NCERT Explained: Class VIII History, Chapter 3 - Ruling the Countryside

Introduction to the Topic

In the previous chapters of Class VIII History, we saw how the English East India Company transformed from a simple trading body into a powerful political force. However, winning battles like Plassey and Buxar was only the beginning. The real challenge for the Company was to manage the vast Indian territories and ensure a steady flow of income to fund its trade, wars, and administrative expenses. On August 12, 1765, the Mughal Emperor appointed the East India Company as the Diwan of Bengal. This was a turning point. As Diwan, the Company became the chief financial administrator of the territory under its control. Now, it had to think about administering the land and organizing its revenue resources in a way that could yield enough income to meet the growing expenses of the Company.

This chapter, 'Ruling the Countryside', explores how the Company colonized the countryside, organized revenue resources, redefined the rights of people, and produced the crops it required. It is a story of economic experiments, some of which led to prosperity for a few, but most of which led to immense hardship for the Indian peasantry, eventually sparking one of the most significant farmer uprisings in Indian history—the Blue Rebellion.

Key Concepts Explained

1. The Company Becomes the Diwan

When the Company became the Diwan, it initially saw itself primarily as a trader. It wanted a large revenue income but was unwilling to set up any regular system of assessment and collection. The effort was to increase the revenue as much as it could and buy fine cotton and silk cloth as cheaply as possible. Within five years, the value of goods bought by the Company in Bengal doubled. Before 1765, the Company had imported gold and silver from Britain to buy goods in India. Now, the revenue collected in Bengal could finance the purchase of goods for export.

However, the Bengal economy faced a deep crisis. Artisans were deserting villages because they were being forced to sell their goods to the Company at low prices. Peasants were unable to pay the dues that were being demanded from them. Artisanal production was in decline, and agricultural cultivation showed signs of collapse. Then, in 1770, a terrible famine killed ten million people in Bengal. About one-third of the population was wiped out. This catastrophe forced the Company to realize that it needed to stabilize its revenue system to ensure its own survival.

2. The Need to Invest in Agriculture

If the economy was in ruins, could the Company be certain of its revenue income? Most Company officials began to feel that investment in land had to be encouraged and agriculture had to be improved. But how was this to be done? After two decades of debate on the question, the Company finally introduced the Permanent Settlement in 1793, when Lord Cornwallis was the Governor-General.

3. The Permanent Settlement

Under the Permanent Settlement, the Rajas and Taluqdars were recognized as Zamindars. They were asked to collect rent from the peasants and pay revenue to the Company. The amount to be paid was fixed permanently—that is, it was not to be increased ever in the future. The Company felt this would ensure a regular flow of revenue and at the same time encourage the Zamindars to invest in improving the land. Since the state revenue demand would not be increased, the Zamindar would benefit from increased production from the land.

Problems with the Permanent Settlement:
Despite its intentions, the Permanent Settlement created many problems. Company officials soon discovered that the Zamindars were, in fact, not investing in the improvement of land. The fixed revenue was so high that the Zamindars found it difficult to pay. Anyone who failed to pay the revenue lost his zamindari. Numerous zamindaris were sold off at auctions organized by the Company. By the first decade of the nineteenth century, the situation changed. Prices in the market rose and cultivation slowly expanded. This meant an increase in the income of the Zamindars but no gain for the Company since it could not increase a revenue demand that had been fixed permanently. On the other hand, the cultivator found the system extremely oppressive. The rent he paid to the Zamindar was high and his right on the land was insecure.

4. The Mahalwari System

In the North-Western Provinces of the Bengal Presidency (most of this area is now in Uttar Pradesh), an Englishman named Holt Mackenzie devised a new system which came into effect in 1822. He felt that the village was an important social institution in north Indian society and needed to be preserved. 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.

5. The Munro System (Ryotwari)

In the British territories in the south, there was a similar move away from the idea of Permanent Settlement. The new system that was devised came to be known as the Ryotwari system. It was tried on a small scale by Captain Alexander Read and subsequently developed by Thomas Munro. This system was gradually extended all over south India. Read and Munro felt that in the south there were no traditional Zamindars. The settlement, they argued, 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. Munro thought that the British should act as paternal father figures protecting the ryots under their charge.

