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ECONOMIC POLICY OF BRITISH IN INDIA

Main Features of Indian Economy During 18th Century Most of the people worked as cultivators. As many as 90% of the population lived in villages. For this reason one can also regard the Indian economy as a village economy. ii.

pay the revenue demand that was fixed in perpetuity. Demand of state in the nature of Nazrana or other fees were given up. The zamindar was not a landowner in the village, but a revenue Collector of the state.

iii. In Company calculations the villages within one zamindari formed one revenue estate. The Company fixed the total demand over the entire estate whose revenue the zamindar contracted to pay.

iv. The state demand was fixed at 89 per cent of the rental, leaving India had a fairly well-developed system of handicrafts. 11per cent with the zamindars as their share for their trouble and It also had trade relations with the outside world and responsibility. the balance of trade was in its favour. To finance trade, indigenous banking was sufficiently developed. v. So long as the zamindars made the payment to the Government The English East India Company needed more revenue / in time, they were left free in their relation with their tenants. If money to maintain its trade and pay its troops. they did not make the payment to the state in time, their estate It need not be over stressed that the bulk of the revenue in could be auctioned. India came from land and therefore dissolution of the existing land systems and introduction of changes in the land vi. Magisterial powers were taken away from the zamindars. They revenue settlement and administration was an inevitable were left with no police work. result of the foundation of the British administration. 2 Other Important Land revenue settlements- The extension of the COLONIAL EXPLOITATION: FORMS AND ON SEQUENCES British Empire in Deccan and South India necessitated a new type of administrative organisation based on different systems of land After battle of Bauxar and consequent treaties British treated India revenue settlement. Under these circumstances, the advisability of as a colony and it was exploited blatantly in phased manner and settling the lands on the model of Bengal was seriously debated. much of its wealth was drained out from the country. The exploitation by the British can be studied in different phases of their (I) Munro exposed the weaknesses of the Permanent Settlement. rule. The Select Committee appointed to review the affairs of the East India Company, preceding the renewal of Charter of 1813, favoured the introduction of the ryotwari system. The ryotwari system was East India Company; methods of economic exploitation introduced in the territories of Madras, Bombay and Sind. (a) Direct Plunder: In the name of trade the East India Company Important points associated with Ryotwari system indulged in direct plunder. In the beginning when the company started its trade with India, they were given authorisation to export i. Under this system, there was no middle-men like the landlord/ gold and silver bullion and coins of these metals worth 30,000 per Zamindar/ taluqudar who mediated between the ryot or cultivator annum to India. But after the Battle of Plassey, with the capturing of and the Government. It was a direct system. political power, the entire picture changed. The balance of exchange tilted in their favour and they managed to secure maximum goods for ii. It was a periodical settlements(to be revised after every 30 years) minimum payments. Moreover, British officers collected huge and was based on survey amount of wealth from Indian rulers, landlord businessmen and common men for one reason or the other, which they finally sent to iii. A thorough survey of each village was made and a descriptive England. register was prepared with an account of every ryot's holding. (b) Changes in Land Revenue Administration iv. The rights of ownership and occupancy were acknowledged. Ryot had right to transfer his land and the right of inheritance for his progeny were maintained.

1.

Permanent Settlement in Eastern India (Bengal)-

As regards the Land Revenue Administration, the period between v. The lands were classified by the Government according to the 1765-1793 is characterized by many experiments. The Company fertility and nature of the soil and the crops produced. The average adopted the method of trial and error and in this process it production for a number of years formed the basis for the attempted many experiments, most of which proved faulty. It was ascertainment of the grain-value of the land. That, in its turn was left to Cornwallis to evolve a system which had the stamp of converted into money-value. Deducting the average annual permanence. Cornwallis, helped by officials like John Shore and cultivation cost from the said value, a net income from the land was James Grant with their divergent views finally went for land ascertained. Approximately one-half of the said value was fixed as revenue settlement popularly known as Permanent Settlement. the maximum revenue for the land. vi. The ryotwari system established the closest relation between the people and the government, for the system required the realization Permanent Settlement was made with the rajas and taluqdars of of rents by the officials directly from each holding. It was necessary Bengal. They were now classified as zamindars, and they had to that each field should be measured and surveyed and its boundaries determined and boundary marks set up. It involved the Important points associated with Permanent Settlement i.

