The document discusses the revenue systems established by the British East India Company after it became the diwan, or tax collector, of Bengal in 1765. It describes three main systems - the Permanent Settlement of 1793, which recognized zamindars and fixed revenues permanently; the Mahalwari system of 1822, which assessed revenues at the village level; and the Ryotwari or Munro system in southern India, which settled revenues directly with cultivators. However, all three systems failed as revenue demands were too high and peasants struggled to pay, leading to deserted villages. The document also explains how the British promoted certain cash crops for export, including indigo, and the role of indigo cultivation in India

2. Introduction
In the last chapter we saw how the Company established its
power ( From Trade to Territory) and how the Company
became Diwan.
Here we discuss what happened after company becoming
Diwan or how the company organised their revenues, for that
we study three revenue systems such as i) Permanent
settlement ii) Mahalwari system iii) Munro system or
Ryotwary system.
Then we also see how the British grow crops they required ,
one such crop is Indigo and the method of production. Then
we also study about the Blue Rebellion and what happened
after the Blue Rebellion.

3. The Company becomes Diwan
In the last chapter we discussed the Company became diwan ,
in this chapter we study what happened after the company
becoming diwan.
On 12th August 1765, the Mughal Emperor Sha Alam II
appointed the East India Company as the Diwan of Bengal in
Robert Clive’s Tent.
[ Image where Robert Clive is accepting Diwani Right over
Bihar, Orissa and Bengal]

4. After the Battle of Buxar Mughal emperor was forced to
issue the Diwani Rights ( Right to collect Tax).
 As Diwan, the Company became the chief financial
administrator and had to administer the land and organise its
revenue resources.
This had to be done in a way that could yield enough
revenue to meet the growing expenses of the company and
could buy all the products it needed and sell what it wanted.
 So, over the years the company learnt that those had held
local power had to be controlled but they could not be
entirely eliminated to pacify who had ruled the countryside.
For this what was done? We will see how the company came
to
•Colonise the countryside
• Organise revenue resources
•Redefined the rights of people and how they produced the
crops they wanted.

5. Revenue for the company
Let’s see how the company organised revenue resources?
 Even though the company became the Diwan of Bengal the
company saw itself primarily as a trader and they wanted
larger revenue income
 For this what they did ? They didn’t set up any regular
revenue system. So simply they wanted to increase revenue as
much as it could and buy fine cotton and silk cloth as cheaply
as possible.

6. Within five years the value of these goods bought by the
company in Bengal doubled. ( Before 1865, the company
had to purchase goods in India by importing gold and silver
from Britain).
 But now the revenue collected in Bengal could finance the
purchase of goods for export and maintainance of the army
etc.
 And soon the Bengal economy started falling drastically,
because of the following reasons.
i) The artisans were deserting villages as they were forced
to sell their goods to the company at low prices.
ii) Peasants were unable to pay the revenue dues.
iii) And Artisanal production was in decline and
agricultural cultivation started to collapse.
iv) Then in 1770 a terrible famine killed ten million people
in Bengal that is about 1/3rd of the population was wiped
out.

7. 1. Image of Murshidabad weekly
market where peasants & artisans
from rural area regularly came to
sell their produce but these
markets were badly affected
during Economic crisis.
2. Image of Bengal Famine 1770 about
10 million people killed.

8. The need to improve agriculture
 This economic crises effected the company’s income so,
most of the company officials began to feel that agriculture
had to be improved because they knew their revenue
depended on Indian agriculture.
 After two decades of debate the company introduced a new
revenue system name as “Permanent settlement” in 1793, by
Governor General Charles Cornwallis.

9. Terms of the Permanent Settlement:
 The rajas and talukdars were recognised as Zamindars.
 And the Zamindars were asked to collect rent from the
peasants and pay revenue to the company.
 The amount to be paid was fixed permanently.
 The government thought this would ensure a regular flow
of revenue in company’s coffers and at the same time
encourage the zamindars to invest in improving the land. As
agriculture improves, revenue also increases and Zamindars
aslo get benefited.

10. The problems of Permanent Settlement
The permanent settlement, however created problems:
 The Company officials noticed that the Zamindars were not
investing in the improvement of land. Why was it so? Because
as revenue that had been fixed was so high they faced it
difficult to pay and any one who failed to pay the revenue lost
his zamindari and numerous zamindaris were sold of at
auction organised by the company.
 But by the 1st decade of the 19th century, the situation
changed, the prices in the market rose and cultivation slowly
expanded, so there was an increase in the income of the
Zamindars, but no gain for the company, since the revenue
demand had been fixed permanently. This was an issue of the
company.

11.  Even then the Zamindars did not have an interest in
improving the land, because they had lost lots of land in the
early years of settlement. So now they did not want to take
risk , instead they were giving land to the tenant and getting
rent.
 In other hand in villages the cultivators found the system
oppressive. Because;
i) The rent he paid to the zamindar was high.
ii) And his right on the land was insecure.
iii) To pay the rent he had to take loan oftenly from the
moneylender and when he failed to pay the rent he was
evicted from the land he had cultivated for generations.
In short we come to know that the permanent settlement
had problems with zamindars, cultivators and the
company.

