Fiscal and Monetary System, Prices in Mughal India | History Optional for UPSC (Notes) PDF Download

Introduction

• Land Revenue in Mughal India: Land revenue was the main source of income for the Mughal state. However, there were other sources of income as well.
• Contemporary Sources: Contemporary sources provide detailed information about land revenue but offer only brief and sketchy details about other taxes.
• Monetary System: The Mughals had a developed system of metallic currency, with mints across the Empire issuing coins of gold, silver, and copper. The relative value of various currencies, the system of minting, and the locations of mints will be discussed.
• Prices and Price Fluctuations: The impact of price fluctuations on production and commercial activities during the period will be examined, along with other related aspects.

Fiscal Sysstem

Difficulty in Determining Tax Shares:

• It is challenging to determine the exact share of taxes, excluding land revenue, in the total income of the Empire.
• Shirin Moosvi estimated these taxes to be around 18% for the province of Gujarat and 15% for Agra. In other provinces, the share was less than 5%.

Types of Taxes and Collection Mechanism:

• We will not delve into the specifics of various taxes.
• Instead, we will focus on the types of taxes and the mechanisms used for their collection.

Taxes other than Land Revenue

Sources of Revenue for the Mughal Empire:

• Tolls and Levies: Taxes were imposed on craft production, market activities, customs duties, and rahdari (road tax) for both inland and overseas trade. Mint charges also contributed to revenue.
• War Booty and Tributes: The state treasury received significant amounts from war booty, tributes, and gifts.
• Market Taxes: Almost all items sold in the market were taxable. Commonly taxed articles included clothes, leather, food grains, and cattle.
• Tax Collection: Taxes were collected harshly, with even small traders and artisans subject to taxation. For example, Katraparcha was a tax on various types of cloth, and commodities like indigo, saltpetre, and salt were also taxed.
• Customs and Transit Dues: Goods transported from one location to another were subject to tax. Customs duties during Akbar's time were generally around 2.5%. Over time, these rates increased, with Aurangzeb implementing different rates for various groups (e.g., 2.5% for Muslims, 5% for Hindus).
• Exemptions and Complaints: Articles valued under 52 rupees were exempt from customs duties. Foreign merchants often complained about excessive customs charges, and exemptions were sometimes granted but not always honored.
• Rahdari or Transit Tax: This road toll was levied on goods passing through different territories, and although the charges at each location were small, they added up significantly. Zamindars also collected tolls on goods passing through their lands.
• Income from Mints: The state earned income from mints through a tax called mahsul-i darul zarb, which was about 5% of the value of the minted money. Additional charges included rusum-i ahlkaran (officials' perquisites) and ujrat-i karigaran (artisans' wages).

Mechanism of Collection

Collection of Taxes and Revenue Management:

• The state had a well-organized system for collecting taxes, similar to land revenue.
• Taxes were classified into mal-o jihat(related to land revenue) and sair jihat(related to merchandise and trading).
• Fiscal divisions called mahalat-i sair or sair mahals were created in large cities and towns for tax assessment and collection.
• The mahal was a fiscal division, distinct from the pargana, which was both a revenue and territorial division.
• The Ain-i Akbari provided separate revenue figures for towns and sair mahals in places like Ahmedabad, Lahore, Multan, and Broach.
• In the 17th century, sair mahal figures for each town were often listed separately in revenue tables.
• Examples of revenue mahals in Surat included mahal farza, mahal khushki, mahal namakzar, and others.
• These revenue districts were either granted as jagir or their collections were sent to the state treasury.
• Officers responsible for tax collection, except in custom houses and mints, had the same titles as land revenue officials, such as amin, karori, qanungo, and chaudhari.
• Ports had a different set of officers, with the mutasaddi being the chief official responsible for tax collection.
• The mutasaddi was appointed by the Emperor and oversaw officials like mushrif, tahwildar, and darogha-i Khazana in custom houses.
• Tax rates for commodities were determined by prices set by merchants at the custom-house.
• The net amount collected from these taxes is difficult to calculate due to a lack of data, but it is estimated to be around 10% of the total state income according to Shireen Moosvi.

Currency System

Mughal Coinage

• Well-Organized Monetary System: The Mughals had a sophisticated monetary system with a focus on the purity and quality of their coinage.
• Tri-Metallic Currency: They used gold, silver, and copper coins, with silver being the base of the fiscal and monetary system.
• Silver Coin (Rupaya): Standardized by Sher Shah, continued by Akbar, and later modified by Aurangzeb. It was the main coin for business and revenue.
• Gold Coin (Ashrafi or Mahr): Used mainly for hoarding and gifts, not common in commercial transactions.
• Copper Coin (Dam): Used for small transactions, with its weight reduced during Aurangzeb's reign.
• Other Coins: Included kauris for petty transactions, mahmudis, hun or pagoda, tanka, and various coins introduced by rulers like Akbar and Aurangzeb.
• Exchange Value: The value of gold, silver, and copper coins fluctuated based on market supply, with specific ratios for transactions during different periods.

