The world’s largest economy was during the Mughal era.
Mughal Empire Budget: Zahiruddin Muhammad, also known as Babur, laid the foundation of the Mughal Sultanate in 1526 by defeating Sultan Ibrahim Lodi of the Delhi Sultanate in the battlefield of Panipat. This was the first time Babur used gunpowder in battle. After Babur, his son Humayun ascended the throne, but most of his time was spent in battles.
After Humayun, Akbar took power, and the golden age of the Mughal era began. A real governance system was initiated, which included social and economic structures. Let’s find out what the Mughal economy was like, where they earned from and where they spent.
The world’s largest economy during the Mughal era, especially under Akbar’s rule, saw an increase in production in South Asia. During this period, India accounted for 28 percent of the world’s industrial production. By the 18th century, there was significant growth in the export of textiles, shipbuilding, and steel from India, and the economy became export-oriented.
By the end of the 17th century, the Mughal economy had become the largest, astonishing even Europe. Compared to the year 1600, the Mughal Empire’s share in the world economy had risen to 22.7 percent, surpassing China to become the world’s largest economy by gross domestic product (GDP). Bengal alone contributed 12 percent, making it the richest province in India at that time.
There were many types of farmers from 1526 to 1857 during the Mughal period; industrial production increased, but the economy was primarily based on agriculture.
Taxes on crops were levied during the Mughal rule, and revenue was primarily based on taxes. This was known as jama and hasil. The amount of fixed and collected tax was based on this. However, the system of tax collection was not the same for all types of land. Farmers on high-yielding land had to pay more tax.
Land under cultivation was taxed more heavily because it produced crops throughout the year. In contrast, the tax on fallow land was lower because it yielded crops for a shorter period. The tax collection system for barren land was different. One-third of the total collected tax was deposited as royal revenue.
During the Mughal era, budgets were prepared by gathering information about land and its production to determine taxes, and budgets were set accordingly. During Akbar’s reign, an order was issued that farmers should make maximum cash payments. However, the option to pay in the form of crop production was also available.
The ruler tried to keep a larger share of tax collection for himself. However, at times, tax collection was also affected due to circumstances. For instance, tax collection was disrupted during droughts or famines.
Akbar conducted land surveys during his reign to strengthen the tax system. Abul Fazl recorded land data in the Ain. In 1665, Aurangzeb also instructed his revenue department officials to prepare an annual account of the number of cultivators in each village. However, even then, wild areas were not surveyed.
New crops brought a boost to the economy during the Mughal period, with the introduction of new crops like maize, potatoes, red chili, and tobacco in India. This benefited farmers and also increased revenue for the administration. In addition to agriculture, taxes were also collected from trade. At that time, tin and copper, medicines, horses for war, and ivory were imported and exported.
During the Mughal era, the import of silver and gold increased. Trading companies established European factories in cities like Surat, Cochin, and Machilipatnam, which initiated trade between India and West Asia, East Asia, and Africa. The major goods exported from India during that period included salt, calico, dried fruits, cotton, silk, and spices.
During the Mughal era, revenue was also earned from Jizya. It was a kind of protection tax that Muslim rulers collected from non-Muslims. In the Mughal period, Jizya was essentially an annual tax system. In India, it was collected from non-Muslims, especially Hindus. However, the system of Jizya, which was initiated after Alauddin Khilji took over the rule in Delhi in the 11th century, was abolished by Akbar. After that, it remained banned during the reigns of Jahangir and Shah Jahan. Nevertheless, during Shah Jahan’s reign, the Mughal economy reached its peak.
However, Aurangzeb, who took power after Shah Jahan, reimposed it in 1679. Still, this tax was not collected during times of disaster. Additionally, Jizya was not collected from women, children, the elderly, the disabled, the sick, the unemployed, and Brahmins.
During the Mughal era, the taxes collected were used to manage the administration. Expenses were incurred in items like donations, salaries, and pensions, and a significant amount was also spent on wars to expand the empire or suppress rebellions. The military expenses were therefore high. The expenses for the rulers’ luxuries were also covered from this. To secure the state, forts were built in various places. The highest expenditure on construction occurred during Shah Jahan’s reign. From the construction of the Red Fort in Delhi, Jama Masjid, to the Taj Mahal in Agra, Shah Jahan spent lavishly on the construction of the Takht-e-Taus as well.
