Baji Rao I and His Debt-Ridden Finances (1720–1740 AD): History, Causes and Impact

 Baji Rao and His Debt Ridden Finances (1720-1740 A.D.)

Dr. Nupur Roy*

Abstract

Baji Rao is remembered as one of the most capable war generals of India. Marathas were able to achieve new heights of political success during his Peshwaship (1720-40). It is said that even a mention of his name was enough to bring shiver to his enemies, be it Mughal or other powers. Though a great fighter and successful leader, Peshwa had a lacuna in his otherwise brilliant military career, which was his financial condition. Baji Rao died sunken in huge piles of debt which he could not repay during his life time. This paper is an attempt to explore the cause and effect of pathetic state of economic affairs during his regime. It also attempts to prove that deficit state of Deccan coupled with jagirdari crisis created impossible conditions for Baji Rao. In a way socio-economic and structural conditions between 1720 and 1740 were more of the malefactor than the person himself.

Keywords: Baji Rao, Economy, Deficit, Debt, Deccan.

Introduction

Maratha contest for independent state has been painted in different colours by various scholars. Some consider it as a mere mercenary culture and a bid for survival of small Maratha bands. The Marathas, as active participants in this military economy evolved a military culture that was responsive to market forces. It probably began with small Maratha warrior bands that had a societal predisposition to organizational adaptability and military survival. Here Cooper does not give any credit to Marathas other than being mercenaries fighting for money. On the other hand there are scholars who consider them as Deccan's patriots fighting for swarajya. Deccan of seventeenth century was theatre of ceaseless fighting, plunder and famine. Then came a stage when was nothing to be looted or captured. It was during these turbulent times that Baji Rao was sworn in as new Peshwa by Shahu Raja in 1720. Ambitious and energetic Peshwa deployed a vast army to beat his enemies. In his twenty years of career, Baji Rao never lost a battle except one on the financial front, as he got himself under massive debt. The modest effort of this paper is to explore those causes inherent in basic structural economy responsible for his indebted condition. Used appropriately, strategic debt is not a waste of money, but rather, an opportunity to increase the likelihood you will be able to accomplish your goals in the short, medium, and long term. This paper will explore and analyse economic crisis in medieval India and its impact on Peshwa Baji Rao's financial bearing.

History of the Maratha Economy since Times of Shivaji (1627-1680 A.D.)

The western edge of the Deccan plateau is subject to a low and uncertain rainfall, cultivation is poor and precarious, and it is only along the narrow margins of the few rivers that the peasant is assured of a good return for his labour. "Maharashtra as a state seems to have emerged with the rise of the Satvahana power in the centuries before the Christian era. The early farming communities lived in small self-sufficient villages and their mixed economy was based on subsistence agriculture, stock raising and hunting-fishing.

The initial rise of the Maratha power under Shivaji had depended entirely on the possession and control of some two hundred forts; and the unwalled Peshwa cities grew under the shelter of hill forts which still remained the only military strongholds. Besides land revenue, Chauth and Sardeshmukhi were also the source of income of the empire. It was suggested that a promising cultivator should be given money to equip himself for agricultural operations and that this money should be recovered in easy instalments and according to the convenience of the cultivator.

Cultivators who had deserted their villages were convinced to return. The past arrears of such persons were written off, and their present rents were fixed after considering each case on its merit. Thus the source of revenue were, broadly speaking, land revenue from the chali lands, the mokas-bab and gadapatti, the inam villages given by various chiefs such as the Nawabs of Savanur, the Deshpande of Nagnur, the Desai of Gadag, the Saranjams of the Patwardhans, the Zakat dues, deskat dues, dues from garden lands and the like. All the principal Mahratta officers had, as a further means of preserving intercourse and union, particular claims assigned to them on portions of revenue, or on whole villages in the districts of each other. 10

The Konkan possessed many flourishing trading centres during the period of Shivaji. Chaul, Dabhol, Kalyan, Bhivandi, Vengurla, Pen, etc. have been frequentlyreferred to as prosperous commercial and industrial centres in the Factory Records of the East India Company. "Thus Shivaji actively encouraged not only agriculture but trade and commerce also in his kingdom. Unfortunately in next 20 years, Maratha economy was in such a miserable condition that Baji Rao Peshwa had to live and die under its enormous debt pressure.

