THE CORE AND THE PERIPHERY 5 Sovereign Ruler.'7 After the colonial conquest of Bengal, he adds 'the source of the conquerors' profits, however, lay not in commerce, but in land revenue. Maximization of land revenue was necessary for the maximization of profits.18 Marshall also admits that 'taxation was the central preoccupation of early British rule,9 but its magnitude, modes of assessment and collection and incidence are the chief characteristics that so sharply contrast with the nature of revenue management of former regime in Bengal. From a careful examination of contemporary source-material three major points of difference emerge on comparative basis which were not taken into consideration by Marshal: (1) Under the Nizamat (1717-1756) the holdings of defaulting zamindars were not put to auction for sale; these were brought under the direct control of government and afterwards restored to them on the pledge of regular payment of dues, (2) no Mughal governor of Bengal had introduced the system of revenue-farming on the scale indulged in by the East India Company; and (3) in judicial matters the principle of arbitration was preferred to resolve agrarian and fiscal disputes over endless and complicated litigation in courts of law. Moreover, the magnitude of revenue demand which had reached the highest pitch, from Rs. 64.51 lakhs in 1762-3 under the Nizamat, to Rs. 147.0 lakhs in 1765-6 (an increase of 20 per cent according to the estimate of Marshall) proved disastrous for the countryside. Large tracts of lands became desolate and the peasantry reduced to poverty, abandoned cultivation and deserted their villages. According to Tabatabai the artisans and other professional classes experienced great hardship due to dearth of work. 'They were fleeing from place to place in search of employment, many of them were starving and reduced to beggary'.10 Tribute or Drain of Wealth that followed the famous Plunder of Plassey, of which overtaxation was a necessary facet, impoverished the country and retarted socio-economic progress during the latter part of eighteenth-century'.11 No historian of eighteenth-century seems to have asserted that the colonial power itself had created a political and military vacuum,12 but it is a historical fact that it took advantage of the absence of a strong, centralized authority to step into it. Had the imperial power remained as predominant, politically and militarily, at the mid-eighteenth century as it had been in the previous century such a situation would not easily have arisen. It is also not correct that political decentralization went hand in hand in the distribution of power at the local level.13 There is no historical evidence to determine the character and phases of this process which helped the formation of independent states in Hyderabad (1725) and Bengal (1740). These states sprang up in manifest consequence of the growing weakness of imperial government, which could not assert its writ in the face of military strength of their founders. The process was later accelerated by the diplomatic and military intervention of European powers. At the time of the rise of Maratha state under Chhatrapati Raja Shahu