But Indian industry went on to win former British marketsabroadandrestrict Britishindustry increasingly to finer quality production.It was a relatively brief boon to Indian industry, which Iwas, soon to be driven out of export markets. Industry locked Bombay much more securely intotheIndianeconomy,andmademore:difficult the city's earlier role as intermediary orbroker betweentheIndianfarmerand the London market.

The growth of cotton manufacturing only made more urgent the demand for better internal communications.By 1871, Bombay was linked by rail to Calcutta and Madras, and by the 1880s tosome12.000miles of rail.Butit wasnot enough merely to have access to the railways. The price of rail transport became a crucial matter, and pressures grew to lower freight rates for the benefit of Bombay's industry.Rivalry overthe Government'sassistancetorailway development continued to evoke Bombay proteststhroughout the later years of the century. Daniel Thorner records that between 1901 and 1904, Bombay businessmen formally complained to the Government on different occasions at the favouritism shown to Calcutta and Karachi in the distribution of railway grants. It was claimed that Bombay, handling 35 per cent of India's trade, received only 11.5 per cent of the grants. 

The declining dependence on trade increasedthe stability of the city's economy, but with too littleindustrialdiversificationforcomfort.The 1931 Census recorded the city’s venerability - an18per centmale and 48 per cent female decline in industrial employment (in comparison with 1921). The figures for employment in the textile industry were, if reliable, less daunting: a decline of 3 per cent male and 47 per cent female employment. Lakdawala cites other sources to givefigures whichshow an overallfall of 25 per cent in employment between 1927 and 1933 (the 1923: 100 index had dropped to 77 by 1933). The author of the Bombay volume of the Census was prompted to the sombre reflection:

'Bombay is far from being a city of the type that London is, with a vast variety of organised industry. It is a city which combiner the textiles specialization of Manchester (without its imposing array of diverse modem industry) withthecommercial and .shippingcharacteristicsofLiverpool.Theprosperityof Bombay therefore rests upon two foundations' (1) the power of its cotton mills to supply the cloth that India wants and to withstand rivals in India and outside it, and (2) the maintenance of the import and export trade. The last ten years have shown that in both respects

Bombay is more than vulnerable.'


There is only fragmentary information available about the people who built and sustained the city in its formative years.Some of the clearly very rough estimates of the number of city inhabitants at different dates are given in Table 1.3. Whatever the correct figures, it is clear thatthe city'sdevelopment hasalways laggedfarbehindthemodestneedsof its 'citizens,althoughthe feelingthat this gapwas intolerable hardly afflicted the middle classes before the twentieth century. Indeed, if the death rate alone is considered, conditions must have improvedmostremarkablyin thelast one hundred years of the city's history. 

The trading city was able to grow with much greater stability than the fluctuations in the value of trade might suggest. It did so probably with proportionately many more modestly prosperouspeoplethanwaspossibleinthe industrialcity.With such prosperity, the sex ratio was perhaps much less unbalanced than in lateryearsandtheties withthe countryside much closer (for urban income made possible thepurchase ormaintenanceof ruralland] Given the peculiar origin of the city and the modestreturnspossibleinitsearlyyearBombay'sbusiness classpartly escapedthe atrophying effects of an overwhelmingly dominantBritishcomponent,alwaysinamore privileged relationship to the Government. There was no native Marathi business class—all were foreigners, whether from Gujarat or Rajasthan, Sind or Saurashtra.The heterogeneity perhaps made for a greater openness, a greater willingness to compete openly as capitalists were supposed todo—or rather,a decreasedopportunity to do otherwise. Victorian Bombay is the nearest equivalent toaEuropeancapitalistcity,to ManchesterorLiverpool,withavigorous indigenous business class that dominated all the main lines of productionand trade (this in contrast to Calcutta).

The statistics describe an industrial city that attracted a massive supply of unskilled labour for itsmills.The very unbalancedsex ratio, particularly in the fertile age groups, andthe high death rate ensured that most of the city's populationgrowthhadto comefromimmigration.Thefasterthepaceofindustrial growth, the more rapidly the native-born share as a proportion of the total popuiation-4n-"the city declined(between 1872 and1931from 31 to 16 per cent). The obverse of this was the increaseintheproportionofearners in the population—from 58 per cent in 1872 to 61 per cent in 1911.Particular rural districts contributed then as now a large part of the migration; the most prominent is Ratnagiri, a poor arid district some 250 miles south of Bombay (which in the 1960s still provided some 45 per cent of Maharashtrian migrants to the city).

The city was prey to catastrophe—whether faminein the countryside, which drove cultivators into the city, or epidemicsin the city itself,which droveoutitsinhabitantstothe rural areas. For example, the droughts of 1802-3 and 1899-1900 prompted major flights from the land tothe city.Of the1877-8famine, the author of the 1881 Census wrote:

'we have no exact record of the actual populationofthatmomentous periodwhen an appalling flood of destitution had swept into the city:for a short period, the approaches to the city were guarded and the wanderers counted: in 11877 from the 15th of August to the 30thSeptember. 36,258 destitute entered the city.' 

The 1897 bubonic plague forced cut. it is said,some 10.000 in the first week, at the peak of the epidemic, over half the inhabitants had fled the city.No sooner wasthe plague curbed than rural famine generated a reverse flow until the epidemic returned in 1900.Economic fluctuations stimulated similar—if less large and panic stricken—reactions.The authors of the1931 Census estimated that, because of the flight from theslumptheirenumerationofthecity's population was possibly 200,000 below what-it might have been. 

