PRE-BRITISH INDIAN

ECONOMY

Md. Abdullah Shihab

Content
• 1. Ancient Civilization and Empires
• 2. Socio Economic Structure of Pre British Period
• 3. Pre British Economy-Agriculture
• A) Agricultural Productivity and land relations
• B) Land Tenure System In Pre-mughal And Mughal Period
• C)The Zamindars in the Bengal
• D) The Village Community
• E) The Peasant and the Ownership of Land
• F) Land Relations In Eastern India (Bengal)
• G) Prices and Wages during the Pre-British Period
4. Conditions of Transport and Trade during the Pre-British Period
5. Towns During Pre-British Period
6. Handicrafts Industry
1.1 Ancient Civilization and Empires
-Indus Valley Civilization
• Also known as the Harappan civilisation
• First Known Civilization(3300BC to 1700 B)
• Indus Valley is based around river Indus in
modern day Pakistan and northern and western
India.
• Agriculture is the main occupation, besides
barbers, carpenters, ayurvedic
• Irrigation System
• Barter System
1.2 Ancient Civilization and Empires
-Maurya Empire( 321 BC to 185 BC)
• Founded by Chandragupta Maurya
• First time India was united under one ruler
• Reduce the risk associated with transportation of goods
• “ ARTHASHASTRA”; Ancient Indian Sanskrit treatise on
statecraft, political science, economic policy and military
strategy by Chanakya
• Chandragupta Maurya established a single currency across
India, and a network of regional governors and administrators
1.3 Ancient Civilization and Empires
-Medieval History( 700 E to 1857 CE)
• Muhammed bin Quasim : In 712 CE the Muslim general
Muhammed bin Quasim conquered northern India, establishing
himself in the region of modern-day Pakistan.
• Mahmud of Ghazni : Between 1000 and 1026,
he invaded India at least 17 times. He led the first major
Muslim army to invade India. His conquest of the
entire Punjab including Haryana all the way up to Agra was the
last invasion.
• Mu'izz ad-Din Muhammad Ghori (1175-1206):Mu'izz ad-
Din was one of greatest ruler of the Ghurid dynasty. He is also
known as founder of Muslim rule in India subcontinent. He
ruled over a large part of subcontinent, which is now part
of Afghanistan, Bangladesh, Iran,
north India, Pakistan, Tajikistan and Turkmenistan.
 1.4 Ancient Civilization and Empires
-Mughal Dynasty Timeline
Emperor Reign Description

Babur 1526–1530 Founder of the Mughal Empire after his victories at the Battle of
Panipat (1526)

Humyun I- 1530–1540 Babur is succeeded by his son Humāyūn, but Humāyūn loses control of the
II – 1555– empire to Afghan rebels in 1540. He regains his throne in 1555 but dies
1556 from a fall the next year

Akbar 1556–1605 was one of the youngest rulers. Became a ruler at the age of 13. One of his
most famous construction marvels was the Lahore Fort. He abolished Jizyah
tax imposed on Hindus.

Jahangir 1605–1627 Opened relations with the British East India Company.

Shah Jahan 1628–1658 He constructed the Taj Mahal, Jama Masjid, Red Fort, Jahangir mausoleum,
and Shalimar Gardens in Lahore. Died in the captivity of his son Aurangzeb.

