In 1820, Thomas Munroe was appointed governor of Madras, where he founded systems of revenue assessment and general administration which substantially persisted into the twentieth century. He is regarded as the father of the `Ryotwari system'.
The ryotwari system, instituted in some parts of British India, was one of the two main systems used to collect revenues from the cultivators of agricultural land. These revenues included undifferentiated land taxes and rents, collected simultaneously. Where the land revenue was imposed directly on the ryots (the individual cultivators who actually worked the) the system of assessment was known as ryotwari. Where the land revenue was imposed indirectly (through agreements made with Zamindars) the system of assessment was known as zamindari. In Bombay, Madras, Assam and Burma the Zamindar usually did not have a position as a middleman between the government and the farmer.
An official report by John Stuart Mill in 1857 explained the ryotwari land tenure system as follows. As John Stuart Mill was himself working for the British East India Company, the following quote will see the system from the British perspective:
Under the Ryotwari System every registered holder of land is recognised as its proprietor, and pays direct to Government. He is at liberty to sublet his property, or to transfer it by gift, sale, or mortgage. He cannot be ejected by Government so long as he pays the fixed assessment, and has the option annually of increasing or diminishing his holding, or of entirely abandoning it. In unfavourable seasons remissions of assessment are granted for entire or partial loss of produce. The assessment is fixed in money, and does not vary from year to year, in those cases where water is drawn from a Government source of irrigation to convert dry land into wet, or into two-crop land, when an extra rent is paid to Government for the water so appropriated; nor is any addition made to the assessment for improvements effected at the Ryot's (Ryots = Cultivators) own expense. The Ryot under this system is virtually a Proprietor on a simple and perfect title, and has all the benefits of a perpetual lease without its responsibilities, inasmuch as he can at any time throw up his lands, but cannot be ejected so long as he pays his dues; he receives assistance in difficult seasons, and is irresponsible for the payment of his neighbours. . . . The Annual Settlements under Ryotwari are often misunderstood, and it is necessary to explain that they are rendered necessary by the right accorded to the Ryot of diminishing or extending his cultivation from year to year. Their object is to determine how much of the assessment due on his holding the Ryot shall pay, and not to reassess the land. In these cases where no change occurs in the Ryots holding a fresh Potta or lease is not issued, and such parties are in no way affected by the Annual Settlement, which they are not required to attend.
The ryotwari system is associated with the name of Sir Thomas Munro, who was appointed Governor of Madras in may 1820. Subsequently, the ryotwari system was extended to the Mumbai area. Munro gradually reduced the rate of taxation from one half to one third of the gross produce, even then an excessive tax. The levy was not based on actual revenues from the produce of the land, but instead on an estimate of the potential of the soil; in some cases more than 50% of the gross revenue was demanded.
In Northern India, Sir Edward Colebrooke and successive Governor-Generals had implored the Court of Directors of the British East India Company, in vain, to redeem the pledge given by the British Government, and to permanently settle the land-tax, so as to make it possible for the people to accumulate wealth and improve their own condition.
Payment of the land tax in cash, rather than in kind, was instituted in the late 18th century when the British East India Company wanted to establish an exclusive monopoly in the market as buyers of Indian goods. Critics asserted that in practice the requirement of cash payments was ruinous to the cultivator, exposing him to the demands of moneylenders as an alternative to the loss of his land and starvation when crops failed.
They also asserted that lean years resulted in regional famines, as the cultivators could not accumulate capital or invest in the productive development of their landholdings.
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