Fiscal and Monetary System, Prices in Mughal India

Fiscal and Monetary System, Prices in Mughal India

History Optional Notes {PDF}

Complete Notes Package (Paper I & II) | 4500+ Pages | Instant Download

Discounted Price | Buy Now @ ₹1,180 →

While land revenue remained the single most important source of income for the Mughal Empire, the state also drew on a range of other fiscal instruments, ran one of the most sophisticated currency systems of its time, and left behind valuable data on the movement of prices across the 16th and 17th centuries. This article examines these three dimensions in turn: the non-land-revenue taxes and the machinery built to collect them, the tri-metallic coinage system and the mints that sustained it, and the price trends — for metals, food grains, and cash crops — that shaped production and trade in Mughal India. Contemporary sources, it must be noted, provide far more detailed information on land revenue than on these other subjects, where the evidence is comparatively sketchy and brief.

Fiscal System

• It is very difficult to ascertain the exact share of taxes other than land revenue in the total income of the Empire.
  • Shirin Moosvi has calculated this share at around 18% and 15% for the subas (provinces) of Gujarat and Agra respectively, while in the rest of the subas it was less than 5%.
• The discussion that follows confines itself to what these taxes were and the mechanism used to collect them, rather than their precise rates.

1) Taxes Other Than Land Revenue

• The main sources of non-land revenue were tolls and levies on craft production, market levies, customs, and rahdari (road tax) on both inland and overseas trade, along with mint charges. In addition, the state treasury received large sums through war booty, tributes, and gifts from various quarters.
• Almost everything sold in the market was taxable, the principal articles taxed being cloth, leather, food grains, and cattle, with a tax due every time merchandise changed hands. Precise rates of taxation are hard to establish, but general accounts suggest these taxes were quite harsh.
  • Peter Mundy (1632) complained that the governor at Patna was harsh in realising taxes, sparing not even women selling milk.
  • Another contemporary writer noted that every trader — from the rose-vendor to the clay-vendor, from the weaver of fine linen to that of coarse cloth — was required to pay tax.
  • Besides merchants, artisans too paid taxes on their products: katraparcha was levied on all varieties of cotton, silk, and wool cloth, while indigo, saltpetre, and salt were other important commodities subject to taxation. In Punjab, for instance, the tax on salt during Akbar’s time was more than double its prime cost.

Customs and Transit Dues

• A tax was levied whenever goods were moved from one place to another, and some information survives on the rate of these customs.
  • All merchandise brought through the ports was taxable. Abul Fazl states that during Akbar’s time the duties did not exceed 2.5%.
  • One early 17th-century account suggests that at Surat, charges stood at 2.5% on goods, 3% on provisions, and 2% on money (gold and silver); by the close of the 17th century, customs ranged between 4 and 5%.
  • Aurangzeb levied separate transit taxes for different communities — 2.5% from Muslims, 5% from Hindus, and 3.5% from foreigners — applicable throughout the Empire, with articles valued below 52 rupees exempted. For a time, Aurangzeb exempted Muslims from all customs dues altogether, before reimposing the 2.5% levy after a short period.
  • Despite imperial instructions, merchants were frequently charged more than the prescribed customs, and foreign merchants often complained of this.
    • The English, in 1615, complained that three separate duties were collected on goods brought from Ahmedabad into Surat.
    • The English and the Dutch repeatedly obtained farmans exempting them from customs, yet were still made to pay duties at the custom-houses.
  • Beyond Mughal territory, autonomous chieftains too levied customs and duties on goods passing through their lands. As Moreland observes, it is impossible to define the burden on commerce in quantitative terms, since anyone could claim a tax of any amount, even on goods that had already paid taxes in an adjoining jurisdiction.
• Apart from customs, a separate tax called rahdari, or transit tax, was collected — a road-toll levied on goods passing through various territories.
  • Though the charge at any single point was small, the cumulative burden across a long route became heavy. Even zamindars collected tolls on goods passing through their territories.
  • According to one 17th-century account (Khafi Khan), rahdari was technically considered illegal, yet large amounts were nonetheless collected from merchants and traders — including on river routes.

