HIST363: Global Perspectives on Industrialization

The Mughal system of land revenue which Raja Todarmal had devised was scientific and suited for the Indian agricultural system where the owners of land were the peasants and the zamindars had only the right to collect revenues/taxes and pass it onto the central governing authority. After the Battles of Buxar/ Plassey, the British became the rulers of the Bengal Presidency and they continued the Mughal system of tax administration to get a fixed amount of land revenue collected by the Zamindars; however, there were the Jagirdars or feudal landlords who had been allotted jagirs or land titles by the state in lieu of certain obligations (raising of troops etc.).

All this ensured the promotion of a very powerful landlord lobby in the agrarian society. In view of the need to earn revenues and send profits to the East India Company in London, the English policy was to maximise land revenue and all freedom was given to the zamindars to collect rent. The system of collection was crude and oppressive as the Zamindars fixed rents at will and cultivators rarely enjoyed security of tenure. To pay off taxes, farmers often borrowed money from zamindars or money- lenders and were reduced to the status of bonded laborers or slaves as the borrowed amounts could not be repaid due to the high rates of interest levied by the moneylenders.

In 1775, Lord Cornwallis introduced the Rayatwari System with the Permanent Settlement Act wherein individual settlements were made with which each holder of land title (ryot or rayat) by the state with the farmers having the right to sublet, mortgage and transfer land and if the fixed rent was paid, he could not be evicted from the land. In UP/Punjab, another land tenure system – the "Mahalwari" was introduced. The village was the basis of settlement and farmers paid revenue on the basis of their % of land holding as per village records. Villages were the unit of taxation and property ownership was jointly held or singly held by the farmer community. The colonial system of land revenue was as under:

• Zamindari System – 48% land largely in North India with 50% land owned by zamindars.
  
• Rayatwari System – 33% land largely in Central / South India.
  

Thus over 80% of the land was covered by these two systems of land revenue which were feudal in nature. But In the zamindari system, the landowners were vested with resources and had absolute proprietary rights and they had the resources to take over the farmers land; zamindars tried to extract maximum amount of revenue from the farmers and were neither interested in improving the productivity levels of farmers nor in innovations. The Ryotwari system in India was a colonial imposition and surplus agriculture produce was siphoned off to pay off the land revenue, to the detriment of the smallholder farmers.