The Maratha Fiscal and Financial System | History Optional for UPSC (Notes) PDF Download

Land Revenue

Influence of Malik Ambar:

• The revenue system during Shivaji's reign was influenced by Malik Ambar's system.
• A new revenue assessment was carried out by Annaji Datto in 1679.

Supervision of Mirasdars:

• Shivaji closely monitored the mirasdars, who had hereditary rights to the land.
• According to 18th-century writer Sabhasad, these sections paid only a small portion of their collections to the government.
• As a result, the mirasdars became powerful, building bastions, castles, and strongholds in the villages and hiring footmen and musketeers, leading to unrest and seizing of land.

Shivaji's Actions:

• Shivaji responded by destroying their bastions and forcing them to submit.

Mokasa, jagir and saranjams

• Mokasa, jagir, and saranjam were often used interchangeably in Maratha territory.
• Jagirs were more permanent than mokasas.
• Saranjams were divided into jat(personal pay) and fauj(troop maintenance), similar to Mughal ranks.
• Revenues assigned to mokasas were deducted after sardeshmukhi, chauth, and batai.
• Shivaji initially discontinued granting mokasas and saranjams, preferring cash payments to officials.
• After Shivaji's death, Raja Ram revived the practice of granting mokasas.
• Inam lands were revenue-free assignments given to pious, needy, and scholars.
• Watan and inam were used interchangeably, with watan having no obligations.
• Watan tenures were held by village officials and were hereditary as long as duties were performed.
• Inam lands were not entirely tax-free, requiring a portion of revenue to be paid to the state.
• Diwan nisbat inam was granted by the state, while gao nisbat inam was granted by the village community.
• Dehangi-inam was granted to village artisans and servants.
• Land revenue was the main source of income for the Peshwas.
• Shivaji preferred a share of actual produce, while the Peshwa preferred long-term land grants with fixed state demands.
• Madhav Rao II encouraged cultivation of waste and rocky land by offering inam and rent-free concessions.
• Tagai loans were granted to protect cultivators from money-lenders.
• The revenue system aimed at taxpayer security, but was disrupted by Baji Rao II's system of revenue-farming.

Chauth and Sardeshmukhi 

• Chauth and Sardeshmukhi were tax systems employed by Shivaji and later Maratha rulers to extract wealth from enemy territories.
• These taxes were typically collected in regions neighboring the Maratha Kingdom, such as the Mughal Empire and the Deccan Sultanates.

Chauth

• Chauth has a long history. The Koli Rajas of Ramnagar (in Konkan) were collecting chauth from the Portuguese long before Shivaji imposed it. This is why the Portuguese referred to the Koli Rajas as "chauthia Raja."
• The first recorded instance of Shivaji demanding chauth was after he conquered Ramnagar and subdued the Kolis. He then requested the same chauth from the Portuguese, who resisted this demand, leading to a conflict between them.
• Over time, the Marathas began to impose chauth regularly, even on Mughal territories where they had claims or indirect control.
• Shivaji demanded tribute from the subjects of his enemies, roughly equivalent to one-fourth of the estimated revenue of the province, to spare them from his army's harassment. He would capture wealthy individuals from enemy territories and force them to agree to these ransoms.
• It is estimated that Shivaji's income from chauth alone was around 90 lakh hons.

Sardeshmukhi

• Shivaji imposed the sardeshmukh in his own dominion (swaraj) based on his claim as the hereditary sardeshmukh or head-man of all Maharashtra. Unlike chauth, which was more of a concession, sardeshmukh was claimed by Shivaji as a matter of right.
• The sardeshmukh was justified on the grounds that, as the hereditary head-man, Shivaji was entitled to compensation for protecting the welfare of the people in the state. This was more of a legal fiction, as it was collected from areas that also paid chauth.
• Sardeshmukh and chauth should not be confused with the spoils of war. Sardeshmukh was set at 10 percent of the total revenue realized and was determined alongside jamabandi.
• Historian Sabhasad(Krishnaji Anant) estimated that the income from sardeshmukh alone during Shivaji’s reign was around 1 crore hons.

Debate about Chauth

• During the Peshwa era, the Marathas secured the Mughal emperor's approval to collect chauth and sardeshmukhi from the Deccan's six subahs. In return, they committed to providing the Mughal government with 15,000 horses and a nominal fee. This arrangement gradually wore down enemy resources and allowed the Marathas to expand their territory.
• Maratha historian Ranade argues that chauth was not merely a military contribution but a payment for protection against foreign invasion. He compares it to Wellesley’s subsidiary system, where a native state would maintain a British force for protection against external threats and internal unrest.
• In Shivaji's system, there was an implicit agreement to protect states paying chauth from foreign aggression. However, he could not fully implement this protection. The British subsidiary system had more comprehensive control over the parties involved compared to the Maratha system.
• Historian Sardesai views chauth as a tribute from hostile or conquered regions. Surendra Nath Sen sees it as a military contribution justified by circumstances, while Jadunath Sarkar believes it merely spared a place from Maratha presence without imposing a duty to protect it.
• According to Sarkar, Marathas were more concerned with their immediate gains rather than the long-term fate of the territories they targeted. Chauth was a means to fend off the Marathas, not a system for maintaining peace against all threats.
• In the times of Shahu and his successors, local chiefs who collected chauth and sardeshmukhi independently were not bound to follow royal orders or account for the funds raised. This was partly because the king showed little interest in operations far from his center.
• Historians Dighe and Qanungo argue that during the Peshwa period, chauth and sardeshmukhi contributed to the rise of feudalism, which Shivaji had originally sought to abolish.

Other sources

• Forests: Revenue was generated by selling permits for cutting timber, as well as selling forest products like grass, bamboos, wood, and wild honey.
• Customs and Excise Duties: Duties were collected on various goods.
• Mints: Licenses for private mints were granted to approved goldsmiths, who had to pay royalties to the state.

Types of Taxes Imposed:

• Tax on Irrigated Land: Levied on land irrigated from wells.
• House Tax: Charged to everyone except Brahmins and village officers.
• Annual Fee for Weights and Measures Testing: Applied to ensure accuracy in weights and measures.
• Tax on Marriage: Imposed on marriages, including the remarriage of widows.
• Tax on Livestock: Levied on sheep and she-buffaloes.
• Pasturage Fee: Charged for the use of pasture land.
• Tax on Melon Cultivation: Applied to melons grown on river beds.
• Succession Duty: Tax on inheritance.
• Town Duty: Levied on towns.