Here's a blog post summarizing an article that quotes from a book. My question is about the book material. As such, I should probably read the book before I pose my question. But I've got things to do, nephew.
The book, Jon Wilson's India Conquered, finds that "economic growth and institutional dynamism" was strongest in the areas of India that escaped direct British rule. And here's my question: isn't it possible that institutional dynamism was a contributing factor to Britain being unable to directly rule those areas? Two Indian states, one with robust institutions and one without, would have different likelihoods of falling under direct British rule. Post-1946, the cultural traits that were the foundation of the institutions are still in place, and so this is where you see subsequent economic growth. It's not that British rule killed the chance of later economic growth, but British rule flourished in places that had the things that would kill the chance of later economic growth.