Examine the British Land revenue policy that led to the drain of wealth from India to England


  1. Introduction
  2. State the land revenue policies.
  3. Explain how it ruined agriculture and caused economic drain.
  4. Conclusion

The state in India derived a large percentage of its income from land. State used to extract land revenue either directly or indirectly through intermediaries. With the decline of the Mughal empire, there were different rulers in different parts of India with more or less exorbitant claims. Yet in villages agronomy was self-sufficient. Instead of improving the state of agriculture British introduced land revenue policies which helped them extract maximum land revenue possible from peasants.

Land revenue policies under the British:

The Permanent settlement was introduced in Bengal and Bihar under which the state demand was fixed at 90% of the rental. The sum so fixed was unalterable forever. Ownership rights were given to zamindars which were hereditary and transferable.

Under Ryotwari settlement introduced in Madras, cultivator was recognized as owner of land subject to payment of land revenue. This settlement was not permanent and revised periodically after 20 to 30 years when revenue demand was usually raised.

Under Mahalwari system introduced in Gangetic valley, the North–west Provinces, parts of Central Nadia and the Punjab, the revenue settlement was made village by village or estate by estate with village heads or heads of families who collectively represented village heads. Land revenue was periodically revised.

Consequences on Indian agriculture:

  • Commercialisation of land: Under permanent settlement- revenue demands were exorbitant. Peasants who couldn’t pay were ousted out by zamindars in hope of getting higher rent from another tenant. Consequently, a large number of estates were advertised for sale at auction. This created new form of private property in land in a way that benefit of innovation did not go to cultivators.
  • Hindering capital investment: The high pitch of land assessment, drained the cultivators of its capital, hindered capital investment in Land and, in general, checked expenditure on agricultural improvements.
  • Stagnation in agricultural productivity: The zamindars had no incentive to invest in agriculture as they were entitled to a fixed amount of revenue, and land was saleable, mortgageable and alienable.
  • Peasants were forced to take credit from informal moneylenders but often failed to repay. This led to rural indebtedness.
  • Agriculture was ruined; Famine followed famine. Epidemics, malnutrition and starvation were common place. E.g. – Madras famine of 1877. A general resource lessness and poverty was created.

Revenue policies furthered economic drain:

A large part of revenues generated through land revenue policies was simply exported to Britain instead of investing in irrigation or improvement of agricultural techniques. In the absence of other industry a large part of exports to British was to be met by cheap agricultural produce. The ryots were compelled to sell as large a portion of agricultural produce as possible to meet this demand by increasing revenue demands. The mechanism of land revenue forced the peasant to pay for the drain as well as provide the agricultural products.

Land revenue policy is, thus, the villain which played foul with Indian agriculture as well as helped British compel peasants to finance the economic drain also. Hence it is also said that the system worked as a sponge, absorbing good things from Ganges, and squeezing them down on Thames bank.


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