Ruling the Countryside

• Company Becomes the Diwan

  • Appointment
    • Mughal emperor appointed East India Company as Diwan of Bengal (August 12, 1765).
  • Responsibilities
    • Administering land and organizing revenue resources.
  • Economic Impact
    • Shift from a trading company to a territorial power.
    • Draining wealth from India to buy cotton and silk.
    • Severe economic crisis in Bengal; artisans deserting, agriculture collapsing.

• Need to Improve Agriculture

  • Financial Crisis
    • Company needed regular revenue to fund wars and administration.
  • Permanent Settlement (1793)
    • Introduced by Lord Cornwallis.
    • Zamindars recognized as landlords to collect rent.
    • Fixed revenue demand (Raj).
    • Problems
      • Zamindars failed to pay; auctioned estates.
      • Agricultural investment neglected by landlords.
      • High revenue demand crushed peasants (ryots).

• A New System is Devised

  • Flaws of Permanent Settlement
    • Fixed revenue did not benefit the Company when prices rose.
  • Mahalwari System (North-Western Provinces)
    • Devised by Holt Mackenzie (1822).
    • Revenue assessed on a mahal (village/estate).
    • Village headmen collected and paid revenue.
  • Ryotwari System (Munro System)
    • Developed by Thomas Munro in south India.
    • Direct settlement with the cultivators (ryots).
    • Land carefully surveyed before assessment.

• Crop for Europe (Commercialization)

  • Diversification of Crops
    • British forced peasants to grow cash crops: opium, wheat, sugarcane, cotton, indigo, and tea.
  • The Indigo Phenomenon
    • High global demand for blue dye from indigofera plants.
    • British planters rushed to India.

• Problems with Indigo Cultivation

  • Two Main Systems
    • nij cultivation: Planters directly controlled land; required vast labor, ploughs, and bullocks; hard to expand.
    • ryoti cultivation: Ryots forced to sign contracts (satta) at low interest; trapped in perpetual debt.
  • The Blue Rebellion (1859)
    • Bengal indigo peasants refused to grow indigo.
    • Attacked gawials (agents of planters) and social boycott of indigo factories.
    • Government set up the Indigo Commission; led to the decline of indigo in Bengal.