Financial policies of the Mughal Empire

ByZoya Ansari

Designation: She has a good deal of teaching experience and possesses a keen historical sense


July 24, 2022

Zoya Ansari describes an evolutionary phenomenon

Mughal Empire is widely rated to be an example of proto-modern rule edifice well versed in managing all aspects of governance that are observed in modern day management of a state. To begin with it adhered to the modern tenet of keeping records and its written archives are aplenty detailing all activities of the ruling structure. This massive record covered multifarious state functions giving an impression of a well-oiled administrative apparatus that Mughal Empire certainly was and this fact is the primary reason that it lasted for so long in not very conducive locale. It is generally accepted that for quite long the Mughals remained very liquid in financial matters and this may well be described as one of their many strengths as it provided them the required wherewithal to manage the affairs of their dominions adequately. Mughal revenue windfall was the highest among contemporary Muslim Empires enabling the Mughal rulers to take advantage of the best talent available both in the battlefield and governance matters. Mughal imperial coinage was of an unprecedented quantity and quality and was highly valued and commanded a strong purchasing power. The Mughal silver rupee was the most popular currency having been standardised at about eleven grams.

The most crucial factor of Mughal coinage was that it successfully maintained its standards from the reign of Akbar in the mid-sixteenth century until the break-up of the empire in the first half of the eighteenth century. Mughals ruled the vast swathes of the lands of the subcontinent and this fact alone guaranteed that its currency circulated freely and uniformly from Kabul to Dacca and from Surat to Madras. Imperial mints located throughout the empire struck coins to the same standard. Mughals rulers were quite anxious to mint currency from different centres as it added to their popularity. As the empire expanded so also did the area of circulation for the rupee and its copper and gold counterparts. Mughal currency easily and quickly superseded virtually all preceding currencies and local and regional coinages. The system of discounting older coins in favour of the coin dated in the current regnal year was also in vogue. Mughal numismatic presence is extensively recorded and is well-known to have been in wide circulation and enjoyed high levels of acceptability.

The Mughal monetary system was powerful, flexible, pervasive and longer-lasting. The measure of success could be gauged by the fact that Mughal currency was circulated in extremely large numbers both in private and public fields of activity. It is duly recorded that the number of Mughal copper coins and silver rupees minted and released was very large as imperial mints turned out silver rupees in numbers sufficient for expanding trade and commerce, the meeting of tax demands, as well as for royal and noble hoarding in treasuries and for conspicuous consumption. It is estimated that the number of silver rupees in existence must have run into tens of millions. Interestingly this enormous mint output occurred in a region lacking any significant output of silver and gold and with only limited copper production. This in itself is a measure of the adequacy of the monetary system managed by the Mughal Empire that brought a good deal of prosperity to the population.

According to the traditions of times the Mughal currency relied upon stocks of treasure released after conquest along with Mughal money-handlers relying upon imports both from east and west, over both land and maritime routes. The export of textiles and spices among other products, aided by the skills and capital of local traders and ship-owners and caravan operators, ensured a favourable commodity balance of trade. The supply of precious metals was provided a fillip by the vast streams of New World silver and gold that began to arrive in the Mughal Empire. By the end of Akbar’s rule in 1605, these flows were enhanced by the direct India-to-Europe traffic of textiles and spices exchanged largely for precious metals by the foreign companies and this mutual advantage was gained both by western companies and the Mughal Empire.

It was widely known that one could carry all sorts of silver into the Empire that could also be conveniently converted into currency by many mints situated in the length and breadth of the Mughal Empire. It was mentioned that the universal medium of tax collection for the Mughal treasuries was imperial coin and foreign coin was not acceptable, therefore, it was in the interest of the moneychangers and bankers to initiate the conversion of foreign currency at the mints. This practice implied that the policies of the Mughal state were designed to ensure that the imperial mints absorbed the inflow of silver and gold and placed this in circulation as silver and gold coin of standard issue. Though Mughal currency did travel within the wider Indian Ocean region also but the Mughal rupee did not serve as a major trading currency beyond the subcontinent. Though it was reported that imported silver and gold augmented the coinage stocks of Mughal India making circulation more widely spread out.

It was noticed that decade after decade the Mughal state put more and more coin into circulation in its territories and this sustained level of mint production and its cumulative effect on imperial monetary stocks. The expanding imperial land tax system acted as a constant stimulus to market activity and the result was that state requisition of a large share of production increased the demand for money. The Mughal financial managers encouraged all parties, from the producing peasant to the highest grandee, to support and facilitate the conversion of agricultural produce into money. Proceeds from sales of produce and official and unofficial loans and salary payments moved money from city to countryside. It is imperative to realise that the Mughal Empire paid its officials and military in cash that increased the requirement of minting more currency. During the Mughal times the predominant aspects of economic activity ensured patterns of commodity production, internal trade and export outlets that encouraged money supply and further liquefied Mughal treasury. Mughal economic upsurge and the needs of trade and banking witnessed refinement of ancillary monetary instruments.

Monetary transfers at a distance became easier and less costly with the proliferation of reliable private mechanisms and they were also utilised by imperial fiscal officials frequently for the transfer of funds. The royal family and members of ruling nobility used this method for remittances and kept money circulation in flow. The expanding state and the burgeoning market relied upon a growing and flexible imperial monetary system underpinned by huge and growing stocks of coin provided the means for a growing emphasis on market exchange on a cash basis. One result of this seems to have been a deepening level of monetisation within the empire. The land tax demand in the expanding borders of the empire coupled with commodity sales in an intensifying network of markets increased the number and velocity of coin in circulation. The adroitness of the Mughal financial managers ensured that the coffers of the state remained full enabling it to provide basic requirements of life to its citizens through a strong economy, stable currency and flexible regulatory mechanism. TW


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