6. Crops for Europe

The British also realized that the countryside could not only yield revenue, it could also grow the crops that Europe required. By the late eighteenth century, the Company was trying its best to expand the cultivation of opium and indigo. In the century and a half that followed, the British persuaded or 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, and rice in Madras.

7. The Demand for Indian Indigo

Indigo is a plant that produces a rich blue color. In the eighteenth century, Indian indigo was the most preferred dye in Europe. Because of the Industrial Revolution, cotton production expanded dramatically in Britain, creating an enormous new demand for cloth dyes. While the demand for indigo increased, its existing supplies from the West Indies and America collapsed for various reasons between 1783 and 1789. Cloth dyers in Britain now desperately looked for new sources of indigo supply. The Company in India looked for ways to expand the area under indigo cultivation.

From the last decades of the eighteenth century, indigo cultivation in Bengal expanded rapidly and Bengal indigo came to dominate the world market. In 1788, only about 30 percent of the indigo imported into Britain was from India. By 1810, the proportion had gone up to 95 percent. As the indigo trade grew, commercial agents and officials of the Company began investing in indigo production. Over the years, many Company officials left their jobs to look after their indigo business.

8. How was Indigo Cultivated?

There were two main systems of indigo cultivation: Nij and Ryoti.

• Nij Cultivation: 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 laborers. However, it was difficult for planters to expand the area under Nij cultivation because indigo could be cultivated only on fertile lands, and these were already densely populated.
• Ryoti Cultivation: Under the Ryoti system, the planters forced the ryots to sign a contract, an agreement (satta). At times they pressurized the village headmen to sign the contract on behalf of the ryots. Those who signed the contract got cash advances from the planters at low rates of interest to produce indigo. But the loan committed the ryot to cultivating indigo on at least 25 percent of the area under his holding. When the crop was delivered to the planter after harvest, a new loan was given to the ryot, and the cycle started all over again.

The system was cyclical and exhausting. The price the peasants got for the indigo they produced was very low and the cycle of loans never ended. Moreover, the planters usually insisted that indigo be cultivated on the best soils in which peasants preferred to cultivate rice. Indigo, moreover, had deep roots and it exhausted the soil rapidly. After an indigo harvest, the land could not be sown with rice.

9. The "Blue Rebellion" and After

In March 1859, thousands of ryots in Bengal refused to grow indigo. As the rebellion spread, ryots refused to pay rents to the planters and attacked indigo factories. Those who worked for the planters were socially boycotted, and the gomasthas (agents of planters) who came to collect rent were beaten up. The ryots swore they would no longer take advances to sow indigo nor be bullied by the planters' lathiyals (strongmen).

The rebellion was unique because it had the support of many local zamindars and village headmen who had grown tired of the power of the planters. After the Revolt of 1857, the British government was particularly worried about the possibility of another popular uprising. When the news spread of a simmering revolt in the indigo districts, the Lieutenant Governor toured the region in the winter of 1859. The government set up the Indigo Commission to inquire into the system of indigo production. The Commission held the planters guilty and criticized them for the coercive methods they used with indigo cultivators. It declared that indigo production was not profitable for ryots. The Commission asked the ryots to fulfill their existing contracts but also told them that they could refuse to produce indigo in the future.

After the revolt, indigo production collapsed in Bengal. But the planters now shifted their operation to Bihar. When Mahatma Gandhi returned from South Africa, a peasant from Bihar persuaded him to visit Champaran and see the plight of the indigo cultivators there. Mahatma Gandhi’s visit in 1917 marked the beginning of the Champaran movement against the indigo planters.

Summary & Key Takeaways

• Diwani Rights: The Company became the financial administrator of Bengal in 1765, leading to a focus on revenue extraction.
• Permanent Settlement (1793): Introduced by Lord Cornwallis; revenue was fixed, and Zamindars were made responsible for collection. It failed to improve land and oppressed peasants.
• Mahalwari System: Revenue was settled with the village (Mahal) as a unit; demand was periodically revised.
• Ryotwari System: Developed by Thomas Munro in South India; revenue was settled directly with the cultivators (Ryots).
• Indigo Cultivation: Driven by British industrial demand; involved the Nij and Ryoti systems, both of which were exploitative.
• Blue Rebellion (1859): A massive peasant uprising in Bengal against indigo planters, leading to the collapse of indigo cultivation in the region.
• Legacy: The struggles of the countryside under British rule eventually led to nationalist movements, such as the Champaran Satyagraha.