Income from Mints

• The tax generated at the mint formed another source of income for the Empire, known as the state mint-fee or mahsul-i darul zarb.
  • The charge amounted to around 5% of the value of the money minted. Two further charges were also collected: rusum-i ahlkaran (perquisites of officials) and ujrat-i karigaran (wages of artisans).

2) Mechanism of Collection

• As with land revenue, a well-organised machinery existed for the collection of these other taxes, with the state making a deliberate effort to keep separate accounts for income from land revenue and from other taxes.
  • For this purpose, taxes were classified under two heads — mal o jihat, relating to land revenue, and sair jihat, relating to taxes on merchandise and trade.
  • For ease of assessment and collection, separate fiscal divisions called mahalat-i sair or sair mahals were created in the larger cities and towns. The mahal was a purely fiscal division, distinct from the pargana, which functioned as both a revenue and a territorial unit.
    • The Ain-i Akbari provides separate revenue figures for towns and sair mahals for places such as Ahmedabad, Lahore, Multan, and Broach; in the case of Bengal, market dues are separately recorded in the A’in as well. Most 17th-century revenue tables likewise list sair mahal figures for each town separately.
    • For example, the list given for Surat contains revenue mahals such as mahal farza, mahal khushki, mahal namakzar, mahal chabutra-i kotwali, mahal dallali, jauhari wa manhari, mahal darul zarb, mahal ghalla mandi, and mahal jahazat.
  • These revenue districts were either assigned in jagir or had their collections sent directly to the state treasury. Except for custom houses and mints, most officers responsible for tax collection carried the same designations as land-revenue officials — amin, karori, qanungo, and chaudhari.
• Ports, however, had a distinct set of officials.
  • The mutasaddi was the chief official or superintendent of the port, directly appointed by the Emperor and responsible for tax collection; the rates of commodities in the market were fixed according to prices settled by merchants at the custom-house.
  • The mutasaddi was assisted by several officials who helped with valuation, realisation of custom dues, and maintenance of accounts — including the mushrif, tahwildar, and darogha-i Khazana — all directly appointed by the court, along with a large body of peons and porters attached to the custom-houses.
• In the absence of adequate data, it is difficult to calculate the net amount collected through these taxes, though Shirin Moosvi has estimated their share at around 10% of the total income of the state.

Currency System

1) Mughal Coinage

The Mughals possessed a well-organised and sophisticated monetary system, with imperial coinage unprecedented both in quantity and in quality. Credit for first attempting a coinage free of debasement goes to Sher Shah, though it was under Akbar that the currency system fully matured. The Mughal Empire operated a tri-metallic currency — gold, silver, and copper — maintained with a high level of purity and uniformity across the vast empire, with the silver coin forming the base of the entire fiscal and monetary system.

Silver Coin

• The silver coin had a long pre-Mughal history, having been used during the Delhi Sultanate for long as the tanka.
  • Sher Shah was the first to standardise the silver coin, naming it the rupaya, with a weight of 178 grains (troy); an alloy kept below 4% of the coin’s weight was added for minting purposes.
  • Akbar continued the rupaya as the basic currency at more or less the same weight, while under Aurangzeb its weight was increased to 180 grains (troy).
  • The silver rupaya remained the main coin used for business and revenue throughout the period.

Gold Coin

• The Mughals also issued a gold coin called the ashrafi or mahr, weighing 169 grains (troy).
  • This coin was not commonly used in commercial transactions; it was mainly employed for hoarding and for giving as gifts.

Copper Coin

• The most common coin for small transactions was the copper dam, weighing around 323 grains.
  • Its weight was reduced by one-third during Aurangzeb’s reign, presumably owing to a shortage of copper.