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preparation of field maps and the taluqa maps and a whole department of the Surveyor-General to carry out these duties. vii. Ryots were apprehensive of higher assessment and distrusted new settlements. viii. The ryot remained the master of his land so long as he paid the revenue. But when he failed to pay, the government could take over his land in its direct possession. ix. The government tax collectors often practised oppression on the individual ryots. Thus, the direct relation between the state and the tiller was not always an unmixed blessing. x. The ryotwari system was supposed to be a close approximation to the old Indian system prevalent in these regions. But actually, it created private property in land, destroyed the unity and cohesion of village life, and exposed the cultivator to the ruthless oppression of the revenue authorities who demanded and enforced payment of the land revenue even in years of drought. collection of the revenues and his own remuneration for the arduous work. Unlike the Bengal Zamindars the Oudh taluqdars had no real rights over the lands under their charge. Moreover, they worked as revenue collectors for the fixed period of the settlement, and not in perpetuity. Industrial Revolution in England and its aftermath: As a result of the Industrial Revolution in England big manufacturing industries were establish, in Britain. These industries needed raw material in large quantity/volume and wanted the colonies to act as the supplier of raw materials. The industries produced goods on a large scale and wanted to expand their market so as to earn profit. The colonies where the Company already enjoyed monopoly over the trade were best suited for both as supplier of raw material and market for finished goods. The industrial revolution brought new kind of colonial exploitation. The partisan implementation of free trade policy served two purposes. On the one hand it restricted the imports of Indian cotton textiles in England and on the other hand the exports of British goods to India increased. The exploitation of India by the British industrial capital in the 19th century brought drastic change in the nature of the Indian economy. The isolation of self-sufficient villages ended and with it the old form of economy disintegrated. In the (i) (ii) The state fixed revenue for a limited period of thirty / twenty years. The settlement was not made with the village (Mahal). The villagers as a whole became responsible for the payment of revenue for the whole village. An arrangement on behalf of the entire village to pay the stipulated amount of revenue was signed by the village headman known as lambardar. The individual villagers contributed according to their respective holdings. Villager was the owner of the land as long as he paid his revenue for the land. urban areas, the process of de-industrialization was more or less complete. The earlier balance which existed between agriculture and industry in this country during the pre-British period was also lost. To protect the industrial interests of Britain, the Government imposed heavy import duty on Indian goods. In 1824, import duty on Indian coarse cotton textile was 18% and on Indian muslin was 37.5%. However, the British exports to India were kept duty tree. This policy of the British government harmed the commercial interests of India.

(II) The Mahalwari System or Village Settlement- The Mahalwari system/ or Village Settlement was introduced in the territories of Punjab, Avadh and Nagpur. It borrowed some features from the Zamindari system of Bengal and some of the ryotwari system of the Deccan but also embodied some original elements of its own. Important points associated with Mahalwari system

(iii) The government settlement officers were made responsible for the assessment of land revenue. They, in consultation with lambardar and the village bodies, fixed the revenue.

