IJARA SYRTEM-Ugc History

IJARA SYRTEM-Ugc History

. The institution of tax-farming, performing such an essential function, was wide spread all over the Islamic world from the earliest days of Islam until the recent times, Indeed, tax-farming was known in Medieval Egypt  (Daman and Qaba1a), in Mughal India  (Ijar a) and in the Ottoman Empire  (Iltiza m). In short, it dominated the economic life of Muslims from the Atlantic to the Indian Ocean for a period of more than one thousand years!

During the 18th century ijara system became a common form of revenue assessment and collection.Ijara syrtem or revenue farming was a  feature of the revenue system mughal india.Though, as a rule Mughals disapproved of this practice, in actual fact certain villages were sometimes farmed out. Generally, these villages, when peasant did not have resources available for undertaking cultivation or where owing to some calamity cultivation could not be done, were farmed out on ijara. The revenue officials or their relatives were not supposed to take land on ijara . It was expected that revenue farmers would not extract more than the stipulatedl land revenue from the peasants. But this was hardly the case in actual practice.

The practice of ijara, it seems, could not have been very common in the zabti provinces, Gujarat and the Mughal Dakhin. In the khalisa lands also this practice was very rare. However, in the jagir lands it became a common feature. Revenue assignees (jagirdars) farmed out their assignments in lieu of a lump sum payment, generally to the highest bidders.Sometimes jagirdars sub-assigned part of their Jagirs to his subordinate/troopers.

Mughal India -The Ijara System

Although it is difficult to pinpoint the beginnings of the Indian Ija r a system ,there is evidence that in the 14th century A.D. a system of auctioning was in operation. Yet due to the frequent interference of the military the system does not seem to have operated smoothly.  Ibn Batuta gives ample details about the problems caused by military interference. (Habib and Raychaudhuri, 1982, p.72). The tax-farmer in Mughal India was subject to similar risks as his counterpart in Egypt. A failed amil usually ended up in prison. While he was imprisoned, his accounts were rigorously controlled, a process which might keep him there for years. He took such risks in return for expected profits which materialized as the difference between what he collected from the tax-source and the amount which he paid to the Jagirdar(Habib, 1963, p.233, 285). When Jagirda r s assigned their agents the authority to collect the taxes from their territory they exacted pledges from the latter concerning future collections. They, also, generally took an advance, qabd. If another person paid a higher qabd he could easily replace the first amil.  This contrasts clearly with the tax-farming system in Egypt where the  mutaqabbil, according to al-Maqrizi, appears to have enjoyed a safe tenure of four years (Morimoto, 1981, p.232). It should be clear from above that the  Jagirda r was essentially an absentee landlord. Indeed, under the Mughal regime the  Jagirdar s were frequently forced to change their locations. This compelled them to initiate the system of sub-tax-farming explained above.It is interesting to note that the Mughal rulers considered the ijara as a system of agricultural investment. This attitude is revealed from various decrees according to which abandoned villages were to be given away as ijar a, on the condition that the taxfarmer should restore them to prosperity. In short, the private entrepreneurs (taxfarmers) were expected to invest in agriculture in return for the potential surplus (Habib, 1963, p.235). Yet, this practice was the exception rather than the rule for, unlike Egypt, in India the Mughal administration did not usually endorse the tax-farming system. Consequently we cannot follow from the official documents just how widespread this system was. There is, however, no doubt that while it was quite extensively applied in the  Jagir lands it was seldom used in the Khalisa lands. We have seen so far how the ijar a system in India functioned as a system of revenue collection. Yet, it is clear that it also functioned as an instrument of resource allocation. Indeed, with the expansion of the ijar a system a massive reinvestment in the agricultural sector occurred whereby the powerful zamindar s acquired extensive taalluka t, newly purchased land (N.A. Siddiqi, p.26). An even more interesting evidence concerning the allocation of resources through the ijar a system is provided by Habib who showed that urban bankers invested heavily in the ijar a system and emerged as absentee landlords (Habib and Raychaudhuri, 1982, p.177). As in Egypt, the Indian  ija r a was not limited to agriculture only. The diamond mines of Kollur for instance, were also organized as an ija r a. In these mines some 30,000 workers were employed by capitalist entrepreneurs who farmed out small plots at private auctions to sub-contractors. The period of lease was extremely short, sometimes limited to a few days or, in extreme cases, to a few hours.