Aurangzeb 1658–1707 He captured the diamond mines of the Sultanate of Golconda and spent the
major part of his last 27 years in the war with the Maratha rebels and
expanded the empire to its greatest extent.
2. Socio Economic Structure of Pre
British Period
1) VILLAGE COMMUNITIES:
• Asiatic Society/ Feudalism from above / Feudalism from below:
“A Contribution to the Critique of Political Economy”; by Karl Marx
• isolated and self-sufficient socio- economic units. Villages were self
sufficient entities
• population derived their livelihood from land
• Rents paid by the cultivators to the landlord were customary
• There was limited scope for the division of labor, because of the
demand for their product was fixed and limited within village.
• absence of competition, so the products were stereotyped and
determined by customs.
• A barter economy prevailed in villages. The use of money was very
rare
2. Socio Economic Structure of Pre
British Period Cont.
2) Village administration:
• villages had their own administrative units.
• The village administration was looked after by the organization
of council of elders, i.e. village panchayat. These panchayats
consisted of five or more members. Village panchayat had to
perform various functions such as, maintenance of peace and
order, collection of revenue, keeping of accounts, police duties
etc.
• Potel: Head; Karnom: Estimate the crops; Toiler: Give
Assistance for transportation ; Totti: Guard the Crop;
Shimanadar: Look after the irrigation system
2. Socio Economic Structure of Pre
British Period Cont.
3) Occupational structure of village:
• It consisted of agriculturists, village artisans, village officers
and menials. Agricultural cultivation was mainly for
consumption and very little was kept for market.
• Each village had its own artisans and menials Local carpenters
made their ploughs. Blacksmith made shears, potters made
utensils, and weavers made cotton clothing, so also the washer
men, barbers had their jobs.
• Barter System between farmers and others
3. Pre British Economy-Agriculture
-A) Agricultural Productivity and land relations
• Peasants in Mogul India cultivated their own separate fields
with agricultural practices.
• They used wooden ploughs, manures, seeds and artificial
irrigation to supplement rain. Wells and tanks were the main
sources of the irrigation.
• An important feature of Indian agriculture was large number of
food and non-food crops raised by the Indian peasant. The
seventeenth century saw the introduction of two major crops,
tobacco and maize and variety of edible fruits brought by the
Moguls and Portuguese.
• There was substantial increase in the production of indigo,
mulberry, poppy and sugarcane during seventeenth and early
eighteenth centuries. The average productivity of land was
higher in pre-British period as compared to the productivity in
1900, which was due to the greater availability of land.
3. Pre British Economy-Agriculture
-A) Agricultural Productivity and land relations Cont
• It is important to note that land during this period was highly
stratified. On one hand, there were big peasants, who carried
out cultivation on its own management.
• They employed laborers for various cultivation activities for
which they paid them wages, while on the other hand small
peasants who engaged in cultivation but depended upon
borrowing for subsistence and food, seed and cattle.
• Though size of agricultural product and per capita product in
the Mughal India was better, the growth rate of agriculture was
slow. This was due to heavy dependence on monsoon and
defective land revenue system.
3. Pre British Economy-Agriculture
B) LAND TENURE SYSTEM IN PRE-MUGHAL
PERIOD
The question of ownership in land has been discussed by economic
historians and their conclusions are largely confined to two options:
1. The state ownership
2. The peasant ownership
Peasant who reclaimed and converted the forest into arable land became
the proprietor of that land. The king did not have any property right in
land except the right to a share of the produce in return for „affording
protection to his subjects‟. However, D. N. Jha argues that an individual
proprietor exercised only a qualified ownership over his land, the king
being its ultimate lord.
On the other hand, Irfan Habib accepts the existence of private property
in land but at the same time notes that peasant did not have the right to
free alienation of land. But most scholars agree that the peasants held
permanent and heritable occupancy rights in land and the king was not
expected to evict them.
3. Pre British Economy-Agriculture
B) Land Tenure System In Mughal Period
1)Land Revenue System:
• The simplest form of land revenue was crop sharing. During
Akbar‟s time, on the basis of detailed information collected for
the period of ten years on yields, prices, and areas cultivated
for each locality, the revenue rates were fixed directly in cash
for each crop.
3. Pre British Economy-Agriculture
B) LAND TENURE SYSTEM IN MUGHAL
PERIOD Cont
Intermediaries and Land Rights
• Theoretically the king was the sole claimant to the land
revenue. But, as a matter of fact, the assessment and collection
of the revenue was largely through the members of a small
ruling class. Large areas of cultivated land were given to them
revenue- free; and where revenue was levied on their land it
was often at substantially lower rates.
3. Pre British Economy-Agriculture
C) The Zamindars:

• The Zamindars:

1. The Zamindar is a Persian term which means holder of land

(zamin). The frequent use of this term began from Akbar‟s time
onwards for any person with any hereditary claim to a direct share
in the peasant‟s produce. The basic right of Zamindar was his
claim to impose certain levies on the peasants over and above the
land-revenue assessment.
2. Irfan Habib also refers to other cesses and perquisites of
Zamindars such as house tax and levies on forest and water
produce, since these are specified among the rights transferred in
zamindari sale deeds.
3. Pre British Economy-Agriculture
C) The Zamindars Cont:
3. In a large part of the Mughal empire, the Zamindar was expected to
collect the tax from the primary cultivators.
4. The zamindars often claimed to derive their rights from settling a
village and distributing its lands among the peasantry. Theoretically,
they also had the right to evict peasants, but land being more abundant
than labour in practice the right to evict the peasant had much less
significance.
5. In Irfan Habib‟s opinion the zamindari right was in itself an article of
property. It was inherited according to the same laws and customs as
governed the inheritance of other property. Zamindari right was also
freely sold. Some zamindaris were actually mortgaged to professional
money lenders.
6. Zamindar and peasant-held villages were found side by side in the
same district in Mughal empire. Even sometime in a peasant village,
Mughal administration created new zamindaris. During the decline of
Mughal empire, zamindari rights was created even by force
3. Pre British Economy-Agriculture
C) The Zamindars Cont:
• Rise of Jamindars and Agrarian Bureaucracy:
For the land abundance, farmers can cultivate as
much land as they want, subject to condition of
certain level of tax.
But overtime, as population grew, without agrarian
bureaucracy, distribution of land can not be
controlled.
So emerge competition within the farmers.
 3. Pre British Economy-Agriculture
C) The Zamindars Cont:
Bengal's first Nawab
• Murshid Quli Khan, was Bengal's first Nawab, reigning from 1717 until
1727. Murshid Quli Khan was appointed Dewan of Bengal in 1700 by
Aurangzeb and reigned until his death in 1727.
• 1717, Farrukhsiyar bestowed the title of Zafar Khan on Quli Khan and
appointed him Subahdar of Bengal, making him the first person to hold
both the rank of subahdar and diwan at the same time.
• Quli Khan replaced the Mughal jagirdari system with the mal
jasmani system. He took security bonds from the contractors
or ijardaars who later collected the land revenue, who later came to be
known as zaminars.
• There were 16 zamindars , the controlled 615 porghonahs.
3. Pre British Economy-Agriculture
D) The Village Community:

