Ryotwari System (Indian Tax System)

Ryotwari System 

Thomas Munro and Captain Alexander Read, who were sent in 1792 to administer the recently acquired Baramahal region of Madras Presidency, devised a system of collecting directly from the villages, fixing the amount that each village had to pay. When Munro became governor of Madras Presidency in 1820, he introduced the system which came to be known as the  Ryotwari System. The most important reason for the adoption of this system, from the Company's point of view, was that it brought in a larger revenue than any other system could have done as no intermediaries were involved and whatever was extracted from the cultivator went directly to the government. 

Munro reduced the tax to one-third of the gross produce and extended the Ryotwari System to other areas in the presidency. Unfortunately, this one-third of gross produce was nearly equal to the economic rental, and the state wanted its money regardless of the actual yield of the holding and the prices prevailing in the market. This continued for nearly thirty years with the peasants getting deeply mired in poverty.

As the system was extended to many districts that had not been surveyed there was no clear picture of how much land a peasant cultivated, or how much it would produce. The tax was fixed arbitrarily, often on the basis of what the ryot had paid in earlier years. This was known as a 'putcut' assessment. The tax was so high that very often it was beyond the ryot's capacity to pay. But the ryots were coerced and even tortured to extract revenue. Many ryots were forced into the clutch of moneylenders.

In 1855, the Madras Torture Commission Report revealed the practices of coercion, bribery, and corruption by the subordinate officials of the collectorate. It was form 1855 that a scientific survey of land and a fresh assessment of revenue were undertaken, resulting in a decline in the actual burden of tax. Now it was decided that the revenue rate would be half of the net value of the produce of the land and the settlement would be made for thirty years. The reformed system of settlement was introduced in 1864 which led to agricultural prosperity and extension of agriculture in coming years although interrupted by two famines in 1865-66 and 1876-78. 

In the Bombay Presidency, beginning in Gujarat, the British began collecting directly from the peasants in 1813-14. After 1818, when the British conquered the Peshwa's territory, the ryotwari system on the Madras pattern was also introduced there, under the supervision of Elphinstone, a disciple of Munro and Governor of Bombay from 1819 to 1827. On the basis of a survey carried out in 1824-28. 

The state demand was fixed at 55 per cent of the net produce. However, most of the surveys were faulty, and the estimates of produce erroneous, leading to over-assessment. The harassment of the peasantry reached such levels that the cultivators deserted their fields and large tracts of land remained fallow.

Around 1836, Wingate and Goldsmith improved the system. This modified assessment covered most of the Deccan by 1865. Each field was to be assessed on the basis of its soil location. The land revenue was somewhat reduced, and land that had become devalued acquired some saleable value. The system was extended to Berar, East Bengal, parts of Assam, and Coorg. It may be noted that the system was devised at a time when Utilitarian ideas had begun to influences policy planning in India, among which was David Ricardo's theory of rent. 

Features of the System 

1. Ownership and occupancy rights of land were vested in the ryot and there was no limit on the extent of land they could own. They were free to sublet, transfer, or sell their land. 

2. Ryots paid the tax directly to the Company. The revenue to be paid was in the range of 45 per cent to 55 per cent based on an estimated production of the land.

3. Revenue was not fixed, so it could be raised when production was higher. 

4. The settlement was not permanent and could be revised periodically.

5. In theory the ryot were allowed to cultivate the land of their choice, but in practice they were more or less forced to cultivate land even if they did not want to do so.

6. Barren land under government control was allowed to be cultivated and the revenue generated would have to be shared with the government.

7. Land could be confiscated if the revenue was not paid.

Disadvantages of the System

1. Over assessment of revenue was a major problem. The land revenue fixed was often more than the capacity of land.

2. The method of collection was inflexible, often involving torture to extract tax.

3. Corruption grew as the officers could be bribed while assessing the land.

4. It was possible for non-cultivating landlords to get registered as the owners of particular holdings, with the actual cultivator being reduced to becoming their tenants, servants, or even bonded labourers.

5. The high tax and the harassment in collection devalued land value as not many wanted to buy it.