History of the British salt tax in India

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The salt tax, however, continued to remain in effect and was repealed only when Jawaharlal Nehru became the Prime Minister of the Interim Government in 1946, but later re-introduced via the The Salt Cess Act, 1953[2]

Taxation of salt[edit]

Salt taxation originated in ancient China. Guanzi, a book written in around 300 BC recommends taxation of salt and propounds different methods for this purpose.[3] The recommendations of Guanzi became the official salt policy of early Chinese Emperors. At one point of time, salt taxes constituted over one half of China's revenues and contributed to the construction of the Great Wall of China.

Salt was also important in the ancient Roman Empire. The first of the great Roman roads, the Via Salaria, or Salt Road, was built for transporting salt.[3] However, unlike the Chinese, Romans did not monopolize salt.[3]


Taxation of salt in India[edit]

Salt-producing areas in India[edit]

Salt has been produced all along the Rann of Kutch on the west coast of India for the past 5,000 years.[3] The Rann of Kutch is an extensive marshland which is cut off from the rest of the Indian subcontinent during monsoons when the seas inundate the low-lying areas. However, when the sea water evaporates during summer, it leaves behind a crust of salt which accumulate as salt pans.[3] This salt is collected by laborers called malangis.[3]

On the eastern coast, salt could be obtained extensively along the coast of Orissa.[3] The salt produced by the salt pans called khalaris in Oriya is of the finest quality in all India.[3] There has always been a demand for Orissa salt in Bengal.[3] When the British took over the administration of Bengal, they too felt its need and traded for salt. Gradually they monopolized Orissa salt all over Bengal.[3] To check smuggling and illegal transportation, they sent armies into Orissa, resulting in the conquest of Orissa in 1803.[3]

Taxation of salt before British rule[edit]



Taxation of salt by the British East India Company[edit]

In 1759, two years after its victory at the Battle of Plassey, the British East India Company came into possession of land near Calcutta where there were salt works.[5] Utilizing this opportunity to make money, they doubled the land rent and imposed transit charges on the transportation of salt.[5]

In 1764, following the victory at the Battle of Buxar, the British began to control all the revenues of Bengal, Bihar and Orissa. Robert Clive, who returned as Governor-General in 1765, made the sale of tobacco, betel nut, and salt (apart from other accessories and essential spices and condiments), the monopoly of the senior officers of the British East India Company. Contracts were given to deliver salt to depots,[5] and merchants were required to buy from these depots.[5]

Outrage was expressed by the authorities in England who declared:

We consider it too disgraceful, and below the dignity of the present situation, to allow such a monopoly.


However, the authorities in England were stubborn, and due to the pressure they exerted, the monopoly of tobacco and betel nut was stopped on 1 September 1767, followed by the annulment of the salt monopoly on 7 October 1768.

In 1772, the then Governor-General Warren Hastings brought the salt trade once again under the Company's control. The salt works were leased out to farmers who agreed to deliver salt at a fixed rate to the Company, and sold the leases to the highest bidders. Corruption dealt a severe blow to the Company and the revenue from salt trade fell to 80,000 rupees by 1780. This, along with the exploitation of the malangis or salt workers by their landlords, forced Hastings to introduce a new system for controlling the salt trade in India.

In 1780 Hastings brought the salt trade once again under government control, dividing the infrastructure into Agencies each under the control of an agent and governed by a Controller. This system persisted, with minor modifications, until India's independence in 1947. Under this new system, the malangis sold the salt to the agents at a particular price, initially fixed at 2 rupees a maund with a tax of 1.1 to 1.5 rupees a maund. This new system was a success, and in 1781-82, the salt revenue was 2,960,130 rupees. The Company received salt revenue of 6,257,750 rupees in 1784-85.

From 1788 onwards, the Company began selling salt wholesalers by auction. As a result, the British East India Company increased the tax to 3.25 rupees a maund, and the wholesale price of salt increased from 1.25 to about 4 rupees a maund. This was an exorbitant rate that few could afford.

In 1804, the British monopolized salt in the newly conquered state of Orissa. In return, they advanced money to the malangis against future salt production, resulting in the malangis becoming debtors to the British, virtually becoming economic slaves. The Orissa Zamindars, who had earlier controlled the local salt trade, were alarmed at the sudden loss of income, and tried to persuade the malangi not to work for the British, but to no avail.

