Note: This summary is prepared for OPSC History Optional revision, focusing on agrarian structure, revenue policy, and de-industrialization (Salt).
1. Nature of British Economic Policy
The primary motive of British policy was to serve the interests of England rather than the economic development of the colony. The administration utilized a policy of divide and rule to enslave the population. By 1947, Odisha inherited a pre-capitalist economy that served as a passive agent for British industrial capitalism, suffering all its ills with none of its advantages. The administration was primarily confined to revenue administration and the augmentation of land revenue.
2. Land Revenue Administration
Upon acquiring Odisha, the British faced a complex agrarian structure. The period from 1804 onwards saw various experiments in land settlement:
- First Settlement (1804): The British initiated their first settlement shortly after conquest, followed by a package of alternative solutions.
- Permanent vs. Short-term Settlement: There was a significant debate regarding the Permanent Settlement. Experts like Edmonstone and Cecil Beadon supported a permanent arrangement (similar to Bengal) to create a wealthy class of Zamindars who could contribute to taxes. However, opponents argued that the inelasticity of land revenue under a permanent system would cause future financial loss to the government.
- Outcome: In practice, land revenue settlement remained a "farce," with the government farming out land to Zamindars on short-term arrangements while retaining direct management in some areas.
3. Agrarian Structure and Tenancy Rights
The British classification of the peasantry in the Mughalbandi areas created a sharp distinction between two classes of cultivators:
- Thani Ryots (Resident Cultivators): They held a hereditary right of occupancy. They enjoyed communal rights to pasture and firewood, held homestead land rent-free, and could not be ousted as long as they paid rent.
- Pahi Ryots (Non-resident Cultivators): They were mere tenants-at-will. While they often paid lower rent than Thani ryots, they had no security of tenure and could be evicted at any moment.
4. Rent, Wages, and Peasant Suffering
Rent Hikes: Between 1837 and 1897, rent increased drastically (e.g., 43.32% increase in Cuttack). Zamindars arbitrarily enhanced rates beyond government limits.
Illegal Cesses: Apart from rent, tenants were forced to pay extra cesses known as 'awab' on items like grass and betel nuts. Penalty taxes like 'derivalla' and 'najaya' forced many tenants to desert their lands.
Rural Indebtedness: Cultivators relied heavily on traditional institutions like moneylenders and mahajans for survival, paying wages, and meeting rent demands during crop failures.
5. The Decline of Salt Industry (De-industrialization)
The destruction of the Odisha salt industry is a classic example of imperial exploitation.
- Maratha Period: Salt manufacture was a private concern of the Malangis (salt manufacturers). The Marathas only collected duties and did not interfere in production.
- British Monopoly: The British established a salt monopoly via regulations in 1804 and 1814 to prevent the smuggling of cheaper Odisha salt into Bengal.
- Impact on Malangis: Under the British, Malangis became wage-earners paid low rates. When the government stopped manufacturing salt in 1863 to favor imported Liverpool salt, approximately 26,000 Malangis lost their livelihood.
- Price Rise: The price of salt was deliberately raised to make imported salt competitive. By the 20th century, Liverpool and Madras salt dominated the market, and the indigenous industry was ruined.
6. Commercialization of Agriculture and its Failure
The British attempted to introduce commercial agriculture, but it largely failed due to a lack of capital, irrigation, and suitable soil.
- Sugarcane: Confined to local requirements due to lack of encouragement from landlords and government.
- Jute & Indigo: Jute failed to become popular because there were no jute mills to process the raw material. Indigo was introduced but was not popular.
- Cotton: Failed due to inferior quality and the influx of cheap, imported cloth.
- Irrigation Issues: Zamindars often prevented tenants from using canal water for cash crops, leading to monoculture (reliance on rice) rather than diversification.
7. Currency and Trade
Currency Crisis: Historically, Odisha used Kauri currency. The British demanded revenue in the standard silver coin, the Sicca rupee. They depreciated the value of Kauri, causing massive distress and price rises for the common people.
Decline of Ports: Early trade centers like Hariharpur, Pipili, and Balasore (the first English settlement in 1634) declined. Balasore's port was abandoned due to the shallowness of the bay, and trade focus shifted entirely to Bengal.
Conclusion
The British economic policy in Odisha was driven by the enrichment of the imperial treasury. Through the augmentation of land revenue, the destruction of the indigenous salt industry, and the enforcement of a disadvantageous currency policy, the administration ensured that the benefits of rule were purely "accidental and incidental," leaving the region in deep economic stagnation.
