As British rule expanded from Bengal to other parts of India, new systems of revenue were imposed. The Permanent Settlement was rarely extended to any region beyond Bengal. Since the revenue demand was fixed under the Permanent Settlement, the colonial state could not claim any share of this enhanced income. Keen on expanding its financial resources, the colonial government had to think of ways to maximise its land revenue. So in territories annexed in the nineteenth century, temporary revenue settlements were made. The revenue system that was introduced in the Bombay Deccan came to be known as the
ryotwari settlement
. Unlike the Bengal system, the revenue was directly settled with the ryot. The average income from different types of soil was estimated, the revenue-paying capacity of the ryot was assessed and a proportion of it fixed as the share of the state.
First revenue settlement in 1820
The first revenue settlement in the Bombay Deccan was made in the 1820s. The revenue that was demanded was so high that in many places peasants deserted their villages and migrated to new regions. In areas of poor soil and fluctuating rainfall the problem was particularly acute. When rains failed and harvests were poor, peasants found it impossible to pay the revenue. By the 1830s the problem became more severe. Prices of agricultural products fell sharply after 1832 and did not recover for over a decade and a half. This meant a further decline in peasants’ income. At the same time the countryside was devastated by a famine that struck in the years 1832-34. Onethird of the cattle of the Deccan were killed, and half the human population died. Those who survived had no agricultural stocks to see them through the crisis.
Inevitably, they borrowed. Revenue could rarely be paid without a loan from a moneylender. But once a loan was taken, the ryot found it difficult to pay it back. As debt mounted, and loans remained unpaid, peasants’ dependence on moneylenders increased. They now needed loans even to buy their everyday needs and meet their production expenditure. By the 1840s, officials were finding evidence of alarming levels of peasant indebtedness everywhere.
Cotton Boom
Before the 1860s, three-fourths of raw cotton imports into Britain came from America. British cotton manufacturers had for long been worried about this dependence on American supplies. When the American Civil War broke out in 1861, a wave of panic spread through cotton circles in Britain. Raw cotton imports from America fell to less than three per cent of the normal. Frantic messages were sent to India and elsewhere to increase cotton exports to Britain. In Bombay, cotton merchants visited the cotton districts to assess supplies and encourage cultivation. As cotton prices soared, export merchants in Bombay were keen to secure as much cotton as possible to meet the British demand. So they gave advances to urban sahukars who in turn extended credit to those rural moneylenders who promised to secure the produce. The ryots in the Deccan villages suddenly found access to seemingly limitless credit. They were being given Rs 100 as advance for every acre they planted with cotton. Sahukars were more than willing to extend long-term loans. Between 1860 and 1864 cotton acreage doubled. By 1862 over 90 per cent of cotton imports into
Britain were coming from India.
Crisis Again
As the Civil War ended in 1865, cotton production in America revived and Indian cotton exports to Britain steadily declined. Export merchants and sahukars in Maharashtra were no longer keen on extending long-term credit. They could see the demand for Indian cotton fall and cotton prices slide downwards. While credit dried up, the revenue demand increased. The first revenue settlement was in the 1820s and 1830s. Now it was time for the next. And in the new settlement, the demand was increased dramatically: from 50 to 100 per cent. Yet again farmers had to turn to the moneylender. But the moneylender now refused loans. He no longer had confidence in the ryots capacity to repay.
The refusal of moneylenders to extend loans enraged the ryots. What infuriated them was not simply that they had got deeper and deeper into debt, or that they were utterly dependent on the moneylender for survival, but that moneylenders were being insensitive to their plight. The moneylenders were violating the customary norms of the countryside. In one of the many cases investigated by the Deccan Riots Commission, the moneylender had charged over Rs 2,000 as interest
on a loan of Rs 100.
Deccan Riots of 1875
Through the nineteenth century, peasants in various parts of India rose in revolt against moneylenders and grain dealers. One such revolt occurred in 1875 in the Deccan. The movement began at Supa, a large village in Poona district. It was a market centre where many shopkeepers and moneylenders lived. In 1875, ryots from surrounding rural areas gathered and attacked the shopkeepers, demanding their account books and debt bonds. They burnt account books, looted grain shops, and in some cases set fire to the houses of sahukars (persons who acted as both a moneylender and a trader). From Poona the revolt spread to Ahmednagar. Then over the next two months it spread even further, over an area of 6,500 square km. More than thirty villages were affected.
As the revolt spread, British officials saw the spectre of 1857. Police posts were established in villages to frighten rebellious peasants into submission. Troops were quickly called in and many convicted. But it took several months to bring the countryside under control.
Deccan Riots Commission
When the revolt spread in the Deccan, the Government of Bombay was initially unwilling to see it as anything serious. But the Government of India, worried by the memory of 1857, pressurised the Government of Bombay to set up a commission of enquiry to investigate into the causes of the riots. The commission produced a report that was presented to the British Parliament in 1878.
1765 English East India Company acquires Diwani of Bengal
1773 Regulating Act passed by the British Parliament to regulate the activities of the ETC
1793 Permanent Settlement in Bengal
1800s Santhals begin to come to the Rajmahal hills and settle there
1818 First revenue settlement in the Bombay Deccan
1820s Agricultural prices begin to fall
1840s-50s A slow process of agrarian expansion in the Bombay Deccan
1855-56 Santhal rebellion
1861 Cotton boom begins
1875 Ryots in Deccan villages rebel
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