1. A notable feature of village life in pre-British period was the

combination of agricultural work with manufacturing processes
with an unalterable division of labour. Production was mainly for
direct use and the surplus after payment of revenue was marketed.
2. Villagers normally decided collectively, every peasant paid his
share for common financial pool from which the land-revenue, the
demands of officials, the repayment of any common loan
(specially raised during natural calamities
3. Views also differ over the homogeneous nature of peasantry.
Economic differentiation within the peasantry had emerged during
the Mughal period.
4. The basic units of revenue assessment and collection being a
village, it was natural for the revenue authorities to rely upon the
headmen or a small group of upper peasants. This dominant group
fixed tax rates for each peasant, collected it, and put it in a pool.
3. Pre British Economy- Agriculture
E) The Peasant and the Ownership of Land
The Peasant and the Ownership of Land:
• who was the landowner?
• British administrators addressed to themselves. In fact in the years
preceding the Permanent Settlement in Bengal, the English
circulated some questionnaires with a view to eliciting „official‟
opinion concerning various land rights. The question most often
asked was “who is the owner of the land- the ruler (hakim) or the
zamindar?” It will be noticed that the question as formulated
excluded the peasants from consideration altogether
• most of the scholars today agree with the view that king was not the
owner. Numerous Mughal government documents refer to private
persons as owners (maliks), holding malkiyat or ownership of land.
3. Pre British Economy- Agriculture
E) The Peasant and the Ownership of Land Cont:
• There was no question of really free alienation, which is
an essential feature of modern proprietary right.
• Land was abundant and peasants scarce. Sale of land
might also not be possible because there was no scarcity
of land and the revenue burden was quite heavy. The
peasant, in such a situation, might not often succeed in
finding buyers. The peasants thus enjoyed the permanent
and hereditary right of occupancy but did not possess the
right of free alienation.
3. Pre British Economy-Agriculture
F) LAND RELATIONS IN EASTERN INDIA
(Bengal):
1. The revenue system in force here was the one known as mugtai, a
fixed demand.
2. According to James Grant, initially the revenue demand fixed in
1582 by Todar Mal represented around one-fourth of the average
produce.
3. But Moreland does not agree with James Grant‟s account, specially,
his statement that the basis of assessment was one- fourth of the
produce. Moreland considers that in Todar Mal‟s time the state‟s
claim was uniformly one-third.
4. Unlike northern India, in Bengal the imposition of revenue-demand
was not upon the peasants but upon the zamindars. Bengal
zamindars were different from the zamindars in other parts of
Mughal empire. Here the zamindar was called upon to answer for
the payment of land revenue within the area of his zamindari. He
collected the land tax (or rent) from the peasant at rates fixed by
custom or by himself and paid the amount imposed upon him by the
administration. The balance left with him constituted his income.
3. Pre British Economy-Agriculture
F) LAND RELATIONS IN EASTERN INDIA
(Bengal) Cont.:
• Villages were self sufficient entities
• Surplus Production
• These extended Surplus Production either used for revenue or
moved to town.
• So that could not be used for reproduction in the village.
• Villages were remain underdeveloped over time.
3. Pre British Economy-Agriculture
G ) Prices and Wages during the Pre-British Period

• During the pre-British period, the prices of food grains used to

fluctuate widely between different places. Markets for most of
the commodities were very much restricted to local areas in the
absence of adequate means of transport and communications.
Under such a situation, agricultural produces and the other
commodities produced by artisans in the cottage industries
were not getting remunerative prices.
• During those days, the prevailing wage rates were very low.
Wages of village artisans were paid not in terms of cash but in
kind. The wages were paid mostly once in a year and that is
just after the harvesting season. The rates of wages were
mostly determined by customs and conventions.
4. Conditions of Transport and Trade
during the Pre-British Period:

