Grant of Diwani

The East India Company was made the Diwan of Bengal on 12 August 1765; by then Mughal Emperor Shah Alam II. Thus, the Company became of the chief financial administrator of the territory of Bengal.

The Company officials understood one important aspect of expanding their base in India. They understood the importance of those who had ruled the countryside in the past, and had enjoyed authority and prestige. The Company wanted to be careful not to annoy those people.

Growth of Revenue: Initially, the Company was just interested in collecting revenue so that its trade and other expenses could be financed. But the Company was not interested in setting up any regular system of assessment and collection. The revenue was enough to double the purchase by Company within five years.

Growth of problems for common people: But the Bengal economy was facing a deep crisis. Artisans were being forced to sell their goods to the Company at low prices and hence most of them were deserting their villages. Peasants were not able to pay the dues. Production by artisans declined and farm production also declined. In 1770, a terrible famine hit Bengal. It killed 10 million people.

Permanent Settlement

The Company had to take some steps to improve agriculture by improving investment in land. The Permanent Settlement was introduced in 1793. According to this, the rajas and taluqdars were recognized as zamindars and were given the responsibility of revenue collection from the peasants. The amount to be paid was fixed permanently and hence the name Permanent Settlement. The Company officials felt that it would ensure a regular flow of revenue. They also felt that this would motivate the zamindars to invest in improving the land. The zamindars would benefit from increased production because the revenue demand would not be increased.

The Problem of Permanent Settlement

The revenue was fixed at such a high level that the zamindars found it difficult to pay. A zamindar who failed to pay the revenue lost his zamindari. Hence, zamindars were not investing in the improvement of land.
But the situation changed by the first decade of the nineteenth century. There was price rise and expansion in cultivation. The income of the zamindars increased but it did not result in any gain for the Company because of fixed revenue demand.
The zamindars preferred to earn as much profit as they could and seldom bothered about investing in land. They were just happy to lease out the land to tenants.

The system was extremely oppressive for the cultivator. He had to pay a high rent to the zamindar but there was no security of his right on the land. Cultivator often had to take loan from the moneylender, to pay rent. Failure of payment of the rental meant eviction for the cultivator from the land.

Mahalwari Settlement

By the early nineteenth century, the Company officials were planning to change the revenue system. A new system was devised Holt Mackenzie. Mackenzie was convinced about the importance of village in the north Indian society. He wanted to preserve this important social institution. He sent collectors to different villages to take a survey. Data regarding land size and type and customs and rights of different groups were collected. The revenue estimation was done for each village. The village was known as mahal and hence this system was known as Mahalwari System. It was also decided to revise the revenue demand periodically. The village headman was given the responsibility of revenue collection. This system was first implemented in the villages of the North Western Provinces of the Bengal Presidency. Most of this area now comes under Uttar Pradesh.

The Munro System

This system was also known as the ryotwari system. It was first tried on a small scale by Captain Alexander Read. He tried it in some of those areas which were taken over after the defeat of Tipu Sultan. This system was subsequently developed by Thomas Munro. This system was gradually implemented all over south India.

There were no traditional zamindars in the south. Hence, the settlement had to be directly made with the cultivators (ryot). The ryots had been tilling the land for generations. Their fields were carefully surveyed to make the revenue assessment.

Problems of Excessive Revenue Demand

The revenue officials wanted to increase the income from land. Hence, they fixed very high revenue demand. Peasants were not able to pay the revenue. The ryots fled the countryside and villages became deserted in many regions.

Crops for Europe: By the late eighteenth century, the Company was also trying to expand the cultivation of opium and indigo. In the subsequent 150 years, the British also persuaded or forced the cultivators to produce other crops; like jute, tea, sugarcane, cotton, wheat and rice; to be supplied to Europe.

Match the following:

Answer:

Fill in the blanks:

1. The British conquest of Bengal began with the Battle of …………
2. Haider Ali and Tipu Sultan were the rulers of …………..
3. Dalhousie implemented the Doctrine of ……………
4. Maratha kingdoms were located mainly in the part of …………… India.

