
Best History Notes on British Conquest and economic policies in Modern Bihar for BPSC and for other Competitive Exams aspirants in 2025
History of Bihar-10
Here is a detailed explanation of the British conquest and economic policies in Modern Bihar, with special focus on the Permanent Settlement, Indigo Trade, and Opium Trade, tailored specifically for BPSC preparation.
I. British Conquest and Control of Bihar
Key Events:
- Battle of Buxar (1764): Marked the British East India Company’s full political control over Bihar and Bengal.
- British defeated the combined forces of Mir Qasim (Nawab of Bengal), Shuja-ud-Daulah (Nawab of Awadh), and Shah Alam II (Mughal Emperor).
- Resulted in the Treaty of Allahabad (1765) where the Company got Diwani rights (revenue collection) of Bengal, Bihar, and Orissa.
Administrative Changes:
- Bihar, earlier part of Bengal Presidency, came under Company rule.
- Civil and criminal administration started being handled by British officials.
- Foundation for colonial economic exploitation was laid in Bihar through revenue systems and monopolistic trade.
II. Permanent Settlement (1793)
Introduced by:
- Lord Cornwallis, through the Permanent Settlement Act of 1793, primarily in Bengal and Bihar.
Objective:
- To ensure fixed and stable land revenue for the British government.
- To create a loyal landed class (Zamindars) responsible for tax collection.
Key Features of Permanent Settlement:
Feature | Description |
Zamindars | Recognized as proprietors of land, responsible for tax collection. |
Fixed Revenue | Land revenue fixed permanently with the government (did not change even with rising productivity). |
Hereditary Rights | Zamindars could pass land to heirs; loss of land if revenue unpaid. |
No State Interference | British did not interfere in peasant rights or cultivation practices. |
Consequences in Bihar:
- Exploitation of Peasants:
- Peasants (ryots) faced high rents, evictions, and forced labor (begar).
- No rights were given to the cultivators.
- Rise of Absentee Landlords:
- Many zamindars did not reside in their estates and neglected agricultural development.
- Agricultural Backwardness:
- With no incentive to invest, agricultural stagnation continued.
- Peasant Unrest:
- Set the stage for frequent agrarian revolts (e.g., Santhal Rebellion, Pabna Movement).
III. Indigo Trade in Bihar
Background:
- Indigo (Neel) was a plant-based dye in high demand in European markets (esp. textile industry).
- British forced Indian peasants in Champaran, Tirhut, and parts of north Bihar to grow indigo.
System of Cultivation:
- Tinkathia System:
- Peasants were forced to grow indigo on 3 kathas out of every 20 kathas of land (approx. 15%).
- This land was often the best portion, affecting food production.
- Advance Loans (Dadon):
- Planters gave small loans to peasants in return for compulsory indigo cultivation.
- Led to debt bondage and exploitative contracts.
- European Planters:
- Set up indigo factories (Neel Kothis); enforced contracts through coercion and support from British administration.
Effects:
- Soil depletion due to repeated indigo cultivation.
- Peasant resentment and poverty.
- Set the stage for Champaran Satyagraha (1917) led by Mahatma Gandhi, the first civil disobedience movement in India.
IV. Opium Trade in Bihar
Background:
- Bihar (especially Patna, Arrah, and Gaya) was a major center of opium cultivation and trade.
- British monopolized opium trade through state factories.
- Opium was exported primarily to China, creating the Anglo-Chinese opium trade.
Trade Mechanism:
Stage | Details |
Cultivation | Peasants forced to grow opium poppy on part of their land. |
Government Monopoly | Farmers sold opium at fixed low prices to the government; no private trading allowed. |
Opium Factories | Major factory at Gulzarbagh (Patna) processed raw opium into cakes for export. |
Export | Opium sent via Calcutta to China, causing the Opium Wars. |
Consequences:
- Economic hardship for farmers due to coercive pricing and crop restriction.
- Diversion of land from food grains to cash crops, leading to famine-like conditions.
- Rise of illicit opium trade.
- Fueled China’s opium addiction, leading to global condemnation.
Summary Table: British Economic Policies in Bihar
Policy/Trade | Year/Period | Key Features | Consequences |
Permanent Settlement | 1793 | Fixed land revenue; Zamindari rights | Peasant exploitation; agrarian unrest |
Indigo Trade | 18th–19th c. | Tinkathia system; forced cultivation | Champaran Satyagraha (1917) |
Opium Trade | 18th–19th c. | State monopoly; export to China | Food insecurity; economic exploitation |

Buxar in action