4 SOCIAL SCIENTIST The professional money-lending classes, who were also often the merchants, had, since Mughal times, played an important role in the collection of revenue.4 Further, given the fairly well developed and extensive activities of Indian ^merchant and banking capital in the Mughal period,5 money-lending had become an integral part of the commercial circuit which united the activities of Indian merchants and financiers of diverse strata, albeit loosely as compared to a capitalist credit system. The imposition of a high and fixed land revenue in money terms, coupled with the disbanding of many features of the old system and introduction of bourgeois precepts, paved the way for the rapid dispossession of the peasantry.6 The Indian merchant bourgeoisie who combined trading with usury, in the process, not only amassed great wealth, but also appropriated vast amounts of land.7 That revenue exactions directly formed the principal contributory cause in the rising incidence of indebtedness, is clear.8 Simultaneously, the integration of India into the world capitalist market, the growth of commercial crops and the penetration of British manufactures into rural India afforded the Indian trading classes the opportunity to expand their wealth through middleman ship. The activities of the Indian middleman, operating on the basis of semi-feudal relations with the Indian peasantry, allowed British capital to maintain very low prices for the raw materials purchased by them.9 The Indian merchant classes, combining trade wilh usury and landownership, thus constituted a most important aspect of the British colonial regime, forming along with the landed gentry, the instrument of economic and political exploitation of the Indian peasant. It was from this stratum, rooted in the feudal exploitation of the Indian peasantry and operating as agents of colonial commerce, that the Indian industrial capitalist class arose in the course of the end of the 19th century and the beginning of the 20th century. The transformation was neither rapid, nor uniform (in geographical terms), nor complete. The destruction of the big indigenous financiers of Bengal, the concentration of colonial commercial activity in Bengal and Madras and the consequent control of not only foreign trade and commerce, but also of finance and wholesale trade by Europeans, restricted the expansion of Indian merchant capital, and, more irnportant, the entry of Indian capital into industrial spheres, upto the First World War. In the Bombay region, partly as a consequence of the later acquisition of that region by the British, partly because of its lesser importance as a locus of trade and commerce, indigenous merchants acquired a greater role at an early stage, as compared to their counterparts in Bengal and Madras.10 Through the first half of the 19th century, Indian merchants in the Bombay region, mostly Gujarati by nationality (including Parsis), operated as agents of British firms in procuring opium and raw cotton, as well as in their export: opium was exported to China, while raw