Baji Rao and His Inheritance

By the end of seventeenth century the state that Shivaji had created ceased to exist. The Mughals controlled almost all of the major forts in Maharashtra and much of the countryside. They had begun assigning land in jagir grants for the maintenance of troops, as they had done in the conquered areas of Bijapur and Golconda. "Surplus revenues from the new provinces would flow northward to enrich treasuries in Delhi and Agra. Instead, the reverse occurred. Aurangzeb remained in the Deccan, year after year, fighting an endless war and hoping to reverse a descending spiral of public order and imperial power in that region."

It was under such hostile conditions that Baji Rao was born in August 1700. After death of his father Balaji Vishwanath, Baji Rao was awarded Peshwaship in 1720 by Shahu Raja. The new Peshwa proved to be a great military genius. Unfortunately he had to live under grave financial strain and debt. This pressure is quite evident from those letters which he wrote to his brother Chimaji Appa and Swami Brahmanand. In a letter to Chimaji Appa, Baji Rao writes 'Do what is essential to earn money and pay off debts. "The Peshwa was also strapped for funds. Explaining that a salary of five rupess has to be paid in the Konkan against three on the plateau, the Peshwa wrote to Purandare, "I cannot take debts to run the campaign. If the master provides funds, I will stake my life to gain success in the campaign."

Baji Rao writes in one of his letters 'I have repaid from who I borrowed. I will repay. But the debts have drowned me. It was better to lose my life instead. He died at a young age of 39. "He died as he had lived", says Sir Richard Temple, "in camp, under canvas among his men, and he is remembered to this day among Marathas as the fighting Peshwa or the incarnation of Hindu Energy." What could possibly cause such financial despair and urgency for a person who had won maximum number of wars for Maratha Empire? Different authors have provided different notions for this ironical circumstance. This paper would evaluate some of these concepts to examine whether one of these were true or not.

Government expenditures include spending on goods, services and transfers at the federal, state, and local levels. The difference between spending and taxes is the government deficit or surplus." Baji Rao did not have a positive financial status. Actually it was a bad one and gradually he landed himself in such a nasty debt trap from which more he tried to extricate himself more in went deeper in the trap.

Grant Duff who was earliest to compile and write on this subject concludes that Baji Rao was under huge burden of debts because he wanted to outbid the Nizam to get the best soldiers of the Deccan to join him. Bajee Rao owing to the vast army he had kept up, both to secure his conquests, and to overcome his rivals, had become greatly involved in debts." There are two counter arguments against this statement of Duff: one is that Peshwa mostly fought wars which were not direct but adopted tactics to surround the enemy, cut off the supplies and starve them. The strategy of cutting off supplies and swift movement had crushed the Nizam's far superior artillery. Secondly during his 20 years of career as Peshwa, Bajirao was constantly fighting not only with Nizam but also with Mughals, Siddis or various semi-independent states. So it is not just the Nizam but a mix of all his campaigns which probably got him indebted. The first and foremost goal of Baji Rao was to consolidate the Maratha empire and biggest enemy in his path was none other than the astute Nizam-ul-mulk who was Mughal viceroy of Deccan but later on carved out a separate state for himself, though he never gave up the pretence of acceptance of Mughal suzerainty in his life.

