The Permanent Settlement, introduced in 1793, gave absolute rights to land to zamindar landowners

Tuesday, April 18th, 2023

In India, Cornwallis set about making a series of land and taxation reforms guaranteeing a steady flow of revenue, particularly in time of war, William Dalrymple explains (in The Anarchy), as well as reinforcing the Company’s control of the land it had conquered:

The Permanent Settlement, introduced in 1793, gave absolute rights to land to zamindar landowners, on the condition that they paid a sum of land tax which Company officials now fixed in perpetuity. So long as zamindars paid their revenues punctually, they had security over the land from which the revenue came. If they failed to pay up, the land would be sold to someone else.

These reforms quickly produced a revolution in landholding in Company Bengal: many large old estates were split up, with former servants flocking to sale rooms to buy up their ex-masters’ holdings. In the ensuing decades, draconian tax assessments led to nearly 50 per cent of estates changing hands. Many old Mughal landowning families were ruined and forced to sell, a highly unequal agrarian society was produced and the peasant farmers found their lives harder than ever. But from the point of view of the Company, Cornwallis’s reforms were a huge success. Income from land revenues was both and enormously increased; taxes now arrived punctually and in full. Moreover, those who had bought land from the old zamindars were in many ways throwing in their lot with the new Company order. In this way, a new class of largely Hindu pro-British Bengali bankers and traders began to emerge as moneyed landowners to whom the Company could devolve local responsibility.

So even as the old Mughal aristocracy was losing high office, a new Hindu service gentry came to replace them at the top of the social ladder in Company-ruled Bengal. This group of emergent Bengali bhadralok (upper-middle classes) represented by families such as the Tagores, the Debs and the Mullicks, tightened their grip on mid-level public office in Calcutta, as well as their control of agrarian peasant production and the trade of the bazaars. They participated in the new cash crop trades to Calcutta–Dwarkanath Tagore, for example, making a fortune at this time in indigo–while continuing to lend the Company money, often for as much as 10–12 per cent interest. It was loans from this class which helped finance colonial armies and bought the muskets, cannon, horses, elephants, bullocks and paid the military salaries which allowed Company armies to wage and win their wars against other Indian states. The Company’s ever-growing Indian empire could not have been achieved without the political and economic support of regional power groups and local communities. The edifice of the East India Company was sustained by the delicate balance that the Company was able to maintain with merchants and mercenaries, its allied nawabs and rajas, and above all, its tame bankers.

In the end it was this access to unlimited reserves of credit, partly through stable flows of land revenues, and partly through the collaboration of Indian moneylenders and financiers, that in this period finally gave the Company its edge over their Indian rivals. It was no longer superior European military technology, nor powers of administration that made the difference. It was the ability to mobilise and transfer massive financial resources that enabled the Company to put the largest and best-trained army in the eastern world into the field.

Comments

  1. Michael van der Riet says:

    I can’t believe how long it’s taking you to read this book. Even my typical toilet book doesn’t last longer than two weeks.

  2. Jim says:

    He’s already read it through.

  3. Jim says:

    The edifice of the East India Company was sustained by the delicate balance that the Company was able to maintain with merchants and mercenaries, its allied nawabs and rajas, and above all, its tame bankers.

    And above all, its what, now?

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