The Carnatic Debts and the Agrarian Crisis of the Eighteenth Century

This article offers a preliminary survey of a little studied chapter in the economic history of eighteenth century Tamil Nadu. The Carnatic or Arcot debts were a class of liabilities incurred by the Nawabs of Arcot, who, in order to repay outstanding loans advanced to them by the East India Company, borrowed heavily from private servants of the Company. As collateral for these loans taken at usurious rates of interest, the Nawab rendered his debtors fertile areas of the Carnatic to collect the land revenue from. The debtors became an enormously wealthy class as a result of these fraudulent transactions. The Debts, which imposed crushing burdens on the peasantry, formed a major part of the drain of wealth to England in the late eighteenth century.