Though in the beginning years of 1920s, Nizam ostensibly held diplomatic channels open with Baji Rao but in reality he never left his cunning designs over Marathas. It is necessary to look into some of the major interactions between Baji Rao and Nizam to understand opinion of Duff on this subject. On 4 January 1721, the two giants, Baji Rao I and Nizam-ul-Mulk, came face to face with each other at Chikhalthan, and held a diplomatic meeting with a view to arriving at some understanding between them. The youthful Peshwa dared to meet his political adversary in the Mughal army camp itself, undauntedly and to the great bewilderment of the Nizam. On 18 May 1724, Nizam-ul-Mulk himself sought a meeting with the Peshwa Baji Rao I at Nalcha, near Dhar, both 'pofessed friendship without revealing their real intentions. However inevitable bloody encounters were awaited between the two in coming years. The Nizam-ul-mulk-Baji Rao confrontation in 1727-28 occupied the entire territory of Maharashtra, Khandesh, and parts of Gujrat." Nizam attacked Pune to surprise Marathas but Baji Rao surprised Nizam by raiding latter's territory along Godavari tract. The Nizam retreated to his own dominions and confronted the Peshwa's vast army in battle array in the hilly tract of Palkhed, situated at a distance of about 32 kms from Aurangabad near the Godavari."

Pissurlencar reveals that the strife between the Marathas and the Portuguese in Bassein began during the reign of this king (Sahu). The Marathas began to demand a number of concessions from the Portuguese, but the latter only gave way on some. Treaties, big and small, were made and violations led to revised and new versions. In 1723 a Maratha invasion of Portuguese Bassein led to temporary peace in 1724 and 1728. Whatever brief respite came from the 1728 armistice was soon put into disarray by a series of incursions and counter-incursions by the Marathas, as well as the Portuguese. Battle of 1737-39 ended with victory of Vasai by Marathas and declaration of Peace thereafter.

On 30 March, about eight thousand Mughal troops commanded by Mir Hasan Khan led an attack on the Maratha camp but were repulsed with heavy losses. Baji Rao's northern campaign left Mughals totally terrified and Peshwa returned home jubilantly.

Table: Major Battles of Baji Rao (1720-40)

Source: Compiled from Data Provided by James Grant Duff in His Book A History of the Mahrathas

So, Peshwa Baji Rao was constantly in war, not just with Nizam but virtually all the major powers of North-Western India. He put all his resources at stake for these wars and won each of them with his military acumen. So the argument of Grant Duff cannot be refuted completely. Truly Baji Rao must have needed funds for such extensive battles especially those bloody ones fought with Nizam. Though Baji Rao won each of them, peace treaty was hardly ever honoured by Nizam.

Like in 1732 several clauses were put forward by Baji Rao. Most of these clauses were never accepted by the Nizam. "Again in 1737 after siege of Bhopal, Baji Rao gave a crushing defeat to Nizam. Besides Malwa he also agreed to try and get fifty lakh rupees for Baji Rao from the Emperor, a promise never fulfilled.

It is worth to mention that Baji Rao had kept huge armies, with best horses and guns and considered the largest and best in whole of Hindustan." Peshwa did not get sufficient financial assistance from Shahu who according to Nizam had a comfortable going. Raja Shahu receives large collection of chauth and sardeshmukhi from the imperial Deccan."

General Economic Condition and Jagirdari Crisis: Problem at the Grass Root Level

The discussion in above pages is primarily concentrated on Baji Rao and his dismal debt ridden finances as head of Maratha army. However we have to remember that Maratha kingdom as such was not totally cut off from rest of the country, rather they were one of those semi-autonomous states which existed during Mughal India. Therefore it becomes imperative to look at the bigger picture to evaluate Mughal Economy from 1680 to 1740. Mughal India had more or less stabilized as Shahjahan ascended the throne in 1628 but then clouds of jagirdari crisis forced him to take some harsh measures against jagir distribution. In the second place, the king, as proprietor of the land, makes over a certain quantity to military men, as an equivalent for their pay; and this grant is called jah-ghir, or, as in Turkey, timar, the word jah-ghir signifying the spot from which to draw, or the place of salary.

