Chapter 3: Ruling the Countryside

Diwani of Bengal: On 12 August 1765, the East India Company was appointed as the Diwan (chief financial administrator) of Bengal by the Mughal emperor. This gave the Company control over Bengal’s finances and revenue collection.
Administrative Challenges: The Company needed to manage Bengal's land and revenue to finance its trading activities and meet increasing expenses.
Adjusting Local Power: The Company realized it needed to be cautious with local leaders, respecting their authority to prevent uprisings while slowly gaining control.

Trade and Revenue Goals: As Diwan, the Company aimed to maximize revenue collection to fund its trading needs, particularly to buy fine cotton and silk cheaply.
Economic Decline: The Company’s heavy revenue demands led to economic hardships. Artisans abandoned their villages due to low wages, and agricultural productivity suffered.
The Bengal Famine (1770): A severe famine struck Bengal in 1770, killing around ten million people, about a third of Bengal's population. This was partly due to the declining agricultural economy under Company rule.

Revenue Stability: The Company realized that the agricultural crisis threatened its revenue stability, prompting it to seek ways to improve farming practices.
Permanent Settlement (1793): The Permanent Settlement was introduced, appointing zamindars (landowners) to collect taxes from peasants. Revenue amounts were fixed permanently to encourage investment in land improvement.

High Revenue Targets: The fixed revenue was so high that many zamindars couldn’t pay it, resulting in their zamindaris being auctioned off.
Zamindars’ Lack of Interest: As the state couldn’t increase revenue over time, zamindars had no incentive to improve land productivity, leading to further stagnation in agriculture.

Mahalwari Settlement (1822): Introduced by Holt Mackenzie, this system divided villages into mahals (groups of villages). Revenue was periodically revised, and the responsibility for collection was given to village headmen instead of zamindars.
Munro System/Ryotwari (South India): Created by Thomas Munro, this system dealt directly with individual cultivators (ryots) in South India, who paid taxes directly to the British, without the need for zamindars.

Growing Cash Crops: The British aimed to turn Indian agriculture towards cash crops like opium, indigo, jute, tea, and cotton, which were highly demanded in Europe.
Indigo Cultivation: Indigo, which provided a rich blue dye, was in high demand in Europe. Bengal became a major center for indigo production.

Nij Cultivation: Planters grew indigo on land they directly controlled. However, this required a lot of land and labor, making it challenging to expand.
Ryoti Cultivation: The British forced local farmers (ryots) to grow indigo on their land by signing contracts. The ryots were often given loans but had to dedicate a part of their land to indigo, leading to a cycle of debt.

Rebellion Against Indigo (1859): Farmers in Bengal revolted against forced indigo cultivation, refusing to plant the crop, attacking factories, and socially boycotting planters.
Support from Zamindars and Headmen: The rebellion gained momentum as local leaders and zamindars supported the ryots against the British.
Government Intervention: The Indigo Commission was set up to investigate the system and later allowed ryots to refuse indigo planting, leading to the decline of indigo cultivation in Bengal.

The policies enforced by the British, like forced indigo farming, high revenue demands, and strict administrative controls, led to significant distress in the countryside. Over time, these harsh conditions fueled resistance, laying the groundwork for broader uprisings against British rule.