Chapter 3 – Governance of Rural Area

Chapter 3 – Governance of Rural Area

 

1. The Company Becomes the Diwan

• On 12 August 1765, the Mughal Emperor appointed the East India Company as the Diwan of Bengal.
• As Diwan,  the Company now became the Chief Financial Administrator of the province of Bengal.
• Objectives of the Company:
  • Collecting more revenue to meet the expenses of his growing army and trade.
  • Buying goods in India and exporting them to England.

 

2. Struggle for Revenue

• The company tried to establish a regular system for collecting revenue.
• The problem: The company wanted to buy good and affordable cotton and silk in India, but they didn’t want to pay directly from the revenue. They wanted the money to come from India for the goods exported from India.
•  Famine in Bengal (1770):
  • Bengal’s economy was in deep crisis.
  • The famine of 1770  killed one-third of the population of Bengal, which further reduced production and revenue.
  • This famine made the British authorities realise that there was a need for investment in agriculture and improvement in the revenue system.

 

3. Need to Improve Agriculture

• The company realized that if they did not improve agriculture, revenue earnings would decline.
•  Permanent Settlement (1793):
  • Introduced by Lord Cornwallis.
  • Objective: To fix a fixed amount of revenue and encourage landlords to invest in land.
  • Rules:
    • Rajas and taluqdars  were recognised as zamindars.
    • They were given the right to collect rent from the peasants and to pay revenue to the Company.
    • The amount of revenue  was fixed permanently.
  • Problems with Permanent Settlement:
    • For Zamindars: The revenue was fixed very high, so many zamindars failed to pay and their zamindari was taken away.
    • For the peasants: The landlords oppressed the peasants and took away their land. The farmers became indebted.

 

4. A New System: The Mahalwari Settlement

• In the early 19th  century, the company needed more money.
• Introduced by Holt Mackenzie  in  1822.
• Region: North-Western Provinces (part of Northern India).
• Rules:
  • The revenue was not to be collected from individual peasants, but  from the village (palace).
  • The estimated revenue of each village or palace was extracted and each palace was considered to be a group of one or more villages.
  • The revenue could be revised from time to time, it was not permanent.
  • The village headman was tasked with collecting revenue and making payments to the company.

 

5. The Munro System or Ryotwari

• In South India, the British authorities felt that there were no traditional zamindars there.
• Captain Alexander Reid experimented with it in some areas acquired by the company after the war with Tipu Sultan.
• Thomas Munro developed it extensively.
• Region: South India.
• Rules:
  • The revenue  was collected directly from the  ryots, i.e., the peasants.
  • Their lands were surveyed and revenues were fixed directly with them.
  • Munro believed that the British should act like patriarchal fathers and protect the peasants.
• Problems:
  • The rate of revenue was very high.
  • The farmers started fleeing their land, leaving the villages deserted.

 

6. Crops for Europe

• By the end of the 18th  century, the Company realized that the Indian rural sector could not only provide revenue but also produce the crops needed for Europe.
• The company forced farmers  to grow crops like  opium and indigo.
•  Indigo Cultivation:
  • Demand for indigo in Europe: Indigo was used to dye clothes.  Till  the 18th century, Indian indigo was in great demand in the international market.
  • Types of Two Main Systems of Indigo Cultivation:
    •  Nij Cultivation:  The planters cultivated their land directly (either by employing labourers or by taking land on rent). This was a big problem because it required a lot of labour and plough-oxen.
    •   Ryoti Farming: The plantation owners used to sign a contract with the ryots (farmers).
      • The ryots used to get loans at low interest.
      • The ryots used to grow indigo on at least  25% of their land.
      • After the harvest, the planters used to buy them at a lower price.
      • Problems: Nile was grown on good fertile land, where farmers wanted to grow rice. The roots of indigo tired the soil, making rice cultivation difficult. The prices were very low.
•  Blue Rebellion – March 1859:
  • Thousands of ryots in Bengal refused to grow indigo.
  • They resisted the plantation owners, attacked with sticks and swords.
  • They also announced that they would not take loans from plantation owners and would not cultivate indigo.
  • The British government set up the  Indigo Commission which blamed the planters and allowed the ryots not to cultivate indigo.
  • Subsequently, the production of indigo shifted from Bengal to Bihar.