Under Shah Jahan, a five-month jagir became fairly normal, thus impairing the efficiency of the cavalry. The reduced number of sawars weakened the ability and willingness of the Mughal faujdars to give adequate support to the jagirdars in the task of collecting their share of land revenue." Aurangzeb's attempt to introduce into the Deccan the system of administration which had been developed by the Mughals in north India and his efforts to induct Deccani nobles and Maratha sardars in the nobility after 1687 deepened the agrarian crisis. The person thus put in possession of the land, whether as timariots, governors, or contractors, have an authority almost absolute over the peasantry, and nearly as much over the artisans and merchants of the towns and villages within their district; and nothing can be imagined more cruel and oppressive than the manner in which it is excercised. "While trade and industry, including foreign trade continued to expand in India during the reign of Aurangzeb, agriculture seems to have stagnated in

large areas, leading to a growing crisis of financial resources, and pressure on a section of the cultivators,

As the ground is seldom tilled otherwise than by compulsion, and as no person is found willing and able to repair the ditches and canals for the conveyance of water, it happens that the whole country is badly cultivated, and a great part rendered unproductive from the want of irrigation.

Some Other Roots of Economic Strain

The uncertainty of rains, constant warfare, lack of credit facilities, burden of taxation and many other factors contributed towards the backwardness of agriculture and the agriculturists. To aggravate the situation, Deccan was constantly the theatre of incessant wars among various parties like: Mughals, Marathas, Nizam and other Deccani states. It is become a proverbial saying, that the Deccan is the bread and support of the soldiers of Hindostan." While Baji Rao was constantly in debt, many working under his command, succeeded in amassing huge wealth. Under Baji Rao he had distinguished himself both in arms and in business and had been appointed by that Peswa diwan to Ranoji Sindia. While the latter remained poor, Ramchandra Malhar Shenvi amassed a large fortune.

Fort maintenance was another major costy liability for Peshwa: "It is evident that these forts, if kept up, must be extremely expensive, both in garrisons, provisions, and repairs; and if merely abandoned by us, would be liable to be occupied by insurgents or hill banditti, and being almost all exceedingly strong might require a regular army to reduce them....""Shivaji's policy of plunder and Aurangzeb's insatiable thrust for Deccani land dried up resources of Deccan. Maharashtra was not a rich region, and state depended on fluctuating source of revenue like Chauth, Sardeshmukhi." It was this legacy which Baji Rao inherited: a famished peasantry and ruined state.

Another theory which can explain perpetual indebtedness of Baji Rao can be understood from the perspective of Yadunath Sarkar. According to him it was lack of business administration which was responsible for their broken state of finances. He writes "The chief defect of the Marathas, which has disastrously reacted on their political history, is their lack of business capacity. This race has produced no great banker, trader, captain of industry, or even commissariat or contractor. Hence, on the economic side, in the broadest sense of the term, the Maratha administration was very weak. "Thus, when Peshwa Baji Rao died in 1740, he left a debt of Rs 14.5 lakh which had been taken from thirty mahajanas@ at Re 1/- to Rs 21/2 per cent!2

Actually the remarkable thing about the statement "one has to pay one's debts" is that even according to standard economic theory, it isn't true. A lender is supposed to accept a certain degree of risk. Baji Rao took his share of risks and so did his lenders!

Conclusion

Baji Rao did not have to die with immense amount of loan if his chief adversary Nizam-ul-Mulk had paid the promised war indemnity. Also due to deficit state of Deccan and Jagirdari crisis Baji Rao could not acquire that kind of earnings from stipulated land area as well. It is not expenses which got him indebted but lack of income from dried up state of Deccan.