In fact the British capitalists were not interested in establishing manufacturing units in India. However, the decision of (iv) While fixing the land revenue, the yielding capacity of the soil, the establishment of jute industries and other plantation crop like tea, nature of the crop it produced and the prices of such crops were coffee and indigo etc. were taken under compulsion and driven by taken into account. The assessment once made was continued the motive to make maximum profit. They were mostly controlled by for the full term of the settlement. the Europeans. The introduction of the Mahalwari system, however, did not disrupt the community's organisation as the settlement was made THE FINANCIAL CAPITAL PHASE: This phase saw the period of with the village and not with the individual. massive investments of the British capital in India. Most of the (III) Taluqdari System capital was plundered from India. It was now being invested in India because the British economy had reached saturation point The Mahalwari system did not cover the whole of the Uttar Pradesh. as far as investment in Britain was concerned. In fact it was In the district of Oudh, there existed another system known as venturing for new destinations and colonies suited them for Taluqdari System. Under it a number of villages were put under the investment since they could dictate terms and conditions. tatuqdari system. The government entered into an agreement with Almost 97% of the capital invested in India in the early years of the taluqdar for a period of 30 years. The taluqdar collected the the twentieth century was devoted to purposes auxiliary to the stipulated revenues from different villages put under his charge and commercial penetration of India and was, in no way connected with deposited them with the government, after deducting the cost of its industrialization.

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Some expenditures, which had little connection with India, was also charged to the Indian Account. These expenditures were treated as loans granted to India. The expenses of wars in China and Abyssinia were all charged to the Indian treasury. For the construction of railways, capital goods were imported from Britain. Under the system the guaranteed rate of interest varied from 4.5 to 5 per cent. In 1882, the new guarantee system had brought down the rate of interest to 3.5 per cent. British private capital was also introduced in tramways, mining, oil, banking and finance, and rubber, match box, paper, engineering and sugar industries. Economic Consequences Exploitation Various dimensions /Forms of Impact of commercialization of agriculture on Indian Economy It is a paradox that the commercialization of agriculture and increase in foreign demand for Indian agricultural produce did not lead to the development of Indian agriculture. It was precisely because of colonialism that the Commercialisation of agriculture emerged as an artificial forced process which could not lead to a genuine growth in agriculture. The impact of the Commercialisation was quite far reaching. It led to a scarcity of food because the increasing demand for cash crops like cotton, jute, indigo and opium etc. was met by substitution of commercial crops for traditional food crops. One major cause of the famine in 1866 in Bengal and Orissa was that the best land was cultivating indigo instead of rice. Yet another impact was a differentiation among the farmers. Although a small section of the farmers, who had the resources, prospered by shifting completing to the cultivation of commercial crops, the poor farmer suffered great losses as he had to now depend on a market for his own food requirements. The farmer came to attach greater importance to market demands and prices than to his own immediate needs. Commercialization of agriculture during colonial period proved to be disadvantageous for the country because it was unplanned and was undertaken to serve the colonial masters. It was for certain ruinous for Indian economy. Famines Understanding them - The agrarian system as evolved by the British had a built-in system of destruction of agriculture. Apart from the traditional reasons of famine like monsoon failure, natural calamities etc. the economic policy of British created a situation that scarcity of food and recurrent famines became very frequency in India The magnitude of famines that visited India during the colonial rule throws sufficient light on the fact that these famines were man made phenomenon. The policy of maximizing land revenue altered the composition of landed society. Many old zamindars could not compete in the race. The peasants were literally robbed by new zamindars. This reckless process, which continued till the permanent settlement, resulted frequently in famines, loss of human life and large areas of land were rendered as waste. From 1765 to 1793 the revenue demand of the company nearly doubled. The agrarian system as evolved by the British had a built-in system of destruction of traditional agriculture. Further introduction of commercial agriculture on large scale had its own consequences .It is evident from the famines of 1870s and late 1890s and epidemics and slow growth of population. In the old order the cultivators produced grains for self consumption. They used to keep sufficient amount of food grains for facing eventualities like famines, droughts etc. However, under the new system the cultivator was required to pay the rent in cash. Therefore, it became obligatory for the cultivator to sell off his produce in the market and did not have any buffer stock. In fact they repurchased food grains for self consumptions. So in case of crop failure the poor cultivator had to suffer untold miseries. Although British invested in the transportation and communication system it developed the network in selected areas that served their interest. Lack of the means of transportation and communication obstructed the free and quick movement of food articles f rom one region to another at the time of famine. Contrary to this the produce from the food gain rich area was collected and exported by British without keeping buffer stocks of food grains for India. Moreover, the food grains were exported even when there was shortage of food in India.

