The primary concern of the medieval Indian kings in their tax policies, as in everything else, was to consolidate and enhance their own power and resources; ruling for the benefit of the people was more a pretence than a practice with nearly all of them. But even from the narrow point of view of self-interest, it was very much in the interest of kings to nourish trade and be facilitative towards traders, especially towards foreign traders, for kings were dependent on those traders to provide them with the luxuries essential for their lifestyle, and also, more importantly, to supply them with the horses their armies needed. Besides, traders often operated across kingdoms, and if a king overtaxed or oppressed them, they could easily move their business elsewhere.
In every respect it was very much in the interest of kings to maintain good relationship with traders. And traders on their part usually avoided getting embroiled in political tussles, for that could jeopardise their business interests. But major traders, because of their great wealth, and the armed escorts they maintained, were sometimes tempted to enter into the perilous arena of politics. Thus the Tibi family, trade tycoons in peninsular India in the late thirteenth century, once played the role of kingmakers in the Pandya kingdom, in a tussle between two brothers for the throne. Similarly, according to Battuta, there was once, on the west coast south of Goa, a very rich trader named Jamal-ud-din, who maintained an army of 6,000 and a fleet of over fifty ships, styled himself ‘sultan’, and exercised considerable political power for a while in the late fifteenth century.
COMMERCIAL TAX PRACTICES and rates in India varied considerably from kingdom to kingdom, even from ruler to ruler in a kingdom. This was inevitable, given the political, economic and social diversity of India. The most rigorous of the trade control measures enforced by any medieval Indian king were those of Ala-ud-din Khalji, who sought to firmly control all economic activities in his empire, particularly in Delhi, by regulating both the movement of goods as well as their prices. The major trade objective of the sultan was to stabilise the price of grains, the essential food of Indians of all classes, and in this he was entirely successful. He achieved this by fixing and enforcing the price of grains, and by carefully balancing supply and demand, releasing into the market grains from the royal stores during times of scarcity. ‘The unvarying price of grain in the markets was looked upon as one of the wonders of the age,’ comments Barani.
Ala-ud-din’s economic policies were comprehensive. In addition to the price of grains, he also sought to control the prices of all essential commodities, such as ‘piece goods, garments, sugar, vegetables, fruits, animal oil, and lamp oil,’ states Barani. The prices of slaves and concubines (essential commodities in that age!) were also fixed by the sultan. Even in the case of ‘articles … of the most trifling value … the sultan took the greatest trouble to fix their prices and to settle the profit of vendors.’ These were not mere paper regulations, but were rigorously enforced. And the sultan kept himself regularly informed about the market conditions through the reports of three independent sources — the superintendent of the market, reporters, and spies — and he took prompt remedial measures whenever required to restore market stability. Merchants who used short-weights were punished with ‘blows and by cutting off flesh [of an equal weight] from the haunches of those who gave short weight.’
To enforce his market regulations, Ala-ud-din held the families of the major suppliers of goods in the market as hostages, and held out the threat of severe punishment to those who violated government regulations. But this was only one side of the sultan’s policy. His was a carrot-and-stick policy, by which, on the one side, he coerced traders to abide by his market regulations, and, on the other side, encouraged and supported fair traders by honouring them with robes of honour, and by granting them loans from the royal treasury for financing their business. An equally creditable aspect of Ala-ud-din’s trade regulations was that they were as much beneficial to the common people as to the state, as they created stable market conditions and kept the prices of essential commodities low. Ala-ud-din was an autocrat, but a benevolent autocrat. Unfortunately, his market regulations ‘came to an end on his death, for his son … was not able to maintain even a thousandth part of them,’ comments Barani.
THE ECONOMIC POLICIES of Krishnadeva of Vijayanagar was the exact opposite of the policies of Ala-ud-din — the raja’s objective was to stimulate economic activity, while the sultan’s objective was to control it — but in both cases their policies were beneficial to the king as well as to the people.
Of all the Indian kings of the early middle ages, Krishnadeva’s economic policies were the most liberal. ‘A king should improve the harbours of his country and encourage its commerce, so that horses, elephants, precious gems, sandalwood, pearls, and other articles are freely imported into the country,’ he advises in Amukta-malyada , his poetic work. ‘He should arrange that foreign sailors who land in his country on account of storm, illness, and exhaustion are looked after in a manner suitable to their nationality … [He should] make the merchants of distant foreign countries who import elephants and good horses be attached to him by providing them with daily audience and presents, and by allowing decent profits. Then those articles will never go to his enemies….’
This liberal import policy however applied only to the items that the state itself did not produce. In other items the protection of local producers and traders was a high priority for Vijayanagar kings, and they usually imposed high taxes on the goods brought from outside the state. This was the common practice of most Indian kingdoms.
Import taxes were usually collected at the frontiers of kingdoms. For instance, at a river crossing near Multan, ‘the goods and baggage of all who pass are subjected to a rigorous examination,’ reports Battuta. ‘Their custom at the time of our arrival was [for government officers] to take a quarter of everything brought in by merchants, and exact a duty of seven dinars for every horse.’ These were quite high rates. Further, in addition to import duties, medieval Indian states also collected octroi at the gates of towns.
The range of commercial taxes in medieval Indian kingdoms was indeed very broad. Indian kings usually imposed tax on all trade and economically productive activities in the state, however trivial, because, from the point of view of kings, the very existence of those activities depended on the protection that the state provided to them through the maintenance of law and order.
However, despite the wide range of commercial taxes collected by Indian states, these taxes were relatively fewer than the other taxes collected by medieval Indian states. And the rates of commercial taxes were usually lower than the rates of agricultural taxes. In Vijayanagar, for instance, agricultural tax was between one-third and one-sixth of the produce, but customs duty was only between 2.5 and 5 per cent of the sale price. But even at such low rates, commercial taxes yielded high revenue for the state, next only to the revenue from agricultural taxes.
Kings were generally protective towards traders, because it was very much in their interests to do so. But practices in this varied considerably from kingdom to kingdom. And sometimes kings acted like brigands or pirates. For instance, in Kerala, according to Battuta, it was ‘a custom of theirs that every ship that passes by a [port] town must drop anchor there and give a present to the [local] ruler … If anyone omits to do this, they sail out in pursuit of him, bring him into the port by force, double the tax on him, and prevent him from proceeding on his journey for as long as they wish.’ Kerala kings apparently considered the coastal seas as their territorial waters.
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