Ijaradari system was a form of land revenue system where the right of collecting revenue of a particular area was auctioned to the highest bidder. The Ijaradari system, which started from Shah Jahan’s time, grew more during the time of Aurangzeb. The practice of ijaradari spread all over India in the eighteenth century especially in the old Mughal provinces of Bengal, Awadh, and Hyderabad.
After the battle of Plassey, the British secured the Diwani rights (rights to collect revenue). When Robert Clive obtained the Diwani of Bengal, there used to be annual settlements of the Land revenue.
During British rule, the system of Ijaradari was introduced by Warren Hastings. Ijaredari system was introduced in 1773 by Warren Hastings in Bengal whereby he assumed that all land belongs to State. This was the first land tenure system implemented in India by British. Under this system, right of collecting revenue of a particular area was auctioned to the highest bidder. The Peasants, shopkeepers, and merchants had to pay their taxes to the Ijaredar who eventually was also the highest bidder to the company.
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