References

1. Cooper, Randoff G.S.: The Anglo-Maratha Campaigns and the Contest for India: The Struggle for Control of the South Asian Military Economy, Cambridge Press, U.K., 2003, P.16

2. Anderson, Thomas J.: The Value of Debt in Building Wealth, Wiley, New Jersey, 2017, P. 14

3. Sarkar, Yadunath: Shivaji and his times, Orient Blackswan Publishers, New Delhi, 1952, P.2.

4. Kosambi, Meera: 'Colonial Urban Transformation in Maharashtra', in Region, Nationality and Religion, (ed.) Kulkarni, A.R. and Wagle, N.K. Popular Prakashan, Mumbai, 1999, P.42

5. Ibid., P.33

6. Nayak, Ganeswar: 'Socio-Cultural and Economic History of Medieval India, DDCE/M.A HIST./Paper-22, PP.217-218

7. Kulkarni, A.R.: Studies in Maratha History, Diamond publication, Pune, 2008, P.16-17

8. Ibid.

9. Chitnis, K. N.: Glimpses of Maratha Socio-Economic History, Atlantic Publishers, New Delhi, 1994, P.35

10. Grant, Duff James: A History of the Mahrattas, First published 1826, P.461

11. Kulkarni, A.R.: Op. Cit., PP.18-19

12. Stewart Gordon: The Marathas (1600-1818), Part 2, Volume 4, Cambridge University Press, New York, 1993, P.98

13. Richards, John F.: The New Cambridge History of India (The Mughal Empire), Cambridge University Press, UK, 1995, P.225

14. Sardesai, G.S.: Selections Peshwa Daftar, Vol. 13.23, 1933

15. Kulkarni, Uday S.: The Era of Baji Rao, Multa Mutha Publishers, Pune, 2017, P.173

16. Parasnis DB, Brahmendra swami charitra and patravyavahar, letter 30, 1900

17. Edward James Rep; son, Burn, Sir Richard: The Cambridge History of India, Volume 3, P.407

18. Samuelson, Paul A: Economics, Tata Mc Graw-Hill Education, New Delhi, 2010, P.379

19. Grant, Duff James: Op. Cit., P.528

20. Mehta, Jaswant Lal: Advanced Study in the History of Modern India (1707-1813), New Dawn Press, New Delhi, 2005, P.93

21. Ibid, P.95

22. Kulkarni, Uday S.: Op. Cit, P.102

23. Ibid., PP.96-97

24. Portuguese Studies Review, Vol.16, No.2, edited by PSR, ISSN-1057-1515, Sim Yong Huei, 'War and Diplomacy in the Estads da India (1707-50)', Baywolf Press, 2008, PP.52-53

25. Ibid., PP.53-54

26. Mehta, Jaswant Lal: Op. Cit., PP.116-117

27. Kulkarni, Uday S.: Op. Cit, P.163

28. Ibid., P.256

29. Srinath, Menon: Significant Battles of Indian History, 2016, P.39

30. Kulkarni, Uday S.: Op. Cit., P.114

31. Ibid.

32. Chandra, Satish: Essays On Medieval Indian History, Oxford Press, New Delhi, 2003, PP. 133-134

33. Bernier, Francois: Travels in the Mogul Empire (A.D. 1656-1668), Oxford University Press, 1916, P.225

34. Chandra, Satish: Op. Cit, P.133

35. Bernier, Francois: Op. Cit, P.226-227

36. Kulkarni, A. R.: Op. Cit, P.14

37. Bernier, Francois: Op. Cit, P.215

38. Kincaid, Charles: A History of the Maratha People, Oxford University Press, New Delhi, 2015, P.317

39. Kosambi, Meera: 'Colonial Urban Transformation in Maharashtra', in Region, Nationality and Religion, Op. Cit., PP.33-34 6201499806

40. Nayak, Ganeswar: Op. Cit., P.237

41. Sarkar, Yadunath: Op. Cit., P.10

42. Chandra, Satish: Op. Cit., P.96

43. Graeber, David: Debt: The First 5000 Years, Penguin Books, P.4