With the self-proclaimed title of the first Nizam of Hyderabad, Asaf Jah 1 took over control of the Deccan region including Hyderabad. The death of Aurangzeb in 1707 saw the weakening of the Moghul rule, the Deccan region was neglected. Unrest grew as members of the Aurangzeb family fought to take his place.
Asaf Jah 1 also started the Asaf Jahi dynasty, the reign of the dynasty went on until Asaf Jah 7 or the 7th Nizam of Hyderabad. The famed Golconda diamond mines fell within the territory administered by the Nizams. Asaf Jah 1 ensured that the mines were well guarded. Diamonds also drained into the riverbeds and streams, he realized that these areas would also need to be secured.
The Nizams (1 to 7) had the interest of Hyderabad and the welfare of the people in their heart. Revenue collection had to run efficiently to ensure that, funds for development, welfare and security would be available. The foundation for an efficient administrative and revenue system in the Deccan region, was set up by Asaf Jah 1 as the first Nizam. focused on building a stable administrative and revenue system in the Deccan region. Asaf Jah 1 retained the Mughal-style zabt system, which assessed land revenue based on crop yields, soil type, and local conditions. By strengthening oversight and appointing competent officials, Asaf Jah I curbed corruption and leakages in the revenue system.
Diamonds were another sourced of revenue for the Nizams. By controlling the output from the Golconda diamond mines and overseeing the diamond trade in the region, the Nizams secured a significant share of income from the lucrative diamond business. Details of the Nizam’s treasury seem to show that, the finest diamonds were kept by the Nizams. Revenue from trade in the other diamond pieces, was split between the personal funds of the Nizams and the funds to be used for the development of Hyderabad.
Faced with a few persistent enemies, the Nizams were compelled to spend a substantial portion of their resources on maintaining strong external security. The generation of revenue to maintain a big and strong military, was vital. As the British and French started showing interest in the Deccan region, Asaf Jah 2 the second Nizam of Hyderabad, negotiated a different strategy to ensure external security.
Asaf Jah 2 is believed to have acquired military protection from the French for an agreed sum of money. The context of Golconda diamonds, was involved in this transaction with the French. Various narrations seem to suggest that, a fancy color blue diamond from the Golconda mines, was handed over to the French as a mode of payment for military protection. It is believed that the diamond was at one time, set in a lavish turban ornament worn by Asaf Jah I, the fist Nizam of Hyderabad.
Under Nizam rule, Hyderabad developed into a prosperous state, with the Nizams giving due attention to the welfare of the people. The Nizams were considered to be one of the wealthiest ruling dynasties of their time. The Nizam rule began in 1724, spanned 7 Nizams and ended in 1948 when the Indian government, included Hyderabad as a part of India.
