- The Indian economy was largely agrarian throughout the pre-colonial period, and agriculture was the principal activity of the population.
- To gain the greatest economic benefit, the British conquerors relied on land revenue as the primary source of income for the state.
- Following the Battle of Plassey, the British won the authority to collect income from the Bengal province.
- Warren Hastings proposed the first land income settlement, presuming that all land belonged to the king. He made the following changes:
- He auctioned off the land to the highest bidder.
- Old zamindars/families were discarded, and the annual settlement was modified to quinquennial (five-yearly) and then returned to normal.
What is Land Revenue?
- Land revenue is a tax or revenue placed on land-based agricultural production. Since time immemorial, the Indian state has collected a portion of agricultural production as land income.
- It has historically been the primary source of money for empires. It is collected either as a proportion of the entire crop or as a monetary value put on the land to be paid by the farmer.
- It had done so either directly or indirectly through middlemen like as zamindars, revenue farmers, and others who collected land income from cultivators and pocketed a portion of it as a commission.
- These intermediaries were mostly land revenue collectors, though they did occasionally own some property in the region from which they collected income.
- Early EIC administrators worked on the basis that the company was entitled to the full economic rent, leaving only cultivation expenses and wages to the farmers, resulting in the demise of agriculture.
- Large swaths of land were abandoned for farming, and famines were common. Excessive desire for land revenue has been proved to be unproductive. This unfavourable circumstance compelled policymakers in India to experiment with land tenure.
Land Revenue System Under British rule
- Since acquiring Diwani rights (the power to collect taxes on behalf of the Emperor) for Bengal, Bihar, and Orissa in 1765, the Company’s main aim has been to enhance land revenue collection, which has historically been the state’s main source of revenue in India.
- Until 1813, nearly all-important reforms in the administration and judicial system were to the collecting of land revenues.
- The Indian peasant or rabble bore most of the burden of producing money for the Company’s commerce and profits, the expense of administration, and the battles of British expansion in India.
- The British could not have conquered such a big nation as India if they did not aggressively tax the peasantry. They implemented revenue collecting policies by rejecting the age-old revenue management structure.
- Their strategies were designed to maximize land income while disregarding the effects on growers and peasants.
Zamindari System or Permanent Settlement
- Lord Cornwallis first implemented this approach in 1793. This method was only available in Bengal, Bihar, and Odisha.
- The zamindar was regarded as the landowner under the system, with the authority to mortgage, bequeath, and sell the property.
- They collected land revenue, one-eleventh of which they kept as pay, and the balance was deposited by the firm. The need for land revenue was fixed, but the rent realized by the farmer was not.
Features of Zamindari system:
- Zamindars were recognized as the hereditary owner of the land and received the right of inheritance.
- Landlords can sell or transfer the land as per their wishes. The landlord’s property remains as long as it pays a certain income to the government on the specified day. If they don’t pay, their rights will be extinguished and the land will be auctioned.
- The amount to be paid to the landlords was a fixed amount. It was decided that it would not increase in the future (forever).
- The fixed amount was 10/11 of revenue to the Britishers and 1/11 of revenue to zamindar. This tax rate was much higher than in England.
- The zamindar also had to give the tenant a patent describing the land given to him and the rent that the zamindar had to pay.
- The responsibility of looking after the peasants fell on the shoulders of the Indian landlords. Everyone felt safe since the agreement was in place indefinitely. The corporation was aware of how much money it was making.
- The sum was likewise guaranteed to the owner. After all, the farmers relied on their land rather than a hoof and knew how much rent they would have to pay.
Demerits of Zamindari system
- The land income system had a terrible direct impact on the zamindars. Many of them were unable to generate land revenue from their tenants and hence were unable to pay the government on time.
- As a result, their property was sold; but, contrary to their hopes, the zamindars showed little interest in improving their land. The landlord became an absentee landowner in Calcutta or the surrounding countryside. The permanent colony ignored the rights of its residents.
- They were entirely exposed to the landowners, which made them feel unsafe at any time. The government lost a portion of the unearned increase for the rest of its existence.
Comparison of the revenue system in Britain and India
- The landlord in Britain was the owner of land not only to the tenant but also according to the state.
- But in Bengal, while the zamindar was the landlord over the tenant, he was himself subordinate to the state.
- He was reduced virtually to the status of a tenant of the East India Company.