12. A new system is devised-The
Mahalwari settlement
 By the early 19th century, the company officials wanted to
change the system of revenue, because the company needed
more money, where as in permanent settlement revenues were
fixed, so they had to change the system of revenue.
 In the North western province of the Bengal an English
man Holt Mackenzie devised the new system which came into
effect in 1822 and this system is called as Mahalwari system.

13. Under his directions:
Collectors went from village to village , inspecting the
land, measuring the fields and recording customs of different
groups of villages.
 The estimated revenue of each plot within a village was
added up to calculate the revenue that each village(Mahal)
had to pay.( Mahal- at the British rule was a revenue estate or
a village or a group of villages).

14. Conti…….
The demand was to revised periodically, not permanently
fixed.
The charge of collecting the revenue and paying it to the
company was given to the village headman, rather than the
Zamindar.
This system came to be known as the Mahalwari system and
this came in to effect in the year 1822.

15. The Munro System
The Mahalwari system devised in the North, in the south the
new system was devised known as the Ryotwari system or
Munro system.
It was tried in a small scale by Captain Alexander Read and
was later developed by Thomas Munro and this system was
gradually extended all over south and this system is called
Munro system or Ryotwari system.
 Read and Munro noticed that in the south there were no
Zamindars.

16.  The settlement had to be made directly with the
cultivators(Ryots).
 Their fields had to be carefully and separately surveyed
before the revenue assessments was made.
Munro thought that the British should act as paternal father
figures protecting the land under their charge.
But all was not well, because:
British introduced two three revenue systems for high income
from land but revenue officials fixed too high revenue
demand.
i) Peasants were unable to pay, ryots fled the countryside and
villages became deserted in many regions.

17. The officials had imagined that the new systems would
transform the peasants in to rich farmers but this did not
happen, they all were failures.
Till now we discussed how company organised the
revenue system.

18. Crops for Europe( How company
produced the crops they wanted)
 The British also realised that in countryside they could
yield revenue and also they could grow crops that Europe
required.
 By the late 18th century the company tried to expand
cultivation of Opium and Indigo.
The British persuaded or forced the cultivators to grow
other crops such as Jute in Bengal, Wheat in Punjab, Tea in
Assam, Cotton in Maharastra, Sugarcane in the United
province(now UP) & Punjab and Rice in Madras.

19. Conti….
 The British used a variety of methods to expand the
cultivation of crops that they needed . In this chapter we
discuss the story of one such crop and one such method of
production.

20. Does colour have a history?
 The blue that you see in these prints was produced from a
plant called Indigo.
 The first image is a Kalamkari print from Andra Pradesh in
India and second image is a floral cotton designed and
produced by William Morris, using the blue dye
manufactured from indigo plant cultivated in India.
 In the 19th century India was the biggest supplier of indigo
in the world.

21. Why there was a demand for Indian
Indigo?
 The Indigo plant grows primarily in the tropics, hence
India’s climate was suitable for growing Indigo.
 By the 13th century Indian Indigo was being used in Italy,
France, & Britain to dye cloth.
 However, Indian Indigo didn’t reach the European market
and its cost was very high.

22.  Hence the European cloth manufacturers therefore had to
depend on Woad plant to make violet and blue dyes.
 Wood was more easily available in Europe and was grown
in temperate zone like Italy, France, Germany and Britain.
 Worried by the competition of indigo the Woad producers
in Europe pressurised their governments to ban the import of
Indigo.

23. Conti….
 Cloth dyers however preferred indigo as a dye, because
indigo produced a rich blue colour , where as the dye from
Woad was pale and dull.

24.  By the 17th century, European cloth producers asked their
governments to relax the ban on Indigo import, so they could
cultivate indigo and many countries started cultivation of
Indigo.
Ex: The French began cultivating indigo in St. Domingo in
the Caribbean islands.
The Portuguese in Brazil.
The English in Jamaica
The Spanish in Venezuela
And Indigo plantations also came up in many parts of North
America.
 By the end of the 18th century the demand for Indian
Indigo grew.
 And Britain began to industrialize and its cotton
production expanded dramatically creating enormous new
demand for cloth dyes.

25.  While the demand for indigo increased ,its existing
supplies from the West Indies and America collapsed for
variety of reasons( one of the reasons, they used slaves to
work on the indigo plantation, when slavery was abolished
they didn’t get labours to work so production decreased).
 Between 1783 & 1789 the production of indigo in the
world fell by half. Britain now desperately looked for new
sources of indigo supply.
 Hence they had to turn to India.