• During the pre-British period, there were no proper

transportation systems in India
• In respect of water transport, it was only in some parts of
Northern India where some rivers were navigable and small
wooden country boats were used for carrying passengers as
well as freights. But in most other part of the country, bullock
carts and pack animals were considered as the standard modes
of transport.
5. TOWNS DURING PRE-
BRITISH PERIOD
• Most of the towns were non-industrial in character
• Every town had an industry but it was not the cause of its
survival. - The old towns owed their existence to
(a) Places of pilgrimage,
(b) Seats of courts or capital of province and
(C) Commercial depots.
 6. HANDICRAFTS
INDUSTRY
• Local markets: The artisans from rural areas were working to
meet the demands of local markets. They were mainly
engaged in producing the traditional crafts, pottery, carpentry
and other skills. The production was done on subsistence-basis,
and the artisans were paid in cash or kind.
• Supplementary to agriculture: The production of crafts and
other products was linked to the agriculture. For instance,
farmers produced the goods based on agriculture like silk,
indigo, oil and sugar. The production of salt and iron was also
done on the part-time basis by the peasants or farmers. Thus
the production of these goods was linked to agriculture as well
as to the industry. Similarly, the goods to be produced were
highly determined by the caste to which the craftsman
belonged.
6.HANDICRAFTS INDUSTRY
• Introduction of the factory system: As the trade activities
increased, the nature of production the methods, demand
conditions changed, a class of merchants was developed and
they started having control on the production. The merchants
supplied the finished products to the foreign traders. The
artisans were employed in a large number and were paid for
their services by the merchants.

• To meet the requirements of the court: The craftsmen and

artisans worked for royal workshops or “karkhanas” under the
control of the government. The state authorities provided the
raw material to the craftsmen and paid wages to them.
 6. HANDICRAFTS
INDUSTRY
• Highly skilled laborers: A large number of skilled laborers or
artisans were working all over the urban areas and responsible
for the production of artistic goods and luxury goods. There
was a very high amount of skilled workers who were working
independently.
• Stagnant technology: In spite of the developments in the
methods of production of the manufactured goods, the
countries like Europe and China were far ahead of India in
terms of technological progress, especially, in the use of wind
and water power, printing, metallurgy, and basic goods. It is
very difficult to find the reasons for the backwardness
6. HANDICRAFTS INDUSTRY
• Division of labour: There was a good deal of division of
labor, especially in the artistic industries. However it was not
so well-developed and modern as it is now.
• Localisation of industries: Owing to the availability of raw
materials, in case of Kashmir shawls or marbles, there was
considerable localization of industries. Similarly, proximity of
markets, skilled labor led to the concentration of the industries.
The restriction of the area of demand was most serious
limitation of the Indian handicraft industry which affected its
growth and organization.
6. HANDICRAFTS INDUSTRY
• The textile industry: The textile industry was one of the important
industries of the pre-British period. The textile handicrafts included the
manufacture of cotton, silk and woolen cloths and other varieties. The chief
centres of the textiles were towns like Agra, Delhi, Lahore, Multan,
Ahmadabad, Bharoch, Surat, Patna, Dacca etc. Many other towns were also
involved in the production of textiles such as, Sarhind, Samanah, Nasarpur,
Sehwan, Sironj, Nosarai, Shahjadpur and Agrezabad.
• The silk products: The manufacture of silk cloth was the next order of
importance. ‗chopas„, ‗ bandanas„, and ‗corahs„ of Murshidabad, Maldah
and Bengal towns; the fine floral brocadework of Banaras and Ahmedabad ;
and double weaving of colors produced at Poona, Yeola and other places
were the most important silk products.
• The woolen industry: In woolen, the important product was Kashmiri
shawls, produced in Kashmir and other towns of Punjab like Amritsar and
Ludhiana. Kashmiri shawls had a great demand all over India. By 1850 the
shawls became very much popular in Europe and France. However, it faced
many hurdles like France-German war, introduction of new techniques,
availability of cheap substitute products, leading to decline of the industry.
6. HANDICRAFTS INDUSTRY
• The metal industry: In India, the manufacture of steel and
wrought iron had high perfection almost two thousand years
ago. It is known that the iron industry not only fulfilled local
wants, but also exported the products to foreign countries. The
quality of the metal was world-wide popular
• Other small industries: Other industries like, jute, paper,
leather wood ware, bows and arrows, cord work, cutting of
precious stones, pottery, sculpturing, scents, perfumes, oils
etc., were well developed during pre-British period.
Whether there was inherent
elements of Capitalism?
• Two School of thoughts:
• 1) Palme Dutt, M N Ray etc: Economic Solvency, Private
Ownership, Revenur system of Jamindars
• 2) Irfan Habib, Shaibal Gupta:
• -Economic Solvency depended on demand of the luxurious of
Nawabs kings,
• - Lack of technology
• -Insecurity of private ownership