Impact of land revenue systems introduced by British rule in India: The revenue demand being high and harsh led to economic hardship of cultivator and added to the existing poverty i.e. exploitation by the Government 1. The land settlements introduced market economy and did away with customary rights. 2. Cash payment of revenue encouraged money-lending activity. 3. Money lenders were protected by British Rule and the legal system and had support of authorities. They charged exorbitant rate of interest i.e. exploitation by money lenders. 4. It sharpened economic disparity and social differentiation. Rich had access to the courts to defend their property. However, poor hardly had any redressal mechanism. 5. It led to commercialization of agriculture. This was followed by introduction of methods to compel/lure the cultivators to grow commercial crops desired by the rulers. 6. Forcible growing of commercial crops proved hazardous for the peasants because they had to buy food grains at high prices and sell cash crops at low prices. 7. The stability of the Indian Villages was shaken and the entire setup of the rural society began to collapse. Impact of colonial rule on agriculture-. The new agrarian system introduced the British and the policies pursued by them created stagnant agriculture, indebted peasantry, rise in landless labouring class, famines and epidemics. The basic policy of the British was to extract land revenue irrespective of the economic condition and paying capacity of the peasantry. The distress sale of land to pay land revenue was not discouraged as it was a direct consequence of British land revenue policies. Unlike the land revenue during pre-colonial period when demand varied according to the crop cultivated. The land revenue under the British was a true tax on land. Therefore although the revenue collections went up, the prices of food grains declined, the rural indebtedness increased and the rural economy was depressed. Moreover the commercialization of agriculture led to transformation of economy into supplier of raw materials The main commercial products, were jute, sugarcane, tea, indigo, silk, rice etc. The growth of opium and tea was encouraged to meet the British financial interest. The direct appropriation of the agricultural surplus was the sole goal of the British rule. It almost dictated, directed and controlled the agricultural system of India and did not shy away from its maximum possible exploitation. The direct consequences of colonial rule on agriculture led to impoverishment of the peasantry, stagnation of the rural economy, scarcity, famine and epidemic

