11 - Revenue farming, 1771-1777

Summary

The 1770 famine deepened the economic crisis the Company faced and gave new urgency to the search for more efficient revenue-extraction methods. But the decision to overhaul revenue administration and to take over direct control of collections in the diwani lands had already been made in effect in 1769 when the Company decided to send Supervisors into the districts to investigate each district's resources and draw up rent rolls for a future settlement. Company authorities in London, Calcutta, and Murshidabad had recognized by 1769 that while Company servants were increasing collections in the ceded territories of Burdwan, Chittagong, Midnapur, and the Twenty-four Parganas, the naib nazim's administration in the diwani territories was failing. The experience in Burdwan pointed to the system of the future. The rapid growth of the Burdwan revenues argued that a modified form of farming should be adopted throughout Bengal in which British officers would accept offers for an extended period of years from zamindars or other persons of substance and reliability. British officers would be free to reject bids from persons without security or good character. This was the policy continued in Burdwan in 1771, when Burdwan was farmed out for five years, and in the rest of Bengal in 1772, when the Company “stood forth” as diwan in the diwani lands and entered a five-year contract with ijaradars.

The central feature of the settlements made in Burdwan in 1771 and elsewhere in 1772 was the sale of revenue-collecting rights for a term of five years to the highest qualified bidders, with preference for hereditary zamindars and taluqdars when their offers were at least equal to others.