1765 – Grant of Diwani:
Mughal Emperor Shah Alam II appointed East India Company as Diwan of Bengal, Bihar and Orissa (Treaty of Allahabad).
Marked the beginning of British control over revenue administration.
Company now became a trader-cum-sovereign power.
Significance:
Transition from trading company → administrative authority.
Company responsible for collection of revenue and maintenance of law and order.
Objective: to maximize revenue to fund trade and wars.
Company exploited Bengal’s resources:
Revenue collected to finance export of Indian goods, not to reinvest locally.
Artisans forced to sell goods at low prices; agriculture declined.
Famine of 1770 killed ~10 million people (1/3 of population).
Outcome:
Bengal’s economy collapsed — prompting calls for agricultural improvement and revenue reform.
Introduced by Lord Cornwallis, designed by John Shore.
Features:
Zamindars recognized as landowners.
Fixed revenue (permanent) — not to be revised in future.
Zamindars to collect rent from peasants and pay fixed revenue to Company.
Failure to pay led to auction of zamindari.
Aims:
Ensure stable revenue for Company.
Encourage investment in agriculture by zamindars.
Problems:
Revenue fixed too high, zamindars defaulted → land auctions.
Zamindars did not invest in land improvement.
Peasants (ryots) faced heavy rent, insecurity, indebtedness.
Later, when prices rose, Company lost potential revenue (since fixed permanently).
Introduced by Holt Mackenzie in North-Western Provinces (U.P.).
Based on idea that village (mahal) was the basic unit of revenue.
Features:
Revenue assessed for each village collectively.
Collected by village headman, not zamindar.
Periodic revision of revenue (not permanent).
Aimed to protect traditional village system.
Issues:
High assessment led to peasant distress.
Villages deserted as peasants fled due to inability to pay.
Introduced in Madras and Bombay Presidencies by Thomas Munro and Alexander Read.
Based on direct settlement with ryots (cultivators) — no zamindars.
Features:
Individual cultivator = owner of land.
Revenue fixed on basis of soil and crop productivity.
Periodically revised.
Problems:
High revenue demand (often 50–60% of produce).
Ryots fell into debt, unable to pay dues.
Famine and migration followed in several areas.
British realized rural India could yield cash crops for European industries.
Crops promoted:
Indigo (Bengal, Bihar)
Jute (Bengal)
Tea (Assam)
Sugarcane (U.P.)
Cotton (Maharashtra, Punjab)
Rice (Madras)
Nij system:
Planter cultivated indigo on his own land with hired labour.
Required fertile land, large capital, and labour → impractical (only 25% area).
Ryoti system:
Ryots forced to sign satta (agreement) to grow indigo on part of their land.
Planter advanced cash → debt cycle began.
Peasants had to use best lands (rice fields) for indigo, which exhausted soil.
Result: Peasants trapped in debt and poverty.
Causes:
Oppressive contracts, low prices, and soil exhaustion.
Peasants refused to sow indigo; attacked factories and planters.
Supported by zamindars and village headmen (resenting planters’ power).
Government Response:
Fearing another uprising (after 1857), the British set up the Indigo Commission (1860).
Report condemned planters; said indigo was unprofitable for ryots.
Ryots could refuse future contracts.
Outcome:
Indigo production collapsed in Bengal.
Planters shifted to Bihar.
Later, synthetic dyes (1890s) reduced indigo demand globally.
Indigo planters continued exploitation in Bihar.
Mahatma Gandhi’s first Satyagraha (Champaran, 1917) aimed at ending the Tinkathia system (forcing peasants to grow indigo on 3/20th of land).
Marked beginning of Gandhian mass mobilization in India.
Colonial Objectives:
All land revenue systems (Permanent, Mahalwari, Ryotwari) were tools of extraction, not reform.
Outcome:
Peasant indebtedness, famines, ecological decline.
Rural economy subordinated to imperial commercial needs.
Ideological Justification:
British officials viewed themselves as “paternal protectors”, but the policies revealed fiscal exploitation and agrarian distortion.
Resistance as National Awakening:
The Indigo Revolt was among the earliest organized peasant movements in colonial India — precursor to later anti-colonial struggles.
Diwani – Right to collect land revenue.
Zamindar – Landholder under Permanent Settlement.
Mahalwari – Revenue unit = village/mahal.
Ryot – Cultivator directly paying revenue.
Nij / Ryoti system – Systems of indigo cultivation.
Indigo Commission (1860) – Investigated planter abuses.
Champaran Movement (1917) – Gandhi’s first satyagraha.