In the early 19th century, to make the salt tax more profitable and reduce smuggling, the East India Company established customs check points throughout Bengal. Mr. G. H. Smith established a "Customs Line", which was the boundary across which salt transportation involved payment of high customs duties. In the 1840s a thorn fence was erected along the western frontiers of Bengal province to prevent salt smuggling. Eventually, after 1857, the thorn fence grew to be 2,500 miles long, following India's eastern frontier and Orissa.


— (Strachey and Strachey 1882, 219-20)

Taxation of salt by the British authorities[edit]

The taxation laws introduced by the British East India Company were in vogue during the ninety years of British Raj which followed the demise of the Company. The construction of a fence to prevent smuggling of salt, which was commenced during the Company's rule, was completed during this period. Sources indicate that by 1858, British India derived 10% of its revenues from its monopoly of salt.[6] However, by the end of the century, the tax on salt had been considerably reduced.[6] In 1880, income from salt amounted to 7 million pounds.[7]



Annual Tax Revenue[8]
Year Rs (million) £ (million)
1929-30 67 5.025
1930-31 68 5.1
1931-32 87 6.525
1932-33 102 7.65

Salt laws[edit]

The first laws to regulate the salt tax were made by British East India Company.





In 1944 the Central Legislative Assembly passed the Excises and Salt Act (Act No. I of 1944), which though modified in India and Pakistan, remain in force in Bangladesh.

A new salt tax was introduced, to the Republic of India, via the SALT CESS ACT, 1953, which received the assent of the President on the 26th December,1953, and was brought into force on the 2nd January, 1954[2]

Effects of the salt tax[edit]




Early protests against the British salt tax[edit]











Mahatma Gandhi and the salt tax[edit]




Gandhi Salt March[edit]

Mahatma Gandhi and other satyagrahis during the Dandi March
See also: Salt March

At the historic Lahore session of the Indian National Congress on 26 December 1929 in which Purna Swaraj was declared, a passing reference was made to the infamous and oppressive salt law and resolved that a way should be found to oppose it. In the first week of March 1930, Gandhi wrote to Lord Irwin apprising him of the prevailing social, economic and political conditions in the country.


Other salt satyagrahas[edit]


In April 1930, Congress leader Chakravarti Rajagopalachari led a salt sathyagraha in Vedaranyam, Madras province. The satyagrahis reached Vedaranyam on the east coast of India on 28 April, where they prepared salt illegally on 30 April.[15][16]


The British authorities turned deaf ears to the massive protests against the salt tax which rocked India during the early 1930s. The Dandi March was only partially successful. Though it forced the British rulers to come to the discussion table, the salt tax continued. It was only on 6 April 1946 that Mahatma Gandhi made a formal request to Sir Archibald Rowlands, the finance member of the Viceroy's Executive Council, to remove the oppressive salt tax.[7] Rowlands formally issued an order abolishing the salt tax, but the order was vetoed by the Viceroy, Lord Wavell.[7] The salt tax continued in force until March 1947, when it was abolished by the Interim Government of India headed by Jawaharlal Nehru , by the then-Finance Minister Liaquat Ali Khan.

A modified salt tax was later introduced, to the Republic of India, via the SALT CESS ACT, 1953, which received the assent of the President on the 26th December,1953, and was brought into force on the 2nd January, 1954.[2]

See also[edit]


  2. ^ a b c "The Salt Cess Act, 1953". indiankanoon.org. Retrieved 21 November 2016. 
  3. ^ a b c d e f g h i j k Mohinder Singh. "The Story of Salt". Retrieved 2008-05-09. 
  7. ^ a b c Gandhi; Anthony Parel (1997). Hind Swaraj and Other Writings. Cambridge University Press. p. 20. 
  8. ^ Rothermund, Dietmar (2002). An Economic History of India (revised ed.). Routledge. pp. 103,240. ISBN 1134879458. Retrieved 21 November 2016. 
  15. ^ Syed Muthahar Saqaf (30 April 2008). "The day Rajaji broke the Salt Law". The Hindu. Chennai, India. Retrieved 2008-05-09. 

Further reading[edit]

  • Kurlansky, Mark. (2002). Salt: A world history. (pp. 333–354, "Salt and the Great Soul"). New York: Penguin Books.