NCERT Class 8 - Our Pasts III • NCERT Class 12 - Themes in Indian History Part III, Chapter 10

Land Revenue Systems and Economy

British revenue policy had one aim - a large, fixed and punctual income. Three systems were used in different regions, and all three raised the demand, made it payable only in cash, and enforced it strictly, which transformed rural society.

The three systems

• Permanent Settlement made the zamindar the owner of the land, with the revenue fixed forever. Fixing it permanently meant the state gained nothing from later increases in production or prices.
• The Sunset Law provided that if the amount was not paid by sunset on the due date, the estate would be auctioned, which transferred many old zamindaris to city merchants and moneylenders.
• Ryotwari dealt directly with the cultivator and removed the intermediary, but the assessment was high and revised periodically, leaving the ryot exposed to bad harvests.
• Mahalwari assessed the village jointly, with the headmen responsible for collection; the settlement was revised every twenty to thirty years.
• In all three the demand had to be paid in cash on a fixed date, regardless of harvest, which drove peasants to moneylenders.

Commercial crops and rural distress

• Peasants were pushed towards crops the market wanted - indigo, cotton, opium, jute, tea and sugarcane - rather than food grains.
• The indigo system in Bengal forced cultivators to plant indigo on their best land at a fixed low price; the Indigo Revolt of 1859-60 followed, and a commission ended the worst abuses.
• Debt to the moneylender became structural, and land began passing from cultivators to non-cultivating creditors.
• Famines became frequent and severe in the later nineteenth century, with heavy mortality, even as grain continued to be exported.

Deindustrialisation and the drain

• Indian handloom textiles lost both their export market and their home market as machine-made British cloth entered duty-free while Indian cloth faced heavy duties in Britain.
• Weavers, spinners and other artisans returned to the land, so the share of population dependent on agriculture rose - the reverse of what happened in industrialising countries.
• Dadabhai Naoroji set out the drain of wealth theory in *Poverty and Un-British Rule in India*, arguing that a large part of India's wealth left the country every year with no equivalent return.
• The drain took the form of home charges, salaries and pensions of British officials, interest on debt raised in Britain, and profits of British firms.
• Railways, begun with the Bombay to Thane line in 1853 under Dalhousie, carried raw material out and manufactures in; they helped integrate the market, but the capital came on a guaranteed return paid from Indian revenues.