- In contrast to the British landlord, who paid a small share of his income as land tax, zamindar had to pay as tax 10/11th of his income from the land of which he was supposed to be the owner; and he could be turned out of the land unceremoniously and his estate sold if he failed to pay the revenue in time.
The requirement for political alliances: Land Revenue Systems
- British officials recognized that their control would be fragile in India since they were foreigners unless they found local friends who would act as a buffer between them and the Indian people.
- This argument was essential since Bengal had multiple popular revolts in the late eighteenth century.
- As a result, they established a wealthy and privileged elite of zamindars who relied on British rule and were obligated to protect it.
- This prediction was later verified when the zamindars as a class sided with the foreign government against the rising freedom movement.
- Prior to 1793, the Company’s principal source of income, land revenue, was plagued by unpredictability.
- Because land revenue was now established at a higher level than it had ever been previously, Permanent Settlement enabled the Company to optimise its revenues.
- Revenue collection via a small number of zamindars looked to be more simpler and less expensive than dealing with thousands of peasants.
Impact of Land Revenue System Under Permanent Settlement
Why Because the land revenue would be fixed in perpetuity, the business established excessively high rates (10/11th of total collection), much higher than prior rates.
The zamindars had a great weight as a result of this, which was subsequently borne by the peasantry.
The tenantry in Bengal and Bihar was fully at the mercy of the zamindars, which led in the growth of absentee landlordism. These zamindars were just interested in growing their revenue and had no desire to participate in agriculture.
High revenue demand and strict collection procedures finally resulted in frequent land transfers, which harmed zamindars.
The corporation’s revenue collection has also reduced as agricultural output has declined. By the 1770s, Bengal had experienced famines.
- In May 1820, Thomas Munro founded the Ryotwari System. This system was restricted to much of southern India, having begun in Tamil Nadu and subsequently spread to Bombay, Madras, certain portions of east Punjab, Coorg Province, and Assam.
- The Ryots (peasants) were given land rights and were directly liable for paying land taxes to the governments under this system.
- The Ryotwari Settlement was introduced in the Madras and Bombay Presidencies at the beginning of the nineteenth century.
- It was first limited to Malabar, Coimbatore, Madras, Assam, and Madurai, but was later enlarged to encompass Maharashtra and East Bengal. It was carried out on the suggestion of British officials Reed and Sir Thomas Munro.
Features of Ryotwari System
- As agricultural output has fallen, so has revenue collection for the corporation. By the 1770s, Bengal had experienced famines.
- The government rates were fixed in this arrangement, with wetland and dryland rates of 60% and 50%, respectively.
- The Bengal and Bihar tenantry was fully at the mercy of the zamindars, which resulted in the creation of an absentee landlordism regime.
- These zamindars were only interested in maximising their money collection and had no inclination to invest in agriculture.
- High revenue demand and strict collection procedures finally resulted in frequent land transfers, which harmed zamindars.
Demerits Ryotwari System: Land Revenue Systems
- Excessive revenue rates have rendered agriculture unprofitable.
- The gathering process was severe.
- He transformed the relationship between creditors and debtors, spawning a new class of usurers.
- The farmer could only pay the interest since the interest rate was so high.
- The value of the land has decreased.
- The measurement was off therefore the output estimate was wrong.
- There was no legal challenge to the overvaluation.
Reasons for the Adoption of the Ryotwari System
- According to British authorities, there are no zamindars or feudal lords with huge estates in south and south-western India. As a result, the British found it impossible to establish the zamindari system.
- Because the government’s income were fixed under the permanent settlement, it could not benefit from price increases.
- Furthermore, the government believed that revenue was being unduly split with zamindars, reducing its earnings.
- The zamindari system oppressed peasants and resulted in recurrent agricultural revolts. The government intended to avoid such occurrences.
- It also thought that by instituting the ryotwari system, peasants’ purchasing power would rise, increasing demand for British goods in India.
- Farmers paid land revenue directly to the state, which helped to eliminate the middlemen who frequently exploited villages.
- Peasants could not be expelled from their land as long as they paid the land tax. The assessment is based on individual cultivators, field measurements, and produce estimates.
Impact of Land Revenue System Under Ryotwari System
- The peasants did not benefit from this land revenue system and felt that smaller zamindars we are replaced by one giant zamindar, the British government.
- High land revenue led the impoverishment of farmers
- A major drawback of this system was over the assessment of crop yields.
- The system of tenancy and landlordism still existed as the artisans who were now unemployed, worked as tenants for rich farmers.