Other Coins

• Kauris (sea-shells): Used for very petty transactions, chiefly in coastal areas, and brought mainly from the Maldive islands; around 2,500 kauris equalled one rupaya.
• Mahmudis: A long-standing silver coin of Gujarat, which continued to be minted and used there for commercial transactions even after the establishment of Mughal rule in the region.
• Hun or pagoda: A gold coin used in the Vijayanagar Empire; after its disintegration, circulation continued in the kingdoms of Bijapur and Golkunda.
• Tanka: An alloy of copper and silver in use across many Deccan kingdoms; following Mughal expansion into the Deccan, several mints were established there to produce Mughal silver coins.
• Ilahi and Shahanshah: Gold coins introduced by Akbar.
• Jalali: A silver coin introduced by Akbar.
• Alamgiri: A silver coin introduced by Aurangzeb.
• Zodiacal coins: Issued by Jehangir, this was a series of twelve coins, each depicting one zodiac sign, struck in both gold and silver; these were preserved rather than circulated.
• Heavier gold muhrs: Jehangir also issued unusually heavy gold muhrs, ranging from 4–5 kg up to a maximum of 12 kg, again intended for preservation rather than circulation.

Exchange Value of Coins

• The exchange value of gold, silver, and copper coins fluctuated constantly, depending on the supply of these metals in the market.
  • The silver value of gold fluctuated throughout the Mughal period, ranging from 10 to 14 rupaya for one gold coin.
  • For copper, taking 1595 as the base year, Irfan Habib shows that the price rose to 2.5 times by the early 1660s, fell back to double the 1595 level by 1700, and rose again to the 1660s level by 1750.
  • For transaction purposes during Akbar’s period, 40 copper dams were considered equal to one rupaya; after his death, as the price of copper appreciated sharply, this ratio could no longer be maintained.
  • Since land revenue assessments and calculations were done in dams, it became necessary to treat the dam as a notional fractional unit of the rupaya. Silver coins of small denomination, called ana, were also in use — one ana being one-sixteenth of a rupee.

2) The Minting System

• The Mughals operated a free coinage system, under which anyone could bring bullion to the mint to have it coined. However, the state alone held the authority to issue coins, and no private individual could do so; strict standardisation was maintained to ensure the purity of coinage.
  • A large number of mints were established throughout the Empire, with efforts made to locate them in major towns and ports so that imported bullion could be brought to them easily.
• Each coin carried the name of the issuing mint, the year of minting, the ruler’s name, and, in most cases, a portrait of the king — one particularly unique example being the image of Ram and Sita on a gold muhr of Akbar. Coins also usually carried the Kalima, a practice that was abandoned by Aurangzeb.

Loss in Value with Time and Weight

• A newly minted coin, issued in the current or preceding year, was called taza sikka; coins issued and circulating during a reigning emperor’s rule were termed chalani (current), while those minted in earlier reigns were called khajana.
  • Barring the taza sikka, all other coins were subject to reduction in value: around 3% was deducted if a coin had been in circulation for more than a year, and 5% if for more than two years.
• A further deduction was applied on account of loss of weight over time.
  • Abul Fazl notes that if the loss of weight was less than one rati, it was to be overlooked and the coin treated as standard; a loss between 1 and 2 ratis attracted a 2.5% deduction, while a loss exceeding 2 ratis meant the coin was treated merely as bullion.
  • Although the state prescribed these deductions in principle, in actual practice arbitrary deductions were decided by sarafs (money-changers) depending on prevailing market conditions. As Moosvi notes, the reminting of imported coins into Mughal money helped keep the wheels of exchange turning smoothly.

Working of Mints

• Anyone wishing to have money minted brought bullion or old currency for reminting to a mint, where the quality and purity of the metal were scrutinised before the new currency was minted and delivered to the concerned person.
  • A specific charge, amounting to around 5.6% of the bullion minted, was levied as minting charges.
• The minting process involved a substantial body of personnel and craftsmen.
  • The mint was headed by an officer called the darogha-i-darul zarb, responsible for overall supervision, assisted by several officials, skilled artisans, and workmen:
    • The sarraf, employed as assessor, judged the purity, weight, and age of coins and fixed deductions on their value.
    • The mushrif maintained accounts, while the tahwildar kept records of daily profit and held coins and bullion in safe custody.
    • The muhr kan (engraver) engraved and prepared dyes, and the wazan kash (weightman) weighed the coins.
    • Artisans such as the zarrab (coin maker) and sikkachi (stamper) carried out the actual minting.
• The output of mints depended on the size of the mint and the level of commercial activity in the area where it operated.
  • By the close of the 17th century, the output of the Surat mint was estimated at around 30,000 rupaya per day.
  • Aziza Hasan, studying the pattern of coin issue across the 16th and 17th centuries, found that the total rupees in circulation in 1639 were three times that of 1591; this figure declined thereafter, reaching double the 1591 level by 1684, before rising again to three times the 1591 level by 1700.