Answer:

1. Plassey
2. Mysore
3. Lapse
4. Western

State whether true or false:

1. The Mughal empire became stronger in the eighteenth century.
2. The English East India Company was the only European company that traded with India.
3. Maharaja Ranjit Singh was the ruler of Punjab.
4. The British did not introduce administrative changes in the territories they conquered.

Answer:

1. False
2. False
3. True
4. False

Question : What attracted European trading companies to India?
Answer:

1. The fine qualities of cotton and silk produced in India.
2. Indian spices such as pepper, cloves, cardamom, and cinnamon.

Question . What were the areas of conflict between the Bengal Nawabs and the East India Company?
Answer:

1. The Bengal nawabs asserted their power and autonomy and refused to grant the Company concessions,
2. They demanded large tributes for the Company’s right to trade,
3. They denied the Company any right to mint coins,
4. They stopped the Company from extending its fortifications
5. Accusing the Company of deceit, they claimed that the Company was depriving the Bengal government of huge amounts of revenue and undermining the authority of the nawab. It was refusing to pay taxes, writing disrespectful letters, and trying to humiliate the nawab and his officials. These were the areas of conflict between the Bengal Nawabs and the East India Company.

Question .How did the assumption of Diwani benefit the East India Company?
Answer:
The Mughal emperor, in 1765, appointed the Company’s the Diwan of the provinces of Bengal. The Diwani allowed the Company to exploit the vast revenue resources of Bengal. This solved a major problem that the company had earlier faced. Although its trade had expanded, it had to buy most of the goods in India with gold and silver imported from Britain. The overflow of gold from Britain stopped after the assumption of Diwani. Now revenue from India could finance Company expenses. These revenues they used to purchase cotton and silk textiles in India, maintain Company troops and meet the cost of building the Company fort and offices at Calcutta.

Question . Explain the system of ‘subsidiary alliance’.
Answer:
Under the system of ‘subsidiary alliance’, Indian rulers were not allowed to have their independent armed forces. They were to be protected by the Company, but had to pay for the ‘subsidiary forces’ that the Company was supposed to maintain for the purpose of this protection. If the Indian rulers failed to make the payment, the part of their territory was taken away as penalty. The states which had to lose their territories on this ground were Awadh and Hyderabad.

Question .In what way was the administration of the Company different from that of Indian rulers?
Answer:
The administration of the Company was different from that of the Indian rulers in the following ways:

1. The Company divided its administrative units called Presidencies. There were three Presidencies –  Bengal, Madras and Bombay. In India, districts were the main administrative units.
2. Each presidency was ruled by a Governor. Districts were ruled by the Collectors.
3. The supreme head of the administration of the Company was the Governor-General. But in India, the head of the administration was the king. .
4. The main job of the Governor-General was to introduce administrative reforms while the main job of the Collector was to collect revenue and taxes- and maintain law and order in his district.

Question. Describe the changes that occurred in the composition of the Company’s army.
Answer:
Several changes occurred in the composition of the Company’s army:

1. The Company began recruitment for its own army, which came to be known as the sepoy army.
2. As the warfare technology changed from the 1820s, the cavalry recruitments of the Company’s army declined.
3. The soldiers of the Company’s army had to keep pace with changing military requirements and its infantry regiments now became more important.
4. In the early 19th century the Birtish began to develop a uniform military culture. Soldiers were increasingly subjected to European style training, drill and discipline that regulated Their life for more than before.

Question .After the British conquest of Bengal, Calcutta -grew from a small village to a big city. Find out about the culture, architecture and the life of Europeans and Indians of the city during the colonial period.
Answer:
Hints: Visit school library or get information from internet.
Indians were influenced by the British culture, architecture and life style.

1. Culture : British influence began.
2. Architecture : Influenced by the British Architecture (fortification of the city, churches etc.). Rich Indians started constructing bunglows in English style.
3. Life: English education, English clothes, became to be popular.