Book Review: A Study in Nepali Economic History 1768 – 1846


Classical work on the 18th and 19th century economic history of Nepal is found in Mahesh Chandra Regmi’s work “A Study in Nepali Economic History 1768-1846”. A Study of Nepali Economic History is one of Regmi’s pioneering work as well as on economic history of Nepal. The book is based on the historical documents such as royal decrees, orders, letters, legal code and previous account on Nepal written by foreigners. Basically, book is based on archival research.

The book begins by giving brief account of geographical and political division along with Gorkha kingdom in 18th century along with the objective of the conquest and failure to achieve national integration in the first chapter. Regmi argues that main objective behind political unification of Nepal is to gain the economic benefit as his (Prithivi Narayan Shah’s) military campaigns was to gain territory in the Tarai as well as monopolize the trade routes between India and Tibet. Similarly, his argument regarding failure (Shah rulers) to achieve national integration was lack of administrative (including revenue collection), political and judicial uniformity. Administrative boundaries were made according to the boundaries of displaced principalities, displaced Rajas were restored as vassals state, and internal autonomy was provided to Limbus showed that there was diversity or disparity in function of state. Hence, Regmi argues that the sense of belongingness as one nation was not possible at that time.

Second chapter provides information on the economic background of pre-unification period where Regmi briefly describes economic resources (such as land, forest/timber and mines; trade and commerce; land tenure and taxation; and unpaid labour), use of money, and administrative system (land holding rights – Raikar, Birta, Guthi and Kipat; and village headman and other functionaries). Third chapter is very important in terms of knowing how was it possible for small and weak kingdom like Gorkha to unify Nepal. For Gorkha kingdom, Birta and jagir are the bedrock of administrative and political set-up. Birta grant was of considerable significance in organizing the foundations of the new political authority and administration. Birta were made to the leading families of the nobility to get their personal loyalty and support in implementing government policies. Where as jagir land were provided to nobility, civil and military service holder in the absence of cash salary. As the land was major source of livelihood and with jagir land, one can get certain privileges over common villagers such as collect revenue, right to dispense justice and extract unpaid labour. This policy of land tenure supported in continuing campaign of conquest. Revenue and taxation in chapter four provides several types of tax and levies collected by royal palace, government and local Birta or Jagir owners and village headman (Subba, Rai or Chaudhari). According to Regmi, the main objective of fiscal policy was to maximize the revenue. Commoner at that time had to pay several forms of tax including free labour to the palace, government and village headman. There was no formal account of how much revenue was collected (only estimation made by Kirkpetrick and Regmi himself can be found in the text) and how much were misused by headman and authorities. Regmi came to know about the misuse of revenue from the complaints filed against these authorities from various parts of the country.

Chapter five and six gives the picture of state relationship with the peasant and the land; and its impact on peasants. Government tried to control the land as much as it can and extract revenue from it. Though state has provided land to Birta owners, Jagirdar and village headman, land ownership ultimately rested on the state. It was the duty of Birta owners, Jagirdar and village headman to keep on cultivating the land through peasants and collect revenue from them. There was abundance of land at that time and less labour to work. So, it is very important for the state to have peasants cultivating the land and landlords to maintain the peasants to keep on working on the land. Hence, it was the strategy of the state to provide subsistence to peasants and stopping them from flight. Regmi cites various stances where government sends landlords to keep the peasants happy and not to keep the land empty. In the process of extracting more revenue from peasants, government and landlords started to take “kut” (i.e. advance amount for the use/production of land) instead of “adhya” (i.e. taking half of every production from land). Due to the implementation of “kut”, local money landers came into existence. These money landers took high amount of interest from peasants that throw them into indebtedness. This kind of indebtedness had lad people to slavery and bonded labour. There were instances where government tried to control slavery and the main objective of this action was to mitigate the hardship of peasants and thereby preventing peasants from migrating but not to end the slavery. Beside tax, peasants had to provide free labour to state and land owners in the form of “jhara”, “hulak” and “rakam”. These free labour were compulsory and peasants had to give high priority to them. Peasants had to finish free labour work assigned to them before their own work. In these two chapters, Regmi had shown the life of peasants in 17th and 18th century Nepal.

