The Mughal Economy

Another important feature of Akbar's memorandum to his officers is the specific directives he gives the latter regarding economic matters, particularly the emphasis on actions designed to enhance the agrarian economy.

Indeed, as diverse as it was, the Mughal elite was miniscule relative to the overall population of northern India, meaning that of necessity it had to work productively with a diverse range of provincial and local intermediaries in order to function. Outright coercion was rarely effective, or, for that matter, good for business. And thus, great effort was expended on getting the landed gentry of the countryside, the so-called zammdars, not only to cooperate in revenue collection, but also to make it worth their while to do so through a pragmatic mixture of symbolic recognition of their status, financial incentives, the drawing of contracts that acknowledged their property claims, respect for local customs and traditions, charitable endowments for religious institutions (including Hindu temples and other non-Muslim institutions, in addition to Sufi shrines and monasteries), and the like.

Of course, these efforts did not always work, and there are no doubt many instances in the historical record of zammdars who resisted the Mughal state's encroachment on their areas of traditional influence, as well as armed resistance from peasants and cultivators who objected when tax burdens were set too high, or provincial Mughal officials abused their authority by engaging in corruption or exploitation. But overall the approach was extremely successful, in no small part because, as noted earlier, the state worked to make the tax burden relatively fair, flexible, and rational, and to punish corruption when it occurred so as to give local zammdars, rural peasants, and the residents of market towns and other provincial urban centers a clear sense that Mughal sovereignty was legitimate and their rule was just.

Indeed, Akbar specifically directed that his officials “should not collect grains from ra’iyats [that is, the peasant cultivators] with the intention of hoarding and for making prices rise,” adding later that while it was the duty of Mughal sheriffs to be aware of the general financial situation of those under their jurisdiction so as to be able to recognize when people were spending beyond their ordinary means (an obvious sign of corrupt or otherwise criminal behavior) the emperor adds an important caveat: “This enquiry should be treated as part of administrative duty to be performed with righteousness and good intentions and should not be utilised as a means of extorting illegal gratifications.”^[1923]

Mughal taxation, moreover, was never a fixed proposition. We have already noted that from the late sixteenth century onward the assessment of tax burdens was based on decennial average yields, often calculated in consultation with the local zammdars and cultivators who provided the actual data for the state's ledgers. This alone lent an inherent flexibility to the system, but it was supple in other ways as well. For instance, the zabt system included specific categories of offsets for years when the harvests were lower than expected, as well as tax incentives designed to encourage greater local investment in agricultural capacity. Akbar alludes directly to one such policy in the memorandum discussed previously when he instructs his officers to take “measures to develop agriculture by encouraging the ra’iyat and by giving them taqawi so that the villages and towns may flourish and multiply year by year.”^[1924] Here taqawi refers to a type of loan, from the state's own coffers, advanced to peasants and cultivators to pay for seed, acquire equipment for tillage, or otherwise expand their agricultural capacity. In the same vein, financial assistance was sometimes provided by the state in times of agricultural distress, whether due to poor monsoons, infestation, or some other ecological threat to the harvest.^[1925]

Another specific way that agricultural capacity could be expanded was through the clearing of forests, known as jangal-bari, and the conversion of these and other uncultivated areas into productive lands.

The Mughal state not only approved of such activity, they actively promoted it, providing tax deductions and other incentives to encourage zammdars and cultivators who undertook such work. Indeed, according to the noted economic historian Rajat Datta, “massive concessions, including proprietary rights, were given to such agrarian pioneers.”^[1926] These property rights were typically recorded in contracts sometimes known as khatt-i qabuliyat (“letters of agreement”) or other types of official documentation that could later be used in the settlement of disputes over inheritance, property boundaries, and so on. The state also tried to accommodate different forms of payment. Thus, even as it worked strenuously to regularize currency and increase the overall monetization of the economy, the Mughal state continued for a long time to accept tax payments “in kind” (i.e., in the form of agricultural produce, and even livestock), with the choice usually left up to the taxpayer. This “principle of choice,” as Datta explains, “was meant to accommodate a wide range of revenue-payers, many of whom did not have the wherewithal to pay in hard money.”^[1927] Over the course of the seventeenth and eighteenth centuries, of course, cash transactions grew increasingly into the norm all the way through the chain of suppliers, middlemen, tax collectors, and a growing class of bankers, rent farmers, and other financiers. But the willingness of the Mughal state to be rather laissez-faire on certain economic matters— establishing clear norms and expectations, and crafting policies designed to achieve specific economic ends, but also allowing a certain leeway in terms of how local actors actually adapted to the zabt regulations—was a key to its long-term stability and success. Such “pragmatic flexibilities,” Datta argues, are what helped the state to manage its expansion effectively “without having to displace local institutional and social agencies,” even as it engaged in vigorous (and sometimes even coercive) forms of “fiscal streamlining.”^[1928]

As noted earlier, these policies were not solely a product of Akbar's vaunted “golden age” of reforms, but rather received continuous refinement as part of the ongoing Mughal strategy of governance.

Later commentators have detailed the active role taken, for instance, by Shah Jahan (r. 1628-1658) and his ministers in working to improve the revenue system,^[1929] and we even find the infamously Shari‘a-minded Aurangzeb (r. 1658-1707) issuing detailed yet pragmatic directives regarding how his officials were to manage tax policy, revenue collection, and their duties at the local and provincial level.^[1930]

This period also saw the agrarian countryside of northern India grow increasingly integrated into the economies of major urban centers like Delhi, Agra, and Lahore (as well as important provincial centers like Murshidabad, Lucknow, etc.) via a sophisticated network of roads, bazaars, and the postal system. This allowed agricultural products, cloth, crafts, and other artisanal goods to circulate extensively within the subcontinent for consumption in Mughal cities and courts, but there was also a considerable outflow of such goods destined for export to other parts of India and/or into the larger global economy. Such commercial flows were facilitated, in turn, by a growing class of middlemen, financiers, and banking firms that began over the course of the seventeenth and eighteenth centuries to insert itself more and more into the basic process of Mughal tax collection through revenue farming, loans to zammdars and cultivators, and other instruments of finance and credit that linked Mughal India's economy to that of the wider Indian Ocean world. A raft of research in recent decades by scholars like C. A. Bayly, John Richards, Sanjay Subrahmanyam, Prasannan Parthasarathi, and Rajat Datta, who were themselves building on earlier work by K. N. Chaudhuri, Om Prakash, and Ashin Das

Gupta, has highlighted the complexity and sophistication of these Indian Ocean trading networks, as well as the role of the Mughals and their coastal client states in both facilitating and profiting from them.

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Source: Bang Peter F., Bayly C.A., Scheidel Walter (eds.). The Oxford World History of Empire. Volume Two: The History of Empires. Oxford University Press,2020. — 1352 p.. 2020

The Mughal Economy

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