- In several districts, more than two-thirds of the total agricultural land was leased.
- The government insisted the peasants grow cash crops which required higher investments. It led to the indebtedness of farmers and when prices declined they suffered the most.
Mahalwari System: Land Revenue Systems
• Holt Mackenzie first created the Mahalwari method in 1822, and Lord William Bentinck updated it in 1833.
• This type of habitation spread throughout the Ganges Valley, the North-Western Provinces, sections of central India, and Punjab.
• It is a variant of the zamindari settlement, which was established in the Ganga valley, the North-West Provinces, sections of central India, and Punjab. The village system, a modified Mahalwari System, was established in Punjab.
• There was frequently a system of communal landholdings by the heads of families or landlords in these places. The local community was dominated by a group of elders, mostly from upper castes.
• The riots rights of ownership of his land were negated by the following factors:
- The administration explicitly stated that land revenue was not a tax but rather a rent.
- The fixed land revenue in most locations was excessive.
- The government kept the ability to increase land revenue at any time.
- Even amid famines and floods, the ryot were required to pay tax or face eviction from the land.
Features of Mahalwari System:
- In this system, the foundation of assessment was the produce of a mahal, and all mahal proprietors were jointly liable for income administration and payment. This Mahal was often formed by one or more villages.
- This was a two-part agreement. Individual peasants were given occupation and ownership rights, and farming was done independently.
- They were compelled to pay the land income jointly through the village headman or community leaders. The cultivation was done on an individual basis, while the land revenue was collected collectively.
Demerits of Mahalwari System: Land Revenue Systems
- In practise, select leading groupings of notable families were granted rights.
- In general, peasants were pushed into positions as renters, coworkers, and so on.
- Economic and social inequities widened, and peasants were stressed.
- There has been no gain in terms of production.
Impacts of Land Revenue System Under Mahalwari System
- The Mahalwari system in Northern India covered fertile land, therefore the government set its revenue requirements at 50% to 75% of agricultural yield.
- The lands were split through following generations, but the tax demand remained substantial and had to be paid in cash. As a result, they were indebted to money lenders.
- This technique also resulted in the displacement of farmers from their land. Subleasing of land was increasingly widespread in Mahalwari regions as a result of this.
Land Revenue Systems in British India FAQs
Q1 Who devised the Ryotwari system?
A1 Capt. Alexander Read and Thomas (later Sir Thomas) Munro designed the method towards the end of the 18th century, and the latter implemented it as governor of Madras (1820-27).
Q2 Why did the British institute a new system of land taxation in India?
A2 Because of the limits of the Permanent Settlement of Bengal, the British instituted new land revenue regimes. Holt Mackenzie, a British official, developed the ‘Mahalwari system,’ a new revenue system in the Central Provinces, North West Frontier Provinces, Agra, Punjab, and the Gangetic Valley.
Q3 What were the consequences of the British land revenue systems?
A3 The revenue was fixed at a fairly high rate in all of these land revenue regimes. In the Permanent settlement, the Company fixed the revenue so high that zamindars found it impossible to pay revenues to the Company. Villagers found the colony harsh since they had to pay hefty rent to the zamindars.
Q4 What are the primary factors influencing British land-revenue policy in India?
A4 The British adopted numerous forms of land revenue schemes in India throughout their reign, such as permanent settlement and the ryotwari system. The British Land Income Policy in India was affected by a number of key variables, but the fundamental purpose was to maximise revenue.
Q5 What differences exist between the Ryotwari and Mahalwari systems?
A5 The village headmen collected land income from farmers on behalf of the entire village under the Mahalwari system. Farmers paid land revenue directly to the state under the Ryotwari system. In 1793, the Imperialist East India Company founded the Zamindari system.
Q6 Who established India’s land revenue system?
A6 Sir Thomas Munro, Governor of Madras in 1820, established this system of land tax in the late 18th century. This was done throughout the Madras and Bombay regions, as well as the provinces of Assam and Coorg.
Q7 How did the British land revenue system effect north Indian farmers?
A7 The Zamindari, Ryotwari, and Mahalwari systems were introduced by the British. Farmers’ land ownership rights were revoked during the Zamindari era. The size of the parcel of land was used to compute the land tax. Zamindars collected more taxes and extorted more money from farmers.
Q8 In 1833, who instituted the Mahalwari system?
A8 The Mahalwari land revenue programme was launched in 1833 by the ministry of Lord William Bentinck, Governor-General of India (1828-1835).