Impoverishment of the Rural Society under British Rule | History Optional for UPSC (Notes) PDF Download

Economic Impact of the British Raj on India's Village Economy

• The British Raj significantly disrupted India's traditional, self-sufficient village economy. The village economy was once autonomous and self-sufficient, but the British Raj gradually broke down this system.
• Improvements in transportation and communication, such as the construction of roads and railways, began to link villages with the outside world.
• After conquering India in 1818, the British established a centralized administration that weakened the independence of village governance. The British took control of village administration and other functions previously managed by village panchayats or councils. This shift reduced the autonomy of village officials, who now had to report to taluq(sub-district) and district headquarters.
• As a result of these changes, villages became more connected to the outside world. Some villagers, driven by necessity, left their homes to seek employment in emerging sectors like factories,mines,plantations, and railway construction.
• The agrarian structure of rural society in India underwent significant changes during colonial rule. Initially, the British governed rural areas through zamindars(landlords) who held some political power. The zamindars were given even greater authority and property rights under British rule.
• The British introduced various land revenue systems, including the Permanent Settlement,Ryotwari Settlement, and Mahalwari Settlement. By the mid-19th century, these systems created private property in land and conferred proprietary rights on different groups:
• The Permanent Settlement was established with zamindars.
• The Ryotwari Settlement was made with ryots or peasant proprietors.
• The Mahalwari Settlement was with the village community.
• These new revenue administration systems led landlords to prioritize revenue extraction over agricultural development. The focus shifted from improving agricultural practices to maximizing revenue collection.
• The landlords' focus on revenue extraction worsened the condition of agriculture. Peasants faced increased oppression when they failed to meet revenue demands, leading some to flee their lands.
• In some regions, peasants revolted against the oppressive conditions, and the situation was further exacerbated by famines. These grievances and the impact of the new revenue systems were evident in the series of agrarian disturbances that characterized the early period of British rule in India.

British Conquerors vs. Mughal Authorities

• The British were very different from the Mughal rulers who governed India before them. The Mughals had a long-standing rule, while the British initially came to India for trade and gradually started interfering in the country's politics and administration.
• The British government significantly disrupted the traditional socio-economic structure of Indian villages. They centralized revenue administration and commercialized agricultural products, which broke down the self-sufficient village economy and boosted trading activities.

Exploitation and the Rise of Money Lenders

• British rule was exploitative in nature and function, contributing to the rise of a money lender class that became highly influential. By the late 19th century, these money lenders became a curse for poor rural people and a major cause of growing rural indebtedness.
• The exploitation led to great resentment among the peasant class and rural society, sparking revolts against the existing system. The money lending class became a primary target of these attacks.
• Due to these upheavals, village communities began to disintegrate and decay.

New Agrarian Relations and Social Classes

• The impact of British rule led to the development of a new structure of agrarian relations that was entirely different from the previous system.
• In the 19th century, new social classes emerged, including landlords, intermediaries, and money lenders, who held significant power in this new agrarian structure.
• Agricultural laborers and sharecroppers from the lower social ranks were the most oppressed, living in deep poverty.
• The new agrarian system was a mix of feudal and colonial elements, lacking the characteristics of either the Mughal era or a purely feudal system.

Impact on Rural Society

• The impact of the British government on the Indian people was profound and long-lasting, with a more significant effect on rural people and society.
• Before colonization, Indian village communities enjoyed a balanced system of agriculture, small-scale village-based industry, and local trade, contributing to economic stability and self-sufficiency.
• However, British rule disrupted these systems, leading to detrimental effects on agriculture and the condition of the peasantry.
• Indian rural society faced long-lasting poverty, famines, and a stagnant agricultural situation as a result of these changes.

Impoverishment of Peasantry

Before British Rule in India:

• Most Indians were dependent on agriculture, which, although not technologically advanced, was self-sufficient.
• Villagers consumed or used raw materials directly, making famines and starvation rare.
• Despite crude methods, villages were autonomous and independent.

Under British Rule:

• Peasants became increasingly impoverished despite the absence of internal conflicts.
• British policies, especially by Clive and Warren Hastings, devastated Bengal, with Cornwallis noting that a third of Bengal turned into uninhabitable jungle.
• Conditions did not improve in Permanently Settled and Temporarily Settled Zamindari areas.
• Peasants were at the mercy of zamindars, facing unaffordable rents, illegal dues, and oppression.
• Ryotwari and Mahalwari areas were similarly harsh, with the government imposing excessive land revenue taxes.
• Bishop Heber noted in 1826 that the heavy taxation made it difficult for both Native and European agriculturists to thrive.
• Despite annual increases in land revenue demands, the proportion of total produce taken as land revenue decreased, especially in the 20th century.
• By the 20th century, the agrarian economy had collapsed, with landlords, moneylenders, and merchants gaining control.
• The high revenue demands were worsened by the fact that peasants received little monetary compensation for their labor.
• The government largely ignored agriculture, focusing on British-Indian administration needs and promoting British trade and industry.
• Strict collection methods for land revenue, regardless of harvest success, further harmed peasants.
• Failure to pay land tax often led to the sale of the peasant's land by the government, but many peasants preemptively sold portions of their land to meet demands.