Location of Mints

• Abul Fazl provides a list of mints in the Ain-i Akbari, noting that copper coins were issued by forty-two mints, silver coins by fourteen, and gold coins by four; by the end of the 17th century, the number of mints issuing silver coins had grown to forty.
  • Important mints included Delhi, Agra, Lahore, Surat, Ahmedabad, Patna, and Jaunpur.
  • P. Singh, compiling a detailed list of mints from numismatic sources, found that a large number of mints appearing on coins are not mentioned in either the A’in or other literary sources.
• Taken together, this evidence suggests that the Mughals established a monetary system that was, in many respects, remarkably modern in nature.

Prices

• Prices for a large number of commodities are recorded in the Ain-i Akbari, generally relating to the Agra region around the end of the 16th century. For the subsequent period, no systematic records survive for comparison, and the 17th-century price data available pertains to different areas of the Empire in different years — making it difficult to trace a definite trend in the movement of prices of various commodities across the Mughal period as a whole.
• Irfan Habib has closely studied price movements during the 16th and 17th centuries; the account below summarises his findings.

Gold, Silver, and Copper

• Around the 1580s, the value of gold to silver stood at 1:9; by the 1670s, after various fluctuations, this had risen to 1:16, before falling back to 1:14 by 1750.
• The price of copper coins likewise rose by 2.5 times from the end of the 16th century to the 1660s, fell back to double the 16th-century level by 1700, and rose again to the 1660s level by 1750.

Agricultural Produce

• Analysing the prices of food grains is complicated by their considerable fluctuations and regional variations.
  • Prices depended on which food grains were cultivated in a given region, and varied further according to the level of production in a particular year — so that the same commodity could show large price differences at two places at the same time, depending on how far it had been transported from where it was grown.
• The A’in records the following prices for select food grains:

• Food grain prices doubled between 1595 and 1637; between 1637 and 1670, the further increase was about 15 to 20%, so that by 1670 prices stood at 230% of the 1595 level.
  • Systematic data available for Eastern Rajasthan shows only a small increase in agricultural prices between the 1660s and 1690s, followed by a sharp rise by the second decade of the 18th century, after which prices remained at more than twice the 1690s level.

Sugar and Indigo

• Sugar and indigo were the two widely grown cash crops of Mughal India.
  • In northern India, the rise in sugar prices was negligible until 1615, after which it rose to 140% by 1630 and remained high through the 1650s; in Gujarat, the price of sugar had already doubled by 1620.
• The price movement of indigo followed separate trends for its two major varieties — Bayana indigo and Sarkhej indigo.
  • The A’in (1595) records the price of Bayana indigo at Rs. 16 per man-i Akbari, a level that held more or less steady until around the first quarter of the 17th century.
    • A sudden rise occurred in the 1630s, which declined after a short period but remained well above 1620s levels; a further sharp rise came in the 1660s, which subsequently eased but stayed at around three times the 1595 level.
  • Sarkhej indigo prices rose by 1.5 times by 1620; a sharp rise followed in the 1630s, then declined by the 1640s, though prices remained at double the 1595 level.
  • Fluctuations in indigo prices were also affected by overseas demand.

Wages

• The Ain-i Akbari provides wage figures for a large category of workers, but the absence of comparable data for the 17th century makes it difficult to establish a definite wage trend over time.
• The scattered figures available for the 17th century suggest that by 1637, wages had risen by 67 to 100% — though this evidence is too limited to support any broader conclusions.

In summary, the fiscal and monetary architecture of Mughal India reveals a state that, beyond its dependence on land revenue, built a remarkably systematic apparatus for taxing trade and craft production, maintained one of the most sophisticated tri-metallic currency systems of the early modern world, and generated price data detailed enough for historians like Irfan Habib and Shirin Moosvi to reconstruct long-term trends in metals, grain, and cash crops. Together, these systems reflect the scale, administrative sophistication, and commercial vitality of the Mughal economy.