It is interesting to speculate on India’s fate if it had not had two centuries of British rule. There are three major alternatives which can seriously be considered. One would have been the maintenance of indigenous rule with a few foreign enclaves, as in China. Given the fissiparous forces in Indian society, it is likely that there would have been major civil wars and the country would have split up. Without direct foreign interference with its educational system, India probably would not have developed a modernizing intelligentsia because Indian society was deeply conservative, and it did not have a homogeneous civilization around which to build its reactive nationalism. If this situation had prevailed, population would have certainty grown less but average standard of living might have possibly have been a little higher because of the bigger upper class, and the smaller drain of resources abroad.
Another alternative to British rule would have been conquest and maintenance of power by another West European country such as France or Holland. This probably would not have produced results very different in economic terms from British rule.
The third hypothesis is perhaps the most intriguing, i.e. conquest by a European power, with earlier accession to independence. If India had self-government fro the 1880s, after a century and quarter of British rule, it is likely that both income and population growth would have been accelerated. There would have been a smaller drain of funds abroad, greater tariff protection, more state enterprise, and favors to local industry, more technical training – the sort of things which happened after 1947. However, India would probably not have fared as well as Meiji Japan, because the fiscal leverage of government would have been smaller, zeal for mass education less, and religious and caste barriers would have remained important constraints on productivity.
– Angus Maddison, The Contours of the World Economy, 1-2030 AD: Essays in Macroeconomic History. (Oxford: Oxford University Press). 2007. p. 130.