Economic Inequality in Colonial India: An Analysis of Land Revenue Policies and Agrarian Economy

Abstract

This paper critically examines the deep-rooted impact of British colonial land revenue policies on economic inequality in India, with particular attention to their effects on the agrarian economy between the late eighteenth and mid-twentieth centuries. The colonial administration's revenue frameworks most notably the Permanent Settlement in Bengal, the Ryotwari system in Madras and Bombay Presidencies, and the Mahalwari system in northern India were not designed to promote agricultural development or peasant welfare but to ensure a stable and rising flow of revenue to the British exchequer. These systems restructured the traditional agrarian relations, concentrating land ownership in the hands of zamindars and intermediaries while burdening cultivators with excessive taxation and insecure tenancy. Drawing upon historical records, administrative documents, and economic data, this study demonstrates how these policies systematically extracted surplus from the rural economy, drained local capital, and entrenched structural inequalities. The colonial emphasis on revenue maximization and cash-crop cultivation disrupted subsistence farming and made Indian peasants vulnerable to price fluctuations, indebtedness, and land alienation. Over time, these developments weakened agrarian productivity and led to frequent famines, rural impoverishment, and regional disparities. The analysis also highlights how the colonial state's disregard for irrigation, rural credit, and technological investment further deepened economic stagnation and social stratification within villages. The paper argues that the legacy of colonial land policies continues to shape patterns of inequality and agrarian distress in contemporary India. Post-independence reforms, including land ceiling acts and tenancy regulations, have only partially mitigated the structural imbalances inherited from the colonial era. By tracing the historical continuity between colonial agrarian exploitation and present-day rural inequality, this research underscores the long-term consequences of extractive governance and its implications for inclusive development. Ultimately, the study contributes to a deeper understanding of how colonial economic institutions laid the foundation for enduring disparities in land ownership, income distribution, and rural livelihoods. It also offers valuable insights for policymakers and researchers seeking to design equitable land and agricultural reforms that address both the historical and structural roots of inequality in India.