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The administration also failed to check hoarding done by the business community to earn profit. This further aggravated the famine conditions. Agriculture required investments. Poor peasantry could not do it. Since the government and the landlords showed very little interest in public works, agriculture remained backward in the country. The impoverishment of the peasantry was a glaring fact during the British rule over India. The agrarian policies pursued by the British increased the number of landless labourers, the pressure of population on backward village economy and the profitable plantation economy filled the pockets of the British. The magnitude of rural poverty was graphically described by the saying that the Indian is born in debt, he lives in debt and he dies in debt. Due to recurrent famine and huge loss of life due to hunger the British government came under pressure in England. The devastating effects of 1876-78 famine compelled the British Government to do something substantial to check the recurrence of famines in India. The first Famine Commission was set up in 1878 under the chairmanship of Sir Richard Strachey. The commission recommended State interference in food trade in the event of famine. India witnessed another major famine in 1896-97, therefore, the Second Famine Commission was constituted in 1897 under the chairmanship of Sir James Lyall. This commission recommended the development of irrigation facilities. The Third Famine Commission was set up in 1901. This commission recommended that the official machinery dealing with a famine must work around the year so that the scarcity of food grains could be controlled well in time. Though the three Famine Commissions were constituted but the British Government was never serious in dealing with the welfare plans for the masses. Famines continued to occur and the Famine of Bengal 1943 was the most horrifying. This was the one of the worst gift of the British rule to India. Introduction and expansion of transportation and communication facilities in IndiaBritish control over the large geographical area of Indian subcontinent necessitated broad and swift network of transportation and communication facilities. Therefore viable and economic means of transportation and communication in the form of Railways, telegraph etc. available in the age was introduced in the 1850s by colonial rulers in India. The choice of the region for introduction and expansion of transport and communication networks by British in India speaks about their objective and motives. Western scholars have termed these developments as significant contribution made by British to the economic progress of India. But since all the benefits went to colonial rulers it indicates that they were used as tools of exploration rather than that of economic progress of India. Contrary to the beliefs of Western scholars that the Railways helped in fighting famine and food scarcities, the expanding railway network actually added to such events and led to impoverishment of Indians. Trade and commerce grew with the advent of railway but it benefitted the British rather than the native. Railways were used for movement of resources like raw materials and movement /mobilization of troops. But the railway policy of the Government discriminated against Indian enterprise. Railway freight rates encouraged foreign imports at the cost of trade in domestic products. It was more difficult and costlier to distribute Indian goods than to distribute imported goods. No doubt the use of railways for movement of population, in later period added speed to the mobility of people but welfare or progress of the Indians was not in the agenda of the colonial rulers. The growth of towns, port development etc. owes a lot to the advent of railways. It is an established fact that during the British rule railways did not make much headway towards the economic development of the country. As a matter of fact, the British never wanted railways to act as an agent of economic progress. The motive behind railway construction was never industrial and economic development of the country. The motive was to open up India more completely, so that the far flung areas should be easily accessible, which in turn would make it easy for the British to exploit the resources of the country in a better way for their own interests. Following reasons explain why the' British accepted the scheme of railway construction in India. These throw light on their real motives also. Industrial Revolution in England led to establishment of a number of large industries, especially cotton textiles. The wheels of these industries were fed by the raw materials supplies from English Colonies. India was an important source of supply of raw cotton to the British industries. Cotton was supplied from the remote areas and used to cover long distances by bullock carts and other slow mode of transportation. The movement of cotton in the process led to deterioration of the quality of the cotton that usually caught dirt. Another essential requirement of the Industrial Revolution in England was necessity of large market for its machine manufactured goods. For that it was essential that the country should opened up. Far flung areas should be made accessible by easy and cheap means of transportation. Railway served the purpose. Moreover, it was necessary for the British to connect different corners of the country so as mobilize troops and military stores whenever required. No other means of transportation than the railways could make served their purpose. The capital of the British found new means of investment that assured guaranteed returns. The investment was made to be the prerogative of the British. In short the Britishers had their own selfish interest in introduction and expansion of railways and communication means in India. The military and trade considerations compelled them to do so. They were never interested in industrialization of India. Economic Drain or Theory of Drain of Wealth- The drain theory, as formulated by the nationalists, referred to the process by which, a significant part of India's national wealth, was being exported to England for which India got no economic returns. In other words, India was made to pay an indirect tribute to the English nation. Dadabhai Naoroji in his paper entitled "England's debt to India " was the first nationalist to put forward the Economic Drain theory wherein it was stated that the British were extracting wealth from India as the price of their rule in India. In fact out of the revenues raised in India nearly one fourth went out of the country and added to the resources of England. Consequently India was being continuously bled. This "Economic Drain" was peculiar to British rule. Even the worst of previous Indian governments had spent the revenue they extracted from the people inside the country. Whether they spent it on irrigation canals and trunk roads, or on palaces, temples and mosques, or on wars and conquests, or even on personal luxury, it ultimately encouraged Indian trade and industry or gave employment to Indians. This was so because even foreign conquerors, for example the Mughals, soon settled in India and made it their home. But the British remained perpetual foreigners. The drain was a continuous process that multiplied with the passage of time and manifested in different variety and forms. It