The city was always ill prepared either for disaster or even simple growth.Its settlement and extension was haphazard even when, as in 1803, a catastrophe laid waste a major part of theinnercity,makingpossiblesystematic replanning. Once the danger of attack from sea orlanddisappeared,thericherinhabitants moved away from the congested and extremely unhealthyconditionswithinthefortarea—covering part of what istodaythe central business district and southern area of the docks. Continuous effortsthroughoutthe eighteenth century to consolidate the land mass by drainage and to exclude the tide with dykes made more land steadily available. The Sion causeway was completed between 1798 and 1803, and the last gap—to the southern extremity at Colaba—was spanned in 1838. New settlements were created at the beginningof thenineteenthcentury at Dongri Hill and Backbay. In the 1830s, country houseswereestablishedonMalabarHill near the Governor's summer-time residence on Malabar Point (1835). With the slow improvement in transport and the growth of population,the'nativetown'alsomoved outwards fromthe walls—toByculla,Mazagaon and Kamathipura, and then to Dhobi Talao, Girgaum, Chowpatty and Khetwadi. Beyond what was becoming the Island (that is, the consolidated land area of the original seven islands), Salsette peninsula, there were market gardens and the country estates of wealthy Parsis and Britons. 

In the middle of the century, the danger of epidemic and the growing wealth of the city promoted the final destruction of the fortificationsand thefillinginofditches, yet there waslittle sanitationorsafewatersupply.

Improvementsdependeduponatangible danger:otherwise(herestlesspursuitof self-interest that had created the city continued undisturbed.Eventhemonumentalstatus symbols of a rich business class—the town hall, the university, the railway station, the post and telegraph office—waited for their creation upon thegreat prosperityof the1860s.Bombay's pride was in achieving the first elected Municipal Corporation(in1873),India'sfirststock exchange (1875), private telephones (1881) and tramways (1877), rather than in the use of its wealth to improve the welfare of the majority. 

Even without periodic disaster, conditions were appalling, although possibly not worse than those existing in- London or other-major Europeancitiesinthefirsthalfofthe nineteenthcentury.The1814-15Census recorded that "some 27 per cent of the enumeratedpopulationwas'floating',andthat there were some 20,000 'houses' for the rest, or 7.8 persons per house. The rich might flee the inner city, but in their wake came theshanty towns, which soon reached Malabar Hill, Breach Candy andMahalaxmi. stillhigh incomeresidential districts.In most areas, the city was as foul as some medieval slum.'* At the beginning of the twentieth century, crude housing statistics came to be seen as one of the indices of squalor.The 1911 Census recorded that 69 per cent of the population lived in one room dwellings. A 1921-3 survey noted that 97 per cent of working class familieslived insingle rooms,which housed between 2 and 8 families.The1931 Census calculatedthat en average 4.4 people lived in each of the quarter of a million tenements (and over 80 per cent of the tenements consisted of one room).By 1951 the average hadrisen to 6 people per room. 

The information was fragmentary and unsystematic punctuated by reports of horror (like the 1873 Hewlett Health Report) that served to frighten the rich, but prompted them only to very sluggish action other than in direct self-defence. For the well-to-do, every burst of expansion in thecity'seconomyseemedrelentlesslyto threaten every improvement, since the share of the increase in the city's income expended on improvement never expanded proportionately and was always the first item to be cut in the event of difficulties. The images used by the rich, then as now, stressed an 'encroaching tide', images of flood andinundation, a great irrational movement that was beyond control, even though it was precisely the growth of income in the city which promoted its population expansion. Some of the more conservative said that it was better that the city should not prosper than pay such a high cost. Fortunately for Bombay, this argument foundered onthe -self-interestof the majority of businessmen.


1Itwashopedinthe1880sthatIndianwheat exports might rival the American. Some 600,000 tons were exported in 1885.

2Figures(rounded ) from MorrisDavidMorris, The Emergence of an Industrial Labor Force in India:A Studyof theBombayCottonMills. 1854-1947, Berkeley, 1965, Appendix I, pp. 213-14.

3For a general discussion of this topic with particular reference to theearlier detail, see Daniel Thorner's Investment in Empire. British Railway and Steam Shipping Enterprises in India, 1825-49, Philadclphia,1950.

4D. T. Lakdawala et. al., Work, Wage and Well-Beingin anIndian Metropolis,Bombay, 1963, Table Vlll-4, pp. 629-33.

5Censusof India.1931, TheCities of Bombay Presidency. Vol. IX, p. 56.

6The contrast between Bombay and Calcutta is discussed by. Anil Seal in The Emergence of Indian Nationalism, Cambridge, 1968, pp. 80-4.

7J. K. Condon, The Bombay Plague. Bombay.1900, p.130.

8The history of planning and public regulation in Bombay is touched upon in Chapter 4 below. For a more detailed account, see Report on the Development Plan for Greater Bombay. Bombay, 1964. pp. xxiv-xxxi, and Town Planning in Maharashtra, 1914-64.TownPlanningandValuationDept (Golden Jubilee Celebrations), Poona, 1964.

9Edwardesquotesthefollowingaccount from Maclean's Guide to Bombay: 

To ride home to Malabar Hill along the sands of Back Bay was to encounter sights and odours too horrible to describe,to leap four sewers whoso gaping mouths discharged deep black streams across your path, to be impeded as you neared Chaupatti by boats and nets and stacks of firewood, and to be choked by thefumes from the open burning ghat.'

See S. M. Edward's in The Rise of Bombay, A Retrospect, Vol. X of the Census of india Series 1901. Bombay,1902,p.170.

Nigel Harris, The Origins in Economic Development, Cities and Planning: the Case of Bombay, Oxford University Press, New York, 1980. P. 5-12. [B.J06.H1].