Economy in Eighteenth Century India

The eighteenth century can hardly be said to exhibit any substantial economic continuity between its earlier and later parts. It was a period of considerable political turmoil in India, one in which states were formed and dissolved in quick succession.

That there was a great deal of fluidity in the system. It is of course true that raids by military forces would have caused dislocation. The destruction of irrigation tanks, the forcible expropriation of cattle wealth, and even the forced march of masses of people were not unknown in the wars of the 1770s and thereafter. All these must have had a harmful effect on economic stability and curtailed the impulse toward growth.

When viewed from Delhi, the 18th century is certainly a gloomy period. The attacks of Nadir Shah, then of Ahmad Shah Abdali, and finally the attacks by the Rohillas (who controlled Delhi in 1761-71) put the city in a state of regular destruction. This perspective can hardly have been shared by the inhabitants of other centres in India, whether Trivandrum, Pune, Patna, or Jaipur.

There was a process of economic reorientation that accompanied the political decentralization of the era, and it is on account of this that the experience of Delhi and Agra cannot be generalized. However, the conditions of different regions were not uniform. In some, the first half of the eighteenth century witnessed continued expansion - Bengal, Jaipur, and Hyderabad, for example. While some others were late bloomers, as in the case of Travancore, Mysore, or the Punjab.

No single chronology of economic prosperity and decline is likely to fit all the regions of India in the epoch. Despite some key weaknesses and contradictions the economy of the eighteenth century performed well in the spheres of agriculture, inland trade and urbanization. There were some areas which saw agricultural decline - often because of inter state warfare as in the Punjab and parts of north India.

Lack of new agricultural methods and techniques was overcome with the experience and management of land and labour. Data of Taqsim papers used and compared vis a vis Ain-i-Akbari proves that it was not the lack of cultivable land but lack of labour and peace which resulted into declining agricultural production and fluctuating agricultural prices as well. At the same time the price rise benefited the peasants but unequally according to vertically divided sections of peasantry. States exacted tribute from systems of agricultural commodity production that tied villages to expansive networks of commercial mobility and exchange.

Except for a major subsistence crisis in south India between 1702 and 1704, the first seven decades of eighteenth century in India were remarkably free of famine. The great Bengal famine of 1770, in which an estimated one-third of the population perished, occurred soon after the colonial conquest. This was followed by another disastrous famine in north India in 1783.

Overall a favourable land-labour ratio had enabled highly mobile peasant and tribal labour to negotiate reasonable terms with controllers of land. But the excessive revenue demands made the peasants’ desertion a regular phenomenon particularly in north India. While some village notables managed to transform revenue farms into hereditary estates, others felt the squeeze from powerful regional states as Tipu’s Mysore.

Population, production, prices and wages tended to be on a gentle upward incline during the eighteenth century. Fragmented polities did not hamper the development of a thriving inland trade in grain, cloth and cattle. Corporate merchant institutions transcended political boundaries in overseeing the transportation of goods and the provision of credit and insurance services.

Pre-colonial era artisnal labour, especially weavers, had ample scope for successfully resisting extravagant demands by intermediate social groups and the state. Even an intrusive state like late-eighteenth century Mysore appeared to attack intermediaries rather than labour. Evidence from Bengal and Madras suggests that urban labour was worse off in relation to the state and the market in the early colonial than in the immediate precolonial period.

While inland trade did well, the Indian shippers and merchants involved in export trade declined in the face of European advances. The great Gujarati port ity of Surat lost its importance around 1720. There was a resurgence of demand for Indian goods in both West and South East Asia in the late eighteenth century in addition to European demand, but by now British merchants and shippers had achieved dominance at the expense of Indians and took the bulk of the profits.

As the old commercial centres of Surat, Masulipatnam and Dhaka degenerated, colonial port-cities like Bombay, Madras and Calcutta took their pride of place. But the decline of the Mughal capitals of Delhi and Agra was offset by the rise of regional capitals, including Lucknow, Hyderabad, the various Maratha cities, and Seringapatam.

The level of urbanization was clearly higher in 1800 than a century before. What had changed in the urban centres was the relative balance of power between rulers and merchants. In some instances, commercial and financial magnets were arrogating to themselves the powers of the state.

It would also appear for a variety of reasons, that the mid-eighteenth century marks a significant change in economic sphere. For example, once the English East India Company got hold on the revenues of Bengal subah the flow of money was adversely affected. While earlier Bengal received gold and silver in exchange for its exports, this pattern no longer held.

In later part of eighteenth century the peasants were forced to cultivate certain cash crops like indigo and opium. This had adverse impact on food crop production. But another reason why the latter half of the eighteenth century differs from the period before about 1750 is the changing character of war.

In the post-1750 period, warfare became more disruptive of civil life and economic production than before, and at the same time the new technologies in use made it a far more expensive proposition. The use of firearms on a large scale, the employment
of mercenaries, the maintenance of standing armies, all of these had harmful affects.