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began with the dual government in Bengal. The East India Company at the time kept aside a portion of the Indian revenue for their commercial investments. The situation got worsened as the British rule progressed in India. The drain of Indian wealth took many forms. The drain took the form of an excess of exports over imports. Another important constituent of the drain was the remittance to England of a part of their salaries, incomes and savings by English, civil military, railway employees lawyers and doctors. It also included the payment of the pensions and furlough allowances to the English officials in England by the Government of India. The western writers have also suggested that the history of India revealed a very low level of agricultural productivity because it was based on a 'non-animal powered agriculture'. According to many western historians, the absence of any worthwhile technology kept a large portion of India 'virgin land as late as 1800'. Tobacco, potato and peanut cultivation was introduced by the British in India. Further according to them, India could not claim any great achievements in manufacturing because it lacked modem technology. Although India had some excellent craftsmen and produced textiles and a few other manufactured goods but they were the result of hard work and not of any developed technology. W.H. Moreland and many other scholars have used the evidence of early European travellers to prove that Apart from this a large volume of the drain from India after 1858 Indian technology was poor. was in the form of the Home Charges of the Government of India. Therefore, Western writers have made two points regarding the The Home Charges referred to the expenditure incurred in impact of British rule over India. First, on the eve of colonial England by the Secretary of State on behalf of the Indian expansion, the British found a highly underdeveloped India with low Government. Another major source of the drain was the profits productivity in agriculture, very low per capita income and absence of of-private foreign capital invested in trade or industry in India. This any developed technology or tools for manufacturing. Second, the especially included the investment in Railways in India. benevolent policies of the British helped in the establishment of political unity, a system of governance and it laid the foundations of Moreover, cost of most of battles fought by the British in India economic development in India. against the Indian rulers was borne by the Indians. Contrary to this, the Indian nationalist scholars put forward a different The drain was evils of all evils. It was impoverishing the viewpoint and hypothesis. Dadabhai Naoroji, Romesh Chandra Dutt in country. Dadabhai Naoroj i declared it as the real, the principal the 19th century and Rajni Palme Dutt in the 20th century represented and even the sole cause of the sufferings and the poverty of the Indian nationalist perspective. The question they raised was: why India. It was estimated that nearly one half of India's net annual did the British East India Company gradually get involved in local wars revenue flowed out of the country. Transfer of national wealth of conquest? Why did the British Queen in 1858 take up the direct abroad had an important impact on the income and employment responsibility of ruling over India till 1947? If the Indian economy was within the country. really stagnant, how did it sustain the East Indian Company and its expenditure? Needless to say, this drain of India's wealth to England, in the form of salaries to British officers posted in India, home-charges and the According to nationalist writers the two worst aspects of British profits made on the British capital invested in India, benefited England colonial rule over India were the 'drain theory' and the theory of 'deand diminished the sources for investment in India. Britain did not any industrialisation'. longer have to send bullion to India to balance the accounts. Instead bullion was now sent out from India either to China or to Britain. The drain theory, referred to the process by which, a significant part External drain, however, was only one element of British exploitation of India's national wealth, was being exported to England for which of India, linked, with other sources of exploitation like heavy taxation India got no economic returns. This drain of India's wealth to England, and an unfavourable trade. in the form of tribute, salaries to British officers posted in India, homecharges and the profits made on the British capital invested in India Contrary to the elementary principle of economic development that etc. benefited England and diminished the sources for investment in the surplus is generated for investment, the British siphoned off or India. drained the surplus and deliberately pushed India on the path of underdevelopment that finally culminated into ruination of the After acquisition of dominion over India, the East India Company economy. The British benefited immensely from the plunder and stopped sending bullions to India to balance their accounts. Instead exploitation of India. Lord Curzon wrote: bullions were sent out from India either to China or to Britain. India is the pivot of our Empire... If the Empire loses any other part of It is estimated that 'external drain' from Bengal constituted about 3 to its Dominion we can survive, but if we lose Indian the sun of our 4 per cent of the gross domestic material product. If expenditure on Empire will have set. wars of the East India Company is added in this period the drain is estimated at 5 to 6 per cent of resources of the India. External drain, Impact of British rule in India however, was only one element of British exploitation of India, linked, There is sharp differences among the Indian nationalists and the with other sources of exploitation like heavy taxation and an Western Scholars vis-a-vis their evaluation of the impact of British unfavourable trade. colonial rule over the economy, society and polity of India. Besides the external drain theory, the nationalists argued that British According to many western writers, the British rule provided political rule led to the deindustrialization of India. India was an exporter of unity and stability of governance to India. It has been maintained by cotton manufacture and this was how the Company started its trade the Western scholars that the British rescued India from chaos and but gradually India became an importer of cotton manufacture and provided political stability. Indian political unity, according to them, thus Indian artisans, craftsmen and important trading centres was a myth, an abstract concept which was concretized into a reality collapsed and whatever manufacturing activity existed was destroyed by the British rulers. In the absence of political unity, the eighteenth under the impact of imports of cotton manufacture almost exclusively century India had very low levels of "commerce and capital from Britain. For more than seventy-five years up to 1913, India accumulation" and its implication was that the British rule in India had remained the major importer of cotton goods from Britain, often taking to deal with very low level of economy. This argument of the western more than forty per cent of the British exports. Thus the writers challenges the nationalist argument that India was industrialization of England was accompanied by the decline and economically very attractive and profitable for the British. destruction of Indian cotton manufacturer. The decay of Dacca,