26. Britain turns to India
 The rising demand of Indigo in Europe the company looks
ways to expand area under Indigo cultivation.
 By the end of 18th century, Indigo cultivation in Bengal
expanded rapidly and dominated the world market.
 In 1788, 30% of the Indigo imported in to Britain was from
India. By 1810, the proportion had gone up to 95%.

27. Conti…
As the Indigo trade grew, many officials of the company
began investing in Indigo production and left their jobs to
look after their indigo business in hope of getting better
income.
 Because of high profits many Scottish men and English
men came to India and became Indigo planters. Those who
had no money to produce indigo could get loans from the
company and some other banks.

28. How was Indigo cultivated?
There were two main system of indigo cultivation NIJ
cultivation and Ryoti cultivation.
Nij cultivation : Within this system of Nij cultivation the
planter produced indigo in lands that he directly controlled.
He either bought the land or rented it from other Zamindars
and produced indigo by directly employing hired labourers.
In India less than 25% of the land producing indigo was
under the nij cultivation system and the rest was under the
ryoti system

29. The problem with Nij cultivation
The planters found it difficult to expand the area under nij
cultivation, because :
i) Indigo could be cultivated only on fertile lands and all the
fertile lands were occupied by food crops and other crops
the Indians required.
ii) Only small plots or scattered plots could be accquired.
iii) Planters needed large areas to cultivate indigo
plantations.
iv) Hence they attempted to lease in the lands around the
indigo factory and evicted the peasants from the area this
led to many conflicts and tensions.

30. Conti…
V) For indigo cultivation a large labour force was required
and at the time of indigo cultivation laboures usually busy in
the harvesting of other crops.
vi) Nij cultivation on a large scale required many ploughs and
bullocks. One Bigha ( Unit of measurement of land at that
time) required 2 ploughs, it means for 100 bigha 200 ploughs
required.
vii) Investing on purchase, maintenance of ploughs and
supplies was a big problem.
Till the late 19th century, planters were therefore reluctant to
expand the area under Nij cultivation.

31. Ryoti System
 Under the Ryoti system, the planters forced the ryots or the
village headmen to sign a contract an agreement(Satta).
 Those who signed, got cash at low rates of interest to
produce indigo.
 But the loan committed the ryot to cultivating indigo on
atleast 2% of the land they are holding.
 The planters provided the equipments, while cultivator
prepared the soil, sowed the seeds etc.

32. The problem with Ryoti cultivation
 When the crop was delivered to the planters after the
harvest the new loan was given to the ryot and the cycle
started all over again.
 The peasants who were tempted by the loans previously
now realised how harsh the system was.
 The price they got for the indigo they produced was very
low and the cycle of loans never ended.
 The planters usually insisted that indigo be cultivated on
the best soils, in which peasants preferred to cultivate rice.
 More over the indigo they had deep roots and it exhausted
the soil fertility. After an indigo harvest the land could not be
sown with rice.
From this we understood both the systems nij and ryoti
had their own defects.

33. The Blue Rebellion and after
 In March 1859 thousands of ryots in Bengal refused to
grow Indigo.
 They refused to pay rents to the planters and attacked
indigo factories , armed with swords and spears, bows and
arrows.
 Women turned up to fight with pots, pans and kitchen
implements.
 They ryots boycotted and the Gomasthas –agents of
planters, who came to collect rents were beaten up.
 Ryots swore they would no longer take advances to sow
indigo nor be harrashed by the planter, s lathiyals.
 The indigo ryots had the support of the local zamindars and
village headmen in their rebellion against planters.

34.  After the revolt of 1857 the British was cautious of the
another rebellion. The Lieutenant Governor toured the
regions in the winter of 1859 and the ryots saw the tour as a
sign of government’s sympathy.
 When in Barasat, the magistrate Ashley Eden issued a
notice stating that ryots would not be compelled(forced) to
accept indigo contracts. Eden was trying to placate( making
less angry) the peasants, but his action was read as support
for the rebellion.
 As the rebellion spread intellectuals from Calcutta rushed
to the rebellion districts and wrote about the tyranny of the
indigo planters, the misery of the indigo ryots and horrors of
the indigo system.

35. Conti….
Worried by the rebellion, the government brought in the
military to protect the planters from assault and set up the
Indigo commission to enquire into the indigo production.
The Commission:
i) The Commission held the planters guilty and criticized
them for the coercive (forcefull) methods they used with
indigo cultivators.
ii) Declared that indigo production was not profitable for
ryots.
iii) Asked ryots to fulfil their existing contracts but also told
them that they could refuse to produce indigo in future.

36. Conti….
 After the revolt indigo production collapsed in Bengal.
But the planters now shifted their operations to the Bihar.
 With the discovery of synthetic dyes in the late 19th century
they managed to expand production.
 When Mahatma Gandhi returned from South Africa a
peasant from Bihar persuaded him to visit Champaran.
 Mahatma Gandhi’s visit in 1917 marked the beginning of
the Champaran movement against the indigo planters.