During the Maratha period a large quantity of salt was manufactured in the sea coast of Odisha. Salt manufacture was a private concern of the malangis (salt manufacturers). The merchants were purchasing salt from the Malangis and exporting the same to the neighbouring states.
The Maratha Government did not interfere with the manufacture of salt but collected duties from the salt merchants. The East India Company had established its monopoly over salt trade in Bengal as early as 1765. Under East India Company’s monopolistic salt trade the salt price of Bengal was higher than that of Odisha. Consequently large quantity of salt was smuggled from Odisha to Bengal. So the East India Company had tried to secure control over the salt trade of Odisha by an agreement with the Marathas long before they actually occupied Odisha, but the Marathas had refused to give this concession to them.
Establishment of trade monopoly by the British
After the occupation of Odisha the East India Company decided to establish its monopoly over the salt manufacture and trade of Odisha. According to the Regulation of 1804, the manufacture of salt became the monopoly of the Company’s Government. The private manufacture of salt was allowed only under license from the Government and the sale of the commodity was made subject to the payment of a duty of twelve annas per maund. The Regulation XXII of 1814 made the manufacture and sale of the salt an exclusive monopoly of the Company’s Government. In 1806, James King took charge of the salt department as tile salt agent. Under his supervision salt was manufactured in the aurangs of Balasore, Cuttack and Puri districts by the malangis. Large quantity of salt was exported from Orissa by the East India Company, resulting in securing to the Company huge revenue. At the end of East India Company’s rule, the net revenue derived from local sale and export of salt was 45 lakhs of rupees, which was much higher than the income, derived from the land revenue.
Huge profit out of Salt monopoly
While the East India Company made huge profit out of monopoly in manufacture and sale of salt, the malangis and common consumers suffered. The malangis who were employed by the British Government were paid low wages, and yet they were required by the zamindars in whose land salt was manufactured to pay the latter’s due as was the case before the establishment of the British monopoly. In 1808, the salt agent James proposed that the salt lands within the zamindar’s jurisdiction should be transferred to that of the salt department. The proposal was worked out, subject to the payment of 1 1/2 annas per maund of the manufactured salt and certain amount of salt as Khorakee (dietary allowance) to the zamindars in whose estates salt was manufactured.
Sufferings of general public
The general public had to purchase salt at a much higher rate under the British monopoly than during the Maratha period because of the higher taxes imposed on salt. The price of salt, manufactured under the monopoly system, was deliberately raised to help the sale of imported salt, and ultimate replacement of indigenous salt by the imported salt.
By 1860, the fine and cheap Liverpool salt was being sold in large scale in Ortssa; as by that time the native prejudice against the foreign salt had disappeared. The British Government stopped manufacture of salt and abolished monopoly over salt trade in 1863. The manufacture ofsalt was hereafter allowed to be carried on through private enterprise under the excise rules of Act VII (B.C.) of 1864. Under these excise rules, a salt manufacturer was required to pay duty to the Government. The salt industry could not be revived any more, because indigenous salt could not compete with the imported salt of superior quality. The indigenous salt industry virtually ended with the abolition of the British salt monopoly and discontinuance of Government manufacture of salt resulted in depriving 26 thousands of malangis of the means of their livelihood.
The British Government was not even favourably inclined towards the local manufacture of salt under excise system, and was keen on suppressing illicit manufacture of salt, as it deprived the Government of excise revenue on salt. In 1889 the Government prohibited the manufacture of Panga salt (salt boiled out of salt earth scraped up in saliferous soil).
End of indigenous salt factories in Odisha
In 1891 the Government made an attempt to manufacture salt on a monopoly basis by establishing salt factory at Tua and Gurubai on the Chilika lake (in Puri district). The Tua and Gurubai factories were closed in 1902. The failure of these two factories was due to the lack of proper official supervision and inadequate sale. From the stoppage of Government’s salt manufacture in 1863 upto the beginning of the twentieth century, Liverpool salt dominated Orissa salt market. From the beginning of the present century, due to the facilities of railway transport the Madras salt became a serious competitor for the Liverpool salt.
Credit: Inputs from History of Odisha From 1803 to 1948 by Dr Manas Kumar Das