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Surat, Murshidabad and many other flourishing towns bears testimony Demographic Data: Figures regarding population. to de-industrialization of India. Imperialist Apologists: Scholars with a softer attitude towards Although British rule was accompanied by many changes and imperialism. They under played the exploitative aspect of imperialism introduction on new systems in political and economic field and social and tried to absolve it from any responsibility for the economic legislations, but most of the things were done in order to benefit the degeneration of India. British rule in India and help it consolidate its position. Even western education was introduced in India with the objective of creating a Laissez Faire': Non-interventionism, or a policy of no intervention into group of clerks and subordinate staff who could serve the British the economic process of the country. The phrase plus policemen refer Empire and help them to rule a vast country like India. to the idea. of a state responsible mainly for law and order, and refraining from economic intervention. Net Domestic Product (NDP): Cumulative National Product from industry, agriculture and the service sector. Output: Total volume of production. Patwari: The village accountant. Per Acre Production: Production divided by each acre of land under the plough. TIMELINE Per Capita Income: Net National Income divided by population.

Per Capita Production: The rate of production after being divided by 1765 English East India Company acquires Diwani of Bengal, Bihar total population. and Orissa from Mughal Emperor Shah Alam II, after Treaty of Primary Sector: Agriculture, fishery, animal husbandry and forestAllahabad. Start of Dual system of administration in Bengal. produce. 1773 Regulating Act passed by the British Parliament to regulate the Productivity: Producing capacity. activities of the East India Company: Dual system of administration abolished; Revenue reforms-quinquennial settlement followed by Revenue farmers: Individuals to whom agricultural land allotted by a annual settlement; Start of Judicial reforms ruler in return of a fixed revenue demanded by the state. 1793 Permanent Settlement in Bengal (Ten year Settlement Share croppers: A class of agriculturists who cultivated and introduced in 1790 was made permanent) managed other peoples' land and shared the crop, in return. 1800s Santhals begin to come to the Rajmahal hills and settle there 1818 First revenue settlement in the Bombay Deccan 1820s Agricultural prices begin to fall 1840s-50s A slow process of agrarian expansion in the Bombay Deccan 1855-56 Santhal rebellion 1861 Cotton boom begins 1875 Ryots in Deccan villages rebel Tenants-at-will: The class of old peasant proprietors, now turned into tenants on the land of newly created Zamindars who could now evict the former at their will for failing to pay the rent. Village Bania: Class of rural money lenders who also sometimes acted as intermediaries between the cultivators and the market.

Helpful Information Abwabs: In addition to land revenues the cesses collected from the peasants.. Bullion: I t is gold or silver in the form of' bars which is often turned into coins. De-peasantisation : The process of land holding peasant losing their land and becoming agricultural labourers. Differentiation: Break-up of the peasantry into classes as a result of certain sections prospering at the expense of others within the same class.

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