Market reforms of Alauddin Khalji

History glossary

Also called: Price control of Alauddin · Topic: Turkic Invasions and the Delhi Sultanate · NCERT: Beyond NCERT

Meaning

The market reforms of Alauddin Khalji were a set of rules that fixed the prices of grain, cloth, horses, cattle, slaves and other goods in Delhi. They were enforced through separate markets, a market controller (shahna-i-mandi), state granaries, grain collected as land revenue, and spies. This let the sultan pay a very large army low cash salaries.

They matter because this was the first time a Delhi sultan ran the economy so closely. The reforms were tied to his wars, his tax system and his army. They are a common UPSC question on how the Sultanate state worked.

Explanation

Background: why he needed cheap prices

Alauddin Khalji ruled from 1296 to 1316. He took the throne by killing his uncle Jalal-ud-din Firuz Khalji [1].
The Mongol threat forced him to keep a huge standing army.
The Mongol Empire then covered most of Asia, and he had to drive back several Mongol invasions.
He built a fortified city at Siri, near the Qutb Minar, and made it his capital [1].
A permanent army had to be kept ready near Delhi all the time.
He paid his soldiers in cash, not in land.
Earlier, officers were often given an iqta (a piece of land whose revenue an officer collected in place of a salary).
A cash salary kept soldiers dependent on the sultan, not on local land.
Cash salaries created a new problem.
Soldiers had to buy their food, cloth and horses from merchants in Delhi.
If merchants raised prices, the salaries would not be enough.
Paying higher salaries to such a big army would empty the treasury, even with the loot from the south.
The answer was to keep prices low by order of the state. Low prices meant a low salary still gave the soldier a decent life.

Main features: the markets and the officers

Separate markets in Delhi, each for different goods:
Mandi: the grain market.
Sarai-adl: the market for cloth and other costly goods such as sugar, dry fruits and oil.
A separate market for horses, cattle and slaves.
Fixed prices. The state set a price list for each item. Merchants who sold above it, or cheated on weight, were punished severely.
Officers in charge:
Diwan-i-riyasat: the department that controlled the markets.
Shahna-i-mandi: the market controller, who watched each market.
Barids (news reporters) and munhiyans (secret spies) reported directly to the sultan, so officers and traders could not hide wrongdoing.
Registered merchants. Traders had to register with the state. Cloth merchants, for example, received advances from the treasury and had to bring their goods to Delhi.
Horses were checked. Dealers could not buy horses cheaply and resell them to soldiers at high prices.

How grain supply was guaranteed

The land tax was the base of the system.
In the fertile Doab (the land between the Ganga and Yamuna) and nearby areas, land revenue was fixed at about half the produce.
Land was measured to work out the tax.
Much of it was collected in grain (in kind), not cash, and stored in state granaries.
Grain traders (often called karwanis or banjaras, who carried grain on pack animals) were registered and made to bring grain to Delhi at fixed rates.
No hoarding. Peasants had to sell their surplus grain at the field to registered traders. They could not store it to wait for higher prices.
Famine years. Grain was released from the state granaries and rationed, so prices stayed steady even when rains failed.

Results

Contemporary writers praised his reign for cheap prices and steady supplies in Delhi.
He could keep a very large army at low cost. This army held back the Mongols in the north-west and supported Malik Kafur's campaigns in the south [2][3].
There were costs too:
Peasants paid a very heavy tax and lost the freedom to sell their grain at a fair price.
Merchants lost their profits and lived in fear of harsh punishment.
The system depended on one strong ruler and strict spying. It broke down soon after his death in 1316, and the Khalji dynasty itself ended in 1320 [1].

Time, place and evidence

Period: the reign of Alauddin Khalji (1296–1316), Khalji dynasty, Delhi Sultanate [1]. The reforms were brought in after the Mongol attacks of his early reign. The exact year is not certain.
Place: mainly the city of Delhi. Historians disagree on whether the price controls covered the whole Sultanate or only the capital. Most follow the view that they covered Delhi, with grain drawn from the Doab.
Key people: Alauddin Khalji. The shahna-i-mandi and the officers of the diwan-i-riyasat ran the markets.
Sources:
Ziauddin Barani, Tarikh-i-Firuz Shahi. This is the main and most detailed account. Barani wrote decades later, in the reign of Firuz Shah Tughluq, so some of his details may be exaggerated.
Amir Khusrau, the court poet of Alauddin, wrote works such as Khazain-ul-Futuh. These praise the sultan and also mention his measures.

Don't confuse with

Muhammad bin Tughluq's token currency. Alauddin fixed prices of goods. Muhammad bin Tughluq issued token coins of copper or brass. Alauddin's system worked during his lifetime, while the token currency failed.
Iqta system. An iqta was a land grant whose revenue paid an officer. Alauddin moved his central army towards cash salaries instead, and that is what made price control necessary.
Diwan-i-mustakhraj. This was another department set up by Alauddin, but it was for collecting unpaid revenue (arrears) from officials. The diwan-i-riyasat ran the markets.
Sher Shah Suri's reforms. Sher Shah (16th century) is known for land measurement, the silver rupiya and roads with sarais. He did not run a Delhi price-control system like Alauddin's.

Prelims Hooks

Alauddin Khalji's reign: 1296–1316. He came to power by killing his uncle Jalal-ud-din Firuz Khalji [1].
Shahna-i-mandi = controller of the market; diwan-i-riyasat = market department; sarai-adl = market for cloth and costly goods.
Main source on the market reforms: Ziauddin Barani, Tarikh-i-Firuz Shahi.
Land revenue in the Doab under Alauddin: about half the produce, collected largely in kind to fill state granaries.
Purpose of the reforms: to pay a large cash-salaried army that defended against the Mongols. He built Siri near the Qutb Minar as a defence measure [1].
Trap: the price controls are linked to Alauddin Khalji, not to Muhammad bin Tughluq (token currency) or Firuz Shah Tughluq.

Mains Points

Economy in service of the army. Southern loot from Malik Kafur's campaigns (1307–1311) gave Alauddin cash [2][3]. Price control made that cash go further. Together they supported an army that held off the Mongols. This shows how war, tax and markets were joined into one state system.
Strength and limits of central control. Spies, harsh punishments and grain collected in kind gave the sultan tight control of the capital. But the system rested on one ruler's will and on heavy pressure on peasants and traders, and it collapsed soon after 1316 [1]. This is a useful example of how far a medieval state could control an economy.
Historiographical debate. Our picture comes mainly from Barani, who wrote decades later and had his own views on kingship. So historians debate how far the controls went beyond Delhi, and whether the ordinary people of Delhi gained or only the soldiers did.

Related concepts

Khilji expansion

Sources

1ʿAlāʾ-al-Dīn Khaljībritannica.com · tier 3
2Malik Kāfūrbritannica.com · tier 3
3India — The Khaljisbritannica.com · tier 3