Peasants and Moneylenders: A Struggle for Survival

• When peasants couldn't pay their land revenue, they faced eviction from their property. To avoid losing their land, many borrowed money from moneylenders at high interest rates, often mortgaging their land as collateral. This cycle of debt became difficult to escape once they were trapped in it.
• Moneylenders used deceptive practices to deepen the peasant's debt, such as false accounting and forged signatures. They would force debtors to sign for larger amounts than they had borrowed, eventually leading to the loss of their land.
• The British legal system and new revenue policies empowered moneylenders, allowing them to seize land through land transferability. Previously, moneylenders were controlled by village norms and could not charge exorbitant interest rates or seize land.
• Under British rule, the moneylender gained significant power, manipulating the legal system to their advantage and using litigation and police to serve their interests. Their literacy and cunning allowed them to exploit the peasant's ignorance of legal processes.
• Over time, moneylenders, merchants, and wealthy peasants accumulated more land, with increasing land transfers occurring in the Ryotwari and Mahalwari areas. In zamindari regions, tenants lost their rights and either were evicted or became subtenants of moneylenders.
• During famines and scarcity, land transfer accelerated as peasants, lacking savings, turned to moneylenders for not just tax payments but also basic sustenance.
• By the late 19th century, moneylenders became a significant factor in rural poverty, with total rural debt skyrocketing from Rs 300 crore in 1911 to Rs 1800 crore by 1937.
• The rising poverty and taxation drove cultivators into deeper debt, often blaming moneylenders for their plight. During the Peasant Revolt of 1857, moneylenders were among the first targets of peasant anger.
• The commercialization of agriculture further aided moneylender-turned-merchants, as peasants were forced to sell their produce quickly and at low prices to meet the demands of the government, landlords, and moneylenders.
• The peasant was at the mercy of the grain merchant, who could dictate terms and purchase his produce at a significantly lower price than the market rate. This allowed the merchant, often also the village moneylender, to gain a substantial portion of the benefits from the expanding agricultural trade.
• Due to de-industrialization and the absence of modern industry, landless peasants, along with displaced artisans and handicraftsmen, were compelled to become either tenants of moneylenders and zamindars by paying exorbitant rents or agricultural laborers at barely survivable wages.
• The peasantry was oppressed by the government, zamindars (landlords), and moneylenders. After these three took their shares, the cultivators and their families were left with very little.
• Estimates indicated that land rent and moneylenders’ interest amounted to Rs 1400 crore in 1950-51, roughly one-third of the total agricultural output for that year. This led to ongoing impoverishment of the peasantry and an increase in the frequency of famines. During times of drought or flood that caused crop failures and scarcity, millions perished.

Decline of Productivity of Agriculture

Introduction:

• During British rule in India, agriculture faced many challenges due to issues like congestion, high taxes, and the rise of landlordism.
• These problems led to low crop yields and a decline in overall agricultural production.

Congestion and Land Issues:

• Congestion in agriculture and increased subinfeudation caused land to be divided into small plots.
• Most of these small plots were unable to support their farmers due to extreme poverty.
• Poor farmers lacked the resources to improve agriculture through better methods, fertilizers, and production techniques.
• There was also no motivation for farmers to make such improvements.

Landlords and Investment:

• In countries like England, wealthy landowners invested capital to increase the productivity of their land for higher profits.
• However, in India, absentee landlords, both old and new, did not contribute positively.
• These landlords were simply rent collectors with no personal investment in the land.
• They preferred to increase their income by exploiting tenants rather than making productive investments.

Government Neglect:

• The government could have played a role in improving and modernizing agriculture but chose not to.
• The financial policy of British India placed the tax burden on the peasantry while spending very little of the revenue on their welfare.
• For example, in 1905, the British government spent over Rs. 360 crores on railways, which benefited the Empire.
• In contrast, less than Rs. 50 crores was spent on agriculture, the main revenue generator at the time.

Modernization Neglect:

• While agriculture worldwide was being modernized, Indian agriculture lagged behind in innovations.
• The tools and equipment used in farming were outdated, often over a century old.

Conclusion

• British rule in India neglected agriculture, leading to stagnation and decline.
• High taxes, poor investments, and lack of government support contributed to the challenges faced by Indian farmers.
• The period saw a failure to adopt modern agricultural practices, resulting in low productivity and widespread poverty among farmers.