What do you understand by the term ‘jajmani system’?

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → A non-market exchange system.

Option (1) A non-market exchange system. — Correct. Under the jajmani system, families of different castes exchanged services and goods on the basis of caste duties and long-standing ties: the service castes worked for landowning families and were paid in grain and other goods, not at a market price. It is a non-market exchange system.

Option (2) Indigenous banking system. — Incorrect. Indigenous banking refers to the banking and credit systems of the traditional trading communities, such as the hundi, a bill of exchange that let merchants trade over long distances. The jajmani system involves no lending or credit; it is an exchange of services within the village.

Option (3) Caste-based banking system. — Incorrect. A caste-based banking system is one like that of the Nakarattars of Tamil Nadu, who loaned and deposited money with one another within caste-defined relationships. Jajmani ties exchange work and grain, not money deposits.

Option (4) A system of commodity production. — Incorrect. Commodity production means making goods to be sold in the market. Under the jajmani system services were given and paid for through caste ties, outside the market.

NCERT (2025-26): “Caste-based markets and trading networks in precolonial and colonial India … While colonialism certainly brought about major economic transformations, for example due to the demand that land revenue be paid in cash, recent historical research has shown that much of India’s economy was already extensively monetised (trade was carried out using money) in the late pre-colonial period. And while various kinds of non-market exchange systems (such as the ‘jajmani system’) did exist in many villages and regions, even during the precolonial period villages were incorporated into wider networks of exchange through which agricultural products and other goods circulated (Bayly 1983, Stein and Subrahmanyam 1996). It now seems that the sharp line that was often drawn between the ‘traditional’ and the ‘modern’ (or the pre-capitalist and capitalist) economy is actually rather fuzzy.…”

“Caste-based markets and trading networks in precolonial and colonial India … These traditional trading communities or castes had their own systems of banking and credit. For instance, an important instrument of exchange and credit was the hundi, or bill of exchange (like a credit note), which allowed merchants to engage in long-distance trade. Because trade took place primarily within the caste and kinship networks of these communities, a merchant in one part of the country could issue a hundi that would be honoured by a merchant in another place.”