Silver rupya

Also called: Rupee, Rupiya, Silver rupee of Sher Shah, Rupaya and dam · Topic: Mughal Agrarian Society and Economy · NCERT: Class 8, Ch 2 "Reshaping India's Political Map"; Class 12, Ch 4 "Peasants, Zamindars and the State"

Meaning

The silver rupya (also called rupiya or rupaya) was a silver coin of a fixed standard weight, 178 grains of silver, first issued by Sher Shah Suri (1540–1545). The Mughals kept this same standard [2][3].

It matters because the rupya kept almost the same value and quality from the 16th to the 18th century, which is rare in history. This let the Mughal state collect land revenue in cash. It also tied Indian villages to markets and to world trade.

Explanation

Background: why silver came to India

• India had no silver mines of its own. Every silver coin was made from silver brought in from outside.
• Four stable empires ruled Asia at the same time: the Mughals (India), the Ming (China), the Safavids (Iran) and the Ottomans (Turkey).

• Because these states were stable, goods and money could travel safely from China to the Mediterranean.

• The New World voyages (European ships reaching the Americas) opened a much larger sea trade between India and Europe.

• Silver mined in the New World came into Asia to pay for cloth, spices, indigo and pepper.

• India had an export surplus (it sold more to other countries than it bought from them).

• Buyers had to pay the difference in silver.
• So a large share of the world's silver came to rest in India.

Main features of the coin and the currency system

• Sher Shah's standard: Sher Shah issued the Rupiya, a silver coin of 178 grains. The Mughals continued it [2][3].
• Tri-metal system (coins in three metals: gold, silver and copper): the Mughals used this system, and Sher Shah had largely built it [2][3].
• Two everyday coins (Class 8 NCERT):
• the silver rupaya, the main coin of value;

• the copper dam, the small coin that ordinary people used for daily buying.

• Stable value: the rupya kept almost the same weight and purity from the 16th to the 18th century. So prices and contracts could be trusted.

How it worked in the economy

• Much more minting. With more silver coming in, more mints were at work and many more coins were in circulation.
• Revenue in cash. Coins were plentiful, so the state could ask for land revenue in money, not only in grain.
• Peasants had to sell part of their crop in the market to get coins.

• This monetised the village economy (made money a normal part of village life).

• Credit without carrying coin: the hundi. A hundi was a written order to pay money, like a modern cheque or bank draft.

• A merchant paid cash in one city and received a hundi.
• His partner in another city, or even another country, collected the cash against that paper.

• Heavy coins did not have to travel on dangerous roads. Marwari merchant networks were well known for running hundi chains.

• Ports and temples. Silver and trade moved through Surat, Calicut, Masulipatnam and Hooghly. Big temples held endowments (gifts of land and money) and also lent money to merchants.

Results: gains and stress

• For the state: plenty of coin and cash revenue made a strong central treasury possible.
• For the peasant: the cash demand was heavy.
• By the late 1600s many peasants were over-taxed.
• They borrowed to pay. When they could not repay, many fell into bonded labour (working to pay off a debt that never ended).

Time, place and evidence

• Period: introduced under Sher Shah Suri (1540–1545) of the Sur dynasty. It continued under the Mughals and stayed stable from the 16th to the 18th century.
• Region: the whole Mughal empire. It was linked through ports such as Surat (west coast), Calicut (Malabar), Masulipatnam (Coromandel) and Hooghly (Bengal).
• Key people: Sher Shah Suri set the coin standard. Akbar and his finance minister Todar Mal ran the land-revenue system that depended on cash assessment [4].
• How we know:
• Coins: the standard of 178 grains and the tri-metal system are recorded by the RBI Monetary Museum and in studies of Islamic coinage [2][3].
• The Ain-i Akbari of Abu'l Fazl, completed in 1598: its fiscal book, the mulk-abadi, has revenue tables with a naqdi column (revenue assessed in cash). This shows the state taxing in money [4]. Its prices and wages come mainly from Agra.
• Travellers' accounts: Giovanni Careri, an Italian traveller writing around 1690, said that all the gold and silver moving around the world "at last Centres" in Hindustan. In other words, it all finally gathers in India.
• English East India Company (EIC) records and regional records add a view from the ground.

Don't confuse with

• Copper dam: this was the small copper coin for daily buying by ordinary people. The rupya was the silver coin of higher value. Class 8 NCERT names both as the two main Mughal coins.
• Hundi: this was a paper order to pay money, a credit tool used by merchants such as the Marwaris. It was not a coin. It let money move without carrying rupyas.
• Silver tanka of the Delhi Sultanate: this was an earlier silver coin of the Sultanate period. The rupiya with its 178-grain standard is linked to Sher Shah Suri, not to the Sultanate.
• Source of the silver: India had no silver mines. The silver came from the New World, drawn in by India's export surplus. A question that says India's coin stayed stable because of its own mines is a trap.

Prelims Hooks

• Sher Shah Suri (1540–45) issued the silver Rupiya of 178 grains, and the Mughals kept this standard [2][3].
• The Mughals used a tri-metal currency (gold, silver and copper) that Sher Shah had largely built [2][3].
• Class 8 NCERT: the two main Mughal coins were the silver rupaya and the copper dam.
• India had no silver mines, yet the silver rupya stayed stable from the 16th to the 18th century, thanks to New World silver and India's export surplus.
• Giovanni Careri (Italian, c. 1690) wrote that the world's gold and silver finally "Centres" in Hindustan.
• The naqdi column of the Ain-i Akbari's revenue tables records revenue assessed in cash.

Mains Points

• Silver made Mughal fiscal power possible.
• New World silver, drawn in by India's export surplus, gave the state enough coin to collect land revenue in cash.

• Peasants had to sell crops to pay, which commercialised agriculture and helped rural markets and merchant credit (the hundi) grow.

• Monetisation cut both ways.

• The same cash economy that paid for a strong state also pushed peasants into debt.

• By the late 1600s over-taxed peasants were sliding into bonded labour. The wealth of the empire and the hardship of the cultivator came at the same time, not one after the other.

• India in the early modern world economy.

• The stable rupya depended on a world system: the Mughal, Ming, Safavid and Ottoman empires, the Atlantic voyages and European traders.
• Careri's remark (c. 1690) shows that people at the time already saw India as the place where the world's bullion ended up. This helps explain why European trading companies were so drawn to India.

Related concepts

• Flow of silver into India
• Hundi
• Banjaras
• Mahajan
• Nagarsheth
• Urbanisation in Mughal India
• Urban professional classes
• Manzil-abadi
• Sipah-abadi
• Mulk-abadi

Read more

• Silver, trade and the Ain-i Akbari as source