Ruling The Country Side


The Company Become the Diwan

The East India Company became the Diwan of Bengal on 12 August 1765. As Diwan, the Company became the chief financial administrator of the territory under its control. The Company needed to administer the land and organise its revenue resources. It needed to be done in a way that could yield enough revenue to meet the growing expenses of the company.


Revenue for the Company

The Company’s aim was to increase revenue by buying fine cotton and silk cloth as cheaply as possible. Within a span of five years, the value of goods bought by the Company in Bengal doubled. The Company, before 1865, purchased goods in India by importing gold and silver from Britain. Now it was financed by the revenue collected in Bengal. Artisanal production was in decline, and agricultural cultivation showed signs of collapse. Then in 1770, a terrible famine killed ten million people in Bengal.


The need to improve agriculture

In 1793, the Company introduced the Permanent Settlement. By the terms of the settlement, the rajas and taluqdars were recognised as zamindars, who were asked to collect rent from the peasants and pay revenue to the Company. The amount to be paid was fixed permanently. This settlement would ensure a regular flow of revenue into the Company’s coffers and, at the same time, encourage the zamindars to invest in improving the land.


The problem

The Permanent Settlement created problems. Soon, the company officials discovered that the zamindars were not investing in the improvement of land because the fixed revenue was very high. By the first decade of the nineteenth century, the situation changed. The prices in the market rose, and cultivation slowly expanded. Even then, the zamindars were not interested in improving the land.

In the villages, the cultivator found the system extremely oppressive. The rent they paid to the zamindar was high, so they took a loan from the moneylender, and when they failed to pay the rent, they were evicted from the land.


A new system was devised

The Company officials decided to change the system of revenue. Holt Mackenzie devised the new system, which came into effect in 1822. Under his directions, collectors went from village to village, inspecting the land, measuring the fields, and recording the customs and rights of different groups. The estimated revenue of each plot within a village was added up to calculate the revenue that each village (mahal) had to pay. This demand was to be 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 settlement.


The Munro system

In the British territories in the south, a new system was devised known as the ryotwar (or ryotwari). This system was gradually extended all over South India. The settlement had to be made directly with the cultivators (ryots) who had tilled the land for generations. Their fields had to be carefully and separately surveyed before the revenue assessment was made.


All was not well

In order to increase the income from land, revenue officials fixed high revenue demand. Peasants were unable to pay, ryots fled the countryside, and villages became deserted in many regions.


Crops for Europe

By the late eighteenth century, the Company tried to expand the cultivation of opium and indigo. The Company forced cultivators in various parts of India to produce other crops: jute in Bengal, tea in Assam, sugarcane in the United Provinces (now Uttar Pradesh), wheat in Punjab, cotton in Maharashtra and Punjab, rice in Madras.


Does colour have a history?

The rich blue colour was produced from a plant called indigo. The blue dye used in the Morris prints in nineteenth-century Britain was manufactured from indigo plants cultivated in India. India was the biggest supplier of indigo in the world at that time.


Why the demand for Indian indigo?

Indigo plants grow in the tropics, and Indian indigo was used by cloth manufacturers in Italy, France and Britain to dye cloth. Small amounts of Indian indigo reached the European market, and its price was very high. Therefore, European cloth manufacturers had to depend on another plant called woad to make violet and blue dyes. Indigo produced a rich blue colour, whereas the dye from woad was pale and dull. By the end of the eighteenth century, the demand for Indian indigo grew further. While the demand for indigo increased, its existing supplies from the West Indies and America collapsed for a variety of reasons. Between 1783 and 1789 the production of indigo in the world fell by half.


Britain turns to India

In Europe, the demand for indigo was high, so the Company in India looked for ways to expand the area under indigo cultivation. Gradually, the indigo trade grew, so commercial agents and officials of the Company began investing in indigo production. The Company officials were attracted by the prospect of high profits and came to India to become indigo planters.


How was indigo cultivated?

There were two main systems of indigo cultivation – Nij and Ryoti. Within the 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.


The problem with Nij cultivation

Under Nij cultivation, the planters found it difficult to expand the area. Indigo could only be cultivated on fertile lands. Planters attempted to lease land around the indigo factory and evict the peasants from the area. Nij cultivation on a large scale also required many ploughs and bullocks. Till the late nineteenth century, planters were, therefore, reluctant to expand the area under Nij cultivation.


Indigo on the land of Ryots

The planters, under the ryoti system, were forced to sign a contract, an agreement (satta). Those who signed the contract got cash advances from the planters at low rates of interest to produce indigo. When the harvested crop was delivered to the planter, a new loan was sanctioned, and the cycle started all over again. Peasants soon realised how the loan system was. After an indigo harvest, the land could not be sown with rice.


The “Blue Rebellion” and After

Ryots in Bengal refused to grow indigo. People who worked for the planters were socially boycotted, and the Gomasthas – agents of planters – who came to collect rent were beaten up. The Bengal ryots had the support of the local zamindars and village headmen in their rebellion against the planters. The Indigo peasants believed that the British government would support them in their struggle against the planters. After the Revolt of 1857, the British government was worried about the possibility of another popular rebellion. As the rebellion spread, intellectuals from Calcutta rushed to the indigo districts. The government set up the Indigo Commission to enquire into the system of indigo production. The Commission asked the ryots to fulfil their existing contracts but also told them that they could refuse to produce indigo in future.

Indigo production collapsed in Bengal after the revolt. When Mahatma Gandhi returned from South Africa, a peasant from Bihar persuaded him to visit Champaran and see the plight of the indigo cultivators. In 1917, he visited, which marked the beginning of the Champaran movement against the indigo planters.