During the eighteenth century, French planters used to grow indigo in the Caribbean islands. The African slaves who used to work in these plantations revolted in 1791. They set the plantations on fire and killed their rich planters. In 1792, France abolished slavery in the French colonies. These events led to the collapse of indigo plantation in the Caribbean islands.

(i) By 18^th century, the demand for Indigo grew further along with industrialization of cotton textiles.
(ii) As the demand increased, the existing supplies from West Indies and America collapsed due to various reasons.
(iii) Between 1783 and 1789, the production of indigo in the world fell by half and Britain looked forward to Indian cultivators for indigo plantation and supplies.

The two main types of systems associated with indigo cultivation were Nij and Ryoti. In the Nij Cultivation, the planter produced indigo on land that he directly controlled. He either bought the land or rented it from other zamindars and produced indigo by directly employing hired labourers.
The planters found it difficult to expand the area under Nij cultivation. Indigo could be cultivated only on fertile lands, and they all were already densely populated. Planters needed large areas in compact blocks to cultivate indigo in plantations.
Labour was not easy to mobilise. A large plantation required a vast number of hands to operate and labour was needed precisely at a time when peasants were usually busy with their rice cultivation.

(i) The Permanent Settlement was introduced in Bengal, Bihar, Orissa, the coastal districts of Andhra Pradesh and Banaras, while the Mahalwari system was introduced in western parts of Uttar Pradesh, Punjab and Delhi.
(ii) Under Mahalwari System, a group of villages was considered as an important social institution and so it was preserved.
(iii) The collection of land revenue was fixed in the Permanent Settlement, but under the Mahalwari System, the collection of land revenue was revised periodically.
(iv) The Zamindars were responsible for collecting the land revenue from the cultivators in the Permanent Settlement Act, whereas, in Mahalwari System, the right to collect the land revenues was given to the village head.

(i) In most of the regions of Bengal, some of the powerful ryots did not cultivate, but gave out their lands to under tenants.
(ii) They (the under tenants) were pressurized by an excessive rent in kinds and by usurious returns for cattle, seed, subsistence, advanced to them and they could never extricate themselves from debt.
(iii) They earn a scanty subsistence without the hope of bettering their situation.

Jardari system of Land Revenue:
(i) This system was also known as 'System of Auction' because the land was given to the highest bidder and most of the bidders usually offered more than they could actually pay.
(ii) The bidder did not cultivate the land and had the small farmers or tenants to do this for them.
(iii) Under this, the condition of the peasants became very miserable because bidders would extract the maximum revenue from them.

The indigo planters forced the ryots to sign contract. They provided cash advance, seed, and the drill. But the ryots found that the cultivation of indigo was intensely oppressive.
Under these circumstances, they became reluctant to grow indigo:
(i) Indigo could be cultivated only on fertile lands, but the peasants preferred to cultivate rice there. Indigo plant had deep roots and exhausted the soil rapidly
and after an indigo harvest, the land could not be useful for rice cultivation.
(ii) Peasants who were initially tempted by the loans given by the planters, soon realized that the system was very harsh. The price they got for the indigo they produced was very low and cycles of loans never ended. They were trapped in a cycle of loan.
The ryots gradually became aware about the harsh system of indigo plantation and refused to grow indigo.

The two problems with the new Munro system of.fixing revenue, are as follows:
(i) Driven by the desire to increase the income from land, revenue officials fixed a very high revenue demand which peasants were unable to pay.
(ii) It was believed that the new system would transform the peasants into rich farmers, but it failed to happen.

The main features of the Permanent Settlement were: 
(i) By the terms of the settlement, the rajas and taluqdars were recognized as zamindars.
(ii) Zamindars were asked to collect rent from the peasants and pay revenue to the Company.
(iii) The amount to be paid by the zamindars was fixed permanently, i.e. it was not to be increased ever in future.
(iv) It would ensure a regular flow of revenue into the company's coffers and at the same time encourage the zamindars to invest in improving the land.
(v) As the rate of revenue was fixed, the zamindar would benefit from the increased production of land.

The ryots will grow indigo on the following Condition:
(i) They will pay revenue which is reasonable.
(ii) They will cultivate indigo as per their will and convenience.
(iii) They will not be forced in any manner.
(iv) They will sell their produce in open market which will bring profit to them.

The weekly markets in Bengal were very popular. Peasants and artisans from rural areas regularly came to these markets (which were known as haats) to sell their goods and buy what they needed. Local people came in large numbers to buy necessary things. During the economic crisis of Bengal, these markets were badly affected as common men did not have enough money to satisfy their basic needs.

After becoming the Diwan of Bengal in 1765, the Company realised that it had to move with some cautions which are as follows:
(i) Firstly, being an alien power, the company needed to pacify those who had ruled the countryside in the past and enjoyed prestige and power.
(ii) Secondly, those who enjoyed local power had to be controlled. But they could not be entirely eliminated as sometimes the Company might be dependent on them to solve local problems.

In the 18th century, the Bengal economy was facing a deep crisis because:
(i) Artisans were forced to sell their goods to the Company at low prices. Unable to cope up with the situation, artisans were deserting villages. Thus, artisanal production was in decline.
(ii) The rajas and taluqdars were not interested in the improvement of lands, thus agricultural cultivation showed signs of collapse. Peasants were unable to pay the taxes that were demanded from them.
(iii) In 1770, a terrible famine killed almost one-third of the population of Bengal.

The cultivator found the Permanent Settlement extremely oppressive because of these reasons:
(i) The rent the cultivator paid to the zamindar was high and his right on the land was insecure.
(ii) To pay the rent, the cultivator had to often take a loan from the moneylender. When he failed to pay the rent, he was evicted from the land which he had cultivated for generations.