This type of society can be called a ‘feudal’ society, because the dominant
position was held by those who drew their sustenance from land without
working on it. The growth of such a society in north India during this period
had far reaching effects.
Agrarian Structure
Meaning of Feudal Economy An economy can be called ‘feudal’ if a
major section of the surplus production from land is appropriated by a
particular section of people who claim it as a hereditary right, even though
they do not participate in the production process in anyway.
Rise of Self-sufficient Village Economies A very important development
of the period was the rise of a self-sufficient village economy where
production approximated local requirements, with little attempt at producing
a surplus to be used specifically for trade or exchange. This existing system
led to accepting the standard of minimum production, since the incentive to
improve production was absent. So, as the pressure on the peasantry
increased, production stayed at a subsistence level only.
Decline of Trade The subsistence economy of the village naturally led to a
decline in trade, since there was little surplus production which could be
traded or exchanged. Trade was further hampered by the emergence of a wide
range of local weights and measures, making long distance trade more
difficult. Lack of trade led to a decrease in the use of coins, and this decrease
in turn led to a further decline in trade. The unstable political conditions and
the ceaseless internal fighting in India only helped this process of decline in
trade. There was also an important external development which contributed
to this decline. This was the decline of the Roman and Sassanid empires
which caused a set- back to the external demand for Indian goods in the
West.
Decline of Towns and Cities This decline in trade in turn affected the
growth of towns. Those that had attained a certain economic momentum
continued, but the founding of new towns was less frequent than before. The
Arab geographers, writing of this period, have commented on the paucity of
towns in India as compared with China. But in the coastal areas and Bengal,
towns were prospering because      they continued to trade with West Asia and