Chapter seven is about the revenue administration impact on agrarian conditions. In this chapter Regmi shows two basic forms of administrative arrangement in the revenue collection at that time. They are Ijara and Amanat. In Ijara system, Ijardar and/or local administrator was hired to collect the tax where as village headman was appointed in Amanat system. There was no uniformity in tax collection approach. Regmi, here, mostly focused on the Hills and Eastern Tarai. This chapter looks like the elaboration of second and fourth chapter where Regmi mentioned about taxation system in different parts of Nepal. In the concluding remark, he mentioned that both of the revenue collection mechanisms did not fulfilled the objective of the state (i.e. to maximize the revenue). There were loopholes through which local tax collectors could benefit more from tax collection and exploit peasants because administrative mechanism was not strong.

Chapter eight is about economic policies and program implemented during this period. There was no uniform policy and program. As the state’s objective was to maximize the revenue and the most important way was through land reclamation and settlement. Similarly, multiple taxes were imposed from manufacturing to export level; traditional channels were used for internal and foreign trade; trade was focused on exports and discouraging imports; state was monopolizing on specific trade items by giving them to individual contractors; liberal policy was implemented in the minting and coinage as it provided more profit without investment, defense products were under the state’s control with major raw materials bringing from India; and ambivalent policy on mining. Mining licenses were given to individual contractors but in 1800 it was brought in the control of government but there was no change in mining technology. Prithvi Narayan Shah’s policy of displacement of villagers from mining area was adopted but later his successors did not follow it. Similarly, focusing on export was also Prithvi Narayan Shah’s policy on trade and commerce which was followed for long time. To protect Kathmandu valley from foreign invasion, policy of isolation was adopted. Limited checkpoints were kept so that it will be easy to track record of the people travelling to Kathmandu. Economic policies and programs during the period were like fire fighting type and was not focued on the long-term development and growth. Because of that Nepal was going through financial crisis. It was hard for the state to maintain military strength.

Chapter nine focuses on the economic development after Nepal-British war. Because of the weak military strength, Nepal lost the war with British. Because of the loss in war, Nepal and British Empire come to the agreement called Sugauli treaty. This treaty fixed the territorial boundary of Nepal and gets to the present shape. After the loss, Nepal and India trade and commerce increased significantly. Market centers were established in Terai (border area) and in some parts of hills. Growth of British mercantilism was observed after Sugauli treaty.

The final chapter (chapter ten) is the conclusion of the whole book where Regmi argued that Nepal’s economic development after unification was not possible because government did not emphasis on the capital accumulation in order to increase productivity. He further said that landholding system did not generate market mechanism but just maintain subsistence and fulfill the obligation of landholdings.

The book is very interesting for those who want to understand economic history of Nepal. The book also shows picture of Nepali peasants and their hardship. It also shows how this legacy of Birta and Jagir land ownership had created class in itself. When we study the class in Nepal, Regmi’s work must not be excluded. As I said earlier, it is the pioneering work in the economic history of Nepal. So, many historian, sociologist, anthropologist and economist have relied on his work and build up on his work. Regmi has shown that archival research can produce very good result. This was his strength as well as weakness. There are no other verification tools or techniques used in the research such as interview or observation other than archival document.

In the book, Regmi has mentioned that peasants have sent their grievances relating to exploitation done to them but he did not give much attention on that part. It would be interesting what kind of exploitation they were facing, who were writing their letters and how they send their letters to palace, since, most of the peasants those days were illiterate. In overall, the book is very informative, dense with details of economy and impact on the peasants’ life in 18th and 19th century Nepal.


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