The Minting System

• The Mughals had a free coinage system where bullion could be taken to the mint and coined into money.
• Only the state had the authority to issue coins; no one else could produce them.
• Strict standardization was enforced to ensure the purity of the coins.
• A large number of mints were set up throughout the Empire, especially in major towns and ports for easy access to imported bullion.
• Coins displayed the:
  • Mint name
  • Year of minting
  • Ruler’s name
  • King’s portrait(e.g., Ram and Sita on Akbar's gold muhr)
  • Kalima(though this was abandoned by Aurangzeb)
• Newly minted coins were called taza sikka, while coins in circulation during an emperor's reign were chalani, and those from earlier reigns were khajana.
• All coins except taza were subject to value reduction over time.
• Deductions were made based on age and weight loss of the coin.
• Abul Fazl noted that minor weight loss (less than one rati) was ignored, while greater losses led to deductions or treatment as bullion.
• Reminting of imported coins into Mughal currency facilitated exchange, as per Moosvi.

Working of Mints:

• People who wanted to mint money had to bring bullion or old coins to a mint.
• The metal's quality and purity were checked.
• New coins were minted and given to the person who brought the metal.
• A fee of about 5.6% of the bullion value was charged for minting.
• A large number of workers and craftsmen were involved in the minting process.
• A mint was overseen by an officer called darogha-i-darul zarb, who supervised the entire operation with the help of officials, skilled artisans, and laborers.
• Sarraf: An assessor who judged the purity, weight, and age of coins and made deductions on their value.
• Mushrif: Responsible for maintaining accounts.
• Tahwildar: Kept daily profit accounts and securely stored coins and bullion.
• Muhr kan(engraver): Engraved and created coin dyes.
• Wazan kash(weightman): Weighed the coins.
• Artisans: Included zarrab (coin maker), sikkachi (stamper), etc.
• The output of mints was influenced by their size and the commercial activities of the area.
• By the late 17th century, the Surat mint was producing around 30,000 rupees per day.
• Aziza Hasan analyzed coin circulation patterns in the 16th and 17th centuries. She found that in 1639, the total rupees in circulation were three times greater than in 1591. After 1639, circulation declined, reaching double the 1591 figure by 1684. Post-1684, circulation increased again, tripling the 1591 total by 1700.
• Abul Fazl listed mints in the Aim-i Akbari, noting that copper coins were issued by 42 mints, silver coins by 14 mints, and gold coins by 4 mints. By the late 17th century, silver coin mints increased to 40.
• Major mints included Delhi, Agra, Lahore, Surat, Ahmedabad, Patna, and Jaunpur.
• P. Singh compiled a comprehensive list of mints, revealing that many mints mentioned on coins were not recorded in the A’in or other historical texts.
• This indicates that the Mughals established a modern monetary system in many aspects.

Prices

Gold, Silver and Copper

Value of Gold to Silver (1580s - 1750):

• In the 1580s, the value of gold to silver was 1:9.
• By the 1670s, after some fluctuations, it changed to 1:16.
• However, by 1750, it decreased again to 1:14.

Price of Copper Coins (16th Century - 1750):

• The price of copper coins increased by 2.5 times from the end of the 16th century to the 1660s.
• By 1700, the price of copper coins was double that of the 16th century.
• Again, by 1750, the price of copper coins rose to the level of the 1660s.

Agricultural Produce

• The prices depended on the cultivation of the specific food grains in a particular region.
• Again, the prices varied due to the level of production in a particular year. There could be large variations in the prices of the same commodity at two places at the same time, depending on how far it was carried from the place where it was grown.

The prices of some food grains recorded in the A’in are given below:

• Wheat per man (maund) 12 dams sada
• Paddy per man 100 dams
• Black gram per man 8 dams
• Dewzira Rice per man 90 dams
• Lentils per man 12 dams
• Sathi Rice per man 20 dams
• Barley per man 8 dams
• Mash Dal per man 16 dams
• Moth gram per man 12 dams
• Mung per man 18 dams

The prices of food grains doubled between 1595 and 1637. Between 1637 and 1670, the increase was about 15 to 20 per cent.
By 1670 the prices were 230 per cent of 1595.
A systematic data is available for Eastern Rajasthan.
Here the agricultural prices show a small increase between 1660’s and 1690’s, but a sharp increase by the second decade of the 18th century.
After this, they maintained a level more than twice of that in the 1690’s.

Sugar and Indigo

• During the Mughal period in India, two important cash crops were sugar and indigo.

Sugar Prices in Northern India:

• Until 1615, sugar prices in northern India showed little change.
• By 1630, prices surged by 140% and remained high until the 1650s.

Sugar Prices in Gujarat:

• In Gujarat, sugar prices doubled by 1620, indicating a significant increase.

Indigo Price Trends:

• Indigo prices varied based on two major varieties: Bayana indigo and Sarkhej indigo.

Bayana Indigo Prices:

• In 1595, the price for Bayana indigo was Rs. 16 per man-i Akbari.
• Prices remained stable until the early 17th century.
• In the 1630s, there was a sudden price increase, which later declined but stayed above the 1620s levels.
• The 1660s saw another sharp rise, with prices remaining about three times higher than in 1595.

Sarkhej Indigo Prices:

• Sarkhej indigo prices increased by 1.5 times by 1620.
• The 1630s experienced a sharp rise, followed by a decline in the 1640s, but prices remained double compared to 1595.

Impact of Overseas Demand:

• Fluctuations in indigo prices were also influenced by overseas demand.

Wages

• The A’in-i Alrbari provides figures for the wages of a large category of workers. In the absence of any such data for the 17th century, it is difficult to discover any definite wage trend over a period of time.
• The scattered figures for the 17th century do show that by 1637 an increase of 67 to 100 per cent takes place; but these are not enough to draw broad conclusions.