📘 Ruling the Countryside
1. The Company Becomes the Diwan (1765)
• On 12 August 1765, the Mughal emperor appointed the
East India Company(Robert Clive) as the Diwan of Bengal, Bihar and
Orrisa.
• The Company was no longer just a trading company but
became the chief financial administrator.
1. It could now collect revenue directly from peasants.
2. With this revenue, it could meet growing expenses of the
Company, maintain its army, and fund expansion. Before 1765, the
company had purchased goods in india by importing gold and silver
from Britain, now, revenue could meet the needs.
3. Within 5 years, the value of goods bought from Bengal
doubled. It could buy products such as cotton, silk, and opium at
cheaper rates. It could purchase for export also.
• Result: The Company became very powerful, but this shift
put a heavy burden on peasants and artisans.
2. The Bengal Economy in Crisis
• The Company was concerned only with large revenue
collection without regular assesment and not with people’s welfare.
Impact on artisans and weavers:
• They were forced to sell their goods at very low prices.
• Many deserted villages, leading to a decline in local
crafts.
Impact on peasants:
• Faced ever-increasing revenue demands.
• Could not pay taxes on time. And agriculture collapsed.
The Famine of 1770:
• A terrible famine killed nearly 10 million people in Bengal.
• One-third of Bengal’s population perished.
• Despite this, the Company did not reduce revenue
demands, which worsened the crisis.
, Weekly market in Bengal in Murshidabad- affected economic crisis
badly
3. The Permanent Settlement (1793)
• Introduced by Lord Cornwallis in Bengal, Bihar, and
Orissa.
• Aim: To ensure a regular flow of revenue for the Company
and create a class of loyal landlords.
1. Rajas and taluqdars were recognised as Zamindars
2. They had to collect rent from peasants and pay the
revenue to Company a fixed amount every year.
3. Once fixed, this revenue demand would not increase in
the future.
4. If zamindars failed to pay, their land could be taken away.
• Company’s expectation: Zamindars would invest in
improving agriculture since they could keep profits from increased
production.
• Reality:
• Zamindars did not invest in improvements.
• the revenue fixed was so high that the zamindars found it
difficult to pay. Anyone who failed to pay revenue lost
zamindari and were sold at auctions organised by
company.
• Peasants were left poor and overburdened.
• at first the prices in market rose and the cultivation
slowly expanded
• this meant an increase in the income of the zamindar but
no gain for the company
• the zamindars were not interested in improving land as
long as they could rent land to tentants and get rent
• cultivator found this system extremely oppressive the
rent he had to pay was high and his rights on the land
was insecure, to pay rent he took loans and when he
failed to pay the pay the rent he was evicted from the
land he had cultivated for generations
4. The Ryotwari or Munro System
1. The Company Becomes the Diwan (1765)
• On 12 August 1765, the Mughal emperor appointed the
East India Company(Robert Clive) as the Diwan of Bengal, Bihar and
Orrisa.
• The Company was no longer just a trading company but
became the chief financial administrator.
1. It could now collect revenue directly from peasants.
2. With this revenue, it could meet growing expenses of the
Company, maintain its army, and fund expansion. Before 1765, the
company had purchased goods in india by importing gold and silver
from Britain, now, revenue could meet the needs.
3. Within 5 years, the value of goods bought from Bengal
doubled. It could buy products such as cotton, silk, and opium at
cheaper rates. It could purchase for export also.
• Result: The Company became very powerful, but this shift
put a heavy burden on peasants and artisans.
2. The Bengal Economy in Crisis
• The Company was concerned only with large revenue
collection without regular assesment and not with people’s welfare.
Impact on artisans and weavers:
• They were forced to sell their goods at very low prices.
• Many deserted villages, leading to a decline in local
crafts.
Impact on peasants:
• Faced ever-increasing revenue demands.
• Could not pay taxes on time. And agriculture collapsed.
The Famine of 1770:
• A terrible famine killed nearly 10 million people in Bengal.
• One-third of Bengal’s population perished.
• Despite this, the Company did not reduce revenue
demands, which worsened the crisis.
, Weekly market in Bengal in Murshidabad- affected economic crisis
badly
3. The Permanent Settlement (1793)
• Introduced by Lord Cornwallis in Bengal, Bihar, and
Orissa.
• Aim: To ensure a regular flow of revenue for the Company
and create a class of loyal landlords.
1. Rajas and taluqdars were recognised as Zamindars
2. They had to collect rent from peasants and pay the
revenue to Company a fixed amount every year.
3. Once fixed, this revenue demand would not increase in
the future.
4. If zamindars failed to pay, their land could be taken away.
• Company’s expectation: Zamindars would invest in
improving agriculture since they could keep profits from increased
production.
• Reality:
• Zamindars did not invest in improvements.
• the revenue fixed was so high that the zamindars found it
difficult to pay. Anyone who failed to pay revenue lost
zamindari and were sold at auctions organised by
company.
• Peasants were left poor and overburdened.
• at first the prices in market rose and the cultivation
slowly expanded
• this meant an increase in the income of the zamindar but
no gain for the company
• the zamindars were not interested in improving land as
long as they could rent land to tentants and get rent
• cultivator found this system extremely oppressive the
rent he had to pay was high and his rights on the land
was insecure, to pay rent he took loans and when he
failed to pay the pay the rent he was evicted from the
land he had cultivated for generations
4. The Ryotwari or Munro System
