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The state was dependent on local bankers and mahajans for loans. So it sold the right to
collect tax to the highest bidders and the “revenue farmers” (ijaradars) agreed to pay the
state a fixed sum of money. In turn, the revenue farmers were given considerable freedom
in the assessment and collection of taxes. This way moneylenders and bankers got right to

influence the management of the state’s revenue system.
hyderabad

The state of Hyderabad was founded by Nizam-ul-Mulk Asaf Jah. He
was one of the most powerful members at the court of the Mughal
Emperor, Farrukh Siyar. Asaf Jah held a zat rank of 7,000. He was the
governor of Awadh and Deccan provinces. So, he had already control
over the political and financial administration of the Deccan area. As
the competition among the court nobility increased and the political
situation of the area worsened, he took the political command in his
Nizam-ul-Mulk Asaf Jah hands and became the ruler of Hyderabad state.

Asaf Jah adopted the following policies to strengthen his position.
• He brought skilled soldiers and administrators from northern India who welcomed the
new opportunities in the south.

• He appointed Mansabdars and granted Jagirs.
• He worked independently of the Mughal Empire. The Mughal Emperor on the other
hand, officially granted the title of Nizam to Asaf Jah. His successor took the title of
Nizam. In all, seven Nizams ruled Hyderabad until well after independence.
• The Nizams were known for their advanced culture and economic independence. The Nizamat

was, how ever, constantly engaged in struggle against the Marathas, Nayaks of Telegana.
fOreign invasiOns

The Persian ruler Nadir Shah invaded India and defeated the Mughal Emperor Muhammad
Shah at Karnal at 1739. Muhammad Shah was restored to his throne only after he ceded
(gave up) all the territories west of the Indus. Afghanistan thus went
permanently out of the control of the Mughals.
Nadir Shah carried away enormous wealth, including the Kohinoor
diamond and Shah Jahan’s jewel-studded peacock throne. Nadir Shah’s
invasion exposed the weakness of the Mughals. After this invasion, the

Marathas expanded northwards and threatened Mughal authority.
Between 1748 and 1761, the Afghan ruler Ahmad Shah Abdali invaded
India several times. In 1761, Ahmad Shah Abdali inflicted a crushing Nadir Shah
defeat on the Marathas in the third battle of Panipat. This destroyed the
possibility of the Marathas replacing the Mughals as the supreme power in India. This even
also cleared the way for the British to emerge as a political force in India.
The rajPuT sTaTes

The Rajput rulers who held watan jagirs under the Mughals enjoyed a lot of freedom. During
the reign of the weak later Mughals, they began to expand their territories and establish

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