Colonial Impact on the Economy of Eastern India(1757-1787)

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  • Topic: Bihar, Patna, Bengal
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  • Published : January 26, 2013
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Colonial impact on the economy of Eastern India(1757-1857)

Anuradha Jaiswal,

Associate Professor,

During the colonial era, the government’s economic policies in India were concerned more with protecting and promoting British interests than with advancing the welfare of the Indian population. Identifying and characterizing the agrarian changes that occurred over the vast area of eastern India, during a period of about hundred years is difficult task, nevertheless the first vital contact between British rule and rural society occurred mainly through the drive of the Company for maximizing the traditional share of the state in the produce of the company in the form of land revenue. Trade and commerce affected the rural society in various ways, and it is notable that the measures towards increasing land revenue were necessitated primarily by the needs of trade and commerce. A large revenue was essentially a larger mercantile capital. The first reaction of the Court of Directors to the jubilant news from Calcutta in 1765, about the acquisition of the Diwani, which gave the Company for the first time an exclusive control over the land revenue of Bengal, Bihar and parts of Orissa was to ask the Company in Bengal, to enlarge every channel for conveying to them as early as possible the annual produce of their acquisitions and to increase the investment of the Company to the utmost extent. Parts of the resources were later diverted to the fulfillment of other needs of the Company’s two other Presidencies, Bombay and Madras, and those of the Company’s treasury at Canton. Such diverse needs which were more pressing than those of the old Mughal state, led the Company to demand a much larger revenue. The demand between 1765-66 and 1793 nearly doubled.

The Permanent Settlement of 1793 made the zamindars proprietors of the soil. It did not mean a complete freezing of the land revenue and the Company could secure an increase in it from time to time. The number of estates of defaulting zamindars, which for want of bidders in the early years of the depressed land market, remained with the government, and the portions of the immense wasteland which at the time of settlement were not included in the zamindar’s estates, became increasingly profitable with the growth of cultivation and rising prices. The largest part of the increase came from the resumption of ‘rent-free’ lands, lands exempted from the payment of revenue under the previous governments, so that the income from them could be spent on what the government judged worthy causes, such as the maintenance of temples, mosques and educational institutions. In the Patna district the increase in the revenue through such resumptions between 1790 and 1870 amounted to 48%.Despite such occasional increases the share of the government in the total agricultural output tended to diminish over the years. The land revenue demand which is 1793 was fixed at 90% of the rental declined by the end of the nineteenth century to about 28%.The Bengal model was however, rejected in Orissa and Assam owing to a growing feeling that the freezing of the land revenue demand, which constituted by far the most important source of the government income at that time, would be sheer folly , particularly in view of the tendency of the financial needs of the state to increase , and also of the probable depreciation of silver in the future. Both in Orissa and Assam the revenue demand was increased from time to time. In Orissa compared with the last twelve years of Maratha rule 1791 to 1802, the land revenue income of the new government in 1804-5 increased to about 12%.Between 1805 and 1897 occurred a further increase of 93%.Peasants in Assam evidently surrendered to the state a larger proportion of their total agricultural output than peasants in other parts of eastern India, and they suffered all the greater till about the end of the nineteenth century because of...
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