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Mughal Rule – An economic golden period of India?

Author: Sagar Kinhekar
Publication: Myind.net
Date:  May 8, 2020
URL:      https://myind.net/Home/viewArticle/mughal-rule-an-economic-golden-period-of-india

Mughal rule on parts of northern India was established by a Timurid prince called Babur in the year 1526. He invaded India when Lodi dynasty was ruling Delhi and surrounding areas and defeated Ibrahim Lodi to capture Delhi. Babur’s son Humayun lost the state briefly which was later invaded and captured back by Akbar who defeated King Hemu. This small Mughal state grew significantly during the rule of Babur’s descendants, from Akbar to Aurangzeb.

Today when we look back at India’s medieval history, Mughal kings are often assumed to be default emperors of their time. Some even refer their rule as  golden era of Indian history. For any nation to be in golden era its economy needs to flourish and benefit needs to percolate down to the masses. And for a flourishing economy a stable and peaceful state is needed.

While Mughals did rule major part of north India, their rule can hardly be called a stable empire. Southern India was relatively unaffected by Mughal rule, Mughals faced constant battles to save their kingdom even in north of India. They were constantly at war with Iran and Rajputana on north east and later with Marathas in deccan and Sikhs in Punjab. On east they had a fierce opposition from Ahom kings. They could never win Assam even after multiple efforts to invade.

Having said this, 250+ years of Mughal presence in North India cannot be ignored, especially when we know that India had almost quarter share of world GDP. So how was the economy during Mughal period? Was it the golden period of India? Well, looking at the GDP percentage and monuments created by Mughals it looks like, we had a great economy. However, to assess economy we cannot just rely on GDP data or oversized monuments built in the period. Let’s try to analyse this issue in little more detail.

Macro-Economic indicators

As per Economic Historian Angus Maddison, during Mughal Era, as many boastfully cite, the share of India’s GDP was around 22% of world GDP. Now let’s compare it with numbers of earlier times ( taken from same source). The GDP share of India in 1st AD was around 32% which went down to about 24% between AD 1000-1500. As can be seen, India already was an economic super power before Mughals invaded India. Even the 22% during Mughal period, cannot be attributed to only Mughals. Mughal empire controlled about 30% of India during large part Akbar’s rule. It expanded to about 50% during Shahjahan. It reached its zenith only during Aurangzeb, who controlled about 80% of India for a very brief period (less than a decade).

Now let’s look at per capita income. It was about $450 in 1st AD and about $550 in AD 1500, before Mughals invaded India. After about 200 years of rule, the per capita income still remained at $550 during Mughal period. As can be seen, there was hardly any increase in per capita income during Mughal Rule.

Revenue and Expenses

Tax revenue was major source of income for Mughals which constituted more than 90% of revenue, as per historian Jadunath Sarkar. The other minor revenue streams were Jijya and custom duty.

The taxation system is well detailed in Abul Fazal’s A’in-I Akbari. It is probably the most authentic document of Akbar’s time as it was written during his lifetime by Fazal, who was part of Akbar’s court. A scholar Shireen Moosvi, has done a detailed research on A’in-I Akbari in 1987 for her doctoral studies supervised by famous historian Irfan Habib. She has used estimates of the size of agricultural production, distribution of surplus, total value of external trade, price and wage structure and population in India as detailed in the A’in-I Akbari.

As per Shireen, Abu’l Fazl provided a formula for taxation, which represented one third of the agricultural yield, payable in cash at the prices prevailing locally. This gives a tax demand for kharif crops of 44.4% and for rabi crops of 38.3%. She assumes a difference in retail and farmer’s prices to be 10% thus lifting the rates to 48.9% and 42.1% respectively, concluding that the Akbar administration flatly laid claim to one half of the produce. One can assume the hardship on farmers with this kind of draconian taxation. With taxation at this rate and need of saving grains for seed (global benchmark for medieval world was around 15%), farmers would get only about 35% of what they produced.

In terms of expenses, more than 60% was spent on maintaining huge Mughal army and 5-10% was spent on royal household. Remaining 30% was used for salary of ministers and nobles, construction of monuments etc. There was hardly any public spending by the state. Most villages were self-sustaining economies and looked at state help only in case of bad monsoon.

Foreign Trade

As per Jadunath Sarkar, the foreign trade had negligible position in Mughal economy. The revenue through trade was less than 1% of total state revenue. As Francois Bernier had observed, the Indian traders were not protected by army under Mughal rules as was norm in Europe in his time. So entrepreneur would have to bear the entire risk. In case a trader would be able to manage protection from army, he would need to act like as slave to the state which could exact whatever terms it pleased, as per Bernier. Considering, Indian cotton and raw spices were high in demand, such practices directly harmed the export.

Further as per Jadunath Sarkar, there was no economic protection for domestic businessmen and entrepreneur. The import duty was just 3.5% (out of which 1% was jijya). Given this almost free import, the native manufacturers and traders were badly hit during Mughal period.

Infrastructure

Mughal rulers changed their capital frequently. It looks like that they had a fetish for changing the capital. Akbar started his rule in 1556 as a child of 12 in Delhi and in 1565 he moved his capital to Agra. For this shift, he ordered a ‘clean slate’ construction. He first demolished the pre-Mughal fortress and constructed a new walled city, which housed red fort. The construction lasted for a whopping 16 years and needed almost 10% of annual revenue. It involved 4000 skilled masons and numerous sculptors and artisans. The amount spent on creation of this city obviously came from draconian taxes collected from the masses. 16 years after Agra was re-constructed, Akbar constructed new imperial city called Fatehpur Sikri. His son Jahangir, an opium addict, ruled only 12 years but moved his capital between Agra, Fatehpur and Delhi several times at whim. This obviously costed money and caused unstable administration.

Jahangir’s successor changed capital to Shahjahanabad where he constructed massive mosque and red fort of Delhi. Shahjahan also created the famous Taj Mahal with a cost of 32 million rupees (in today’s value it would be 70 billion rupees). Akbar and Aurangzeb also created expansive royal camps which were no less than cities. Akbar created one in Lahore to fight Persians and Aurangzeb did it in Aurangabad to fight Marathas.

So in summary, instead of constructing any public facilities like roads or irrigation canals, Mughals used the state revenue in extravaganza based on their whims and fancies. This was in direct contrast to another major medieval state of India, Vijayanagaram. Tuluva dynasty Kings of Vijayanagaram constructed public facilities more than Palaces and tombs.

There was no scientific development of note during Mughal period. No major education centres evolved. Farmers were left to gamble on the Monsoon with no development of irrigation facility and were burdened with heavy taxation. Traders were left to fend for themselves both in terms of safety and competition from foreign imports. High level picture sometimes make an ugly scene look beautiful. Mughal period can look golden only to jaundiced eyes which do not want to look into details.

 

 
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