The revenue administration was a complicated affair and no permanent decision was taken about it prior to the arrival of Lord Cornwallis in India. The Directors had instructed Cornwallis that after assessing the revenue records of some past years, a settlement should be made with zamindars for some years but with a view that it could be made permanent in the near future. These instructions of the Directors were the primary cause of the Permanent Settlement in Bengal, Bihar, and Orissa concerning revenue. Therefore, it is wrong to assume that Cornwallis, because of his background as a landlord in England, was motivated in having a permanent settlement with the zamindars in Bengal. Sarkar and Datta write: “The Permanent Settlement was no product of any preconception of Lord Cornwallis in favour of the landlord system in England. “However, there were certain questions concerning revenue.
Before the British advent in Bengal, there were a class of Zamindars in Bengal, Bihar, and Odisha who collected revenue from land on behalf of the Mughal Emperor of his representative, the Diwan.
After the Battle of Buxar in 1764, the East India Company was granted the Diwani of Bengal. But then the Company found itself not able to collect revenue from the innumerable number of farmers in rural areas. They also did not have a good understanding of local laws and customs.
The severe Bengal famine of 1770 occurred partly due to this neglect by the Company.
Then, Warren Hastings tried to bring in some reforms like the five-yearly inspections. Here, the revenue collection was awarded through an auction to the person promising the highest revenue. Due to the dangerous implications and effects of such a system, Hastings also experimented with the annual settlement of land. But this too did not improve conditions.
Then, Lord Cornwallis under directions from the then British PM, William Pitt, proposed the Permanent Settlement system in 1786. This came into effect in 1793, by the Permanent Settlement Act of 1793.
Features of The Permanent Settlement
- Landlords or Zamindars were recognised as the owners of the land. They were given hereditary rights of succession of the lands under them.
- The Zamindars could sell or transfer the land as they wished.
- The Zamindars’ proprietorship would stay as long as he paid the fixed revenue at the said date to the government. If they failed to pay, their rights would cease to exist and the land would be auctioned off.
- The amount to be paid by the landlords was fixed. It was agreed that this would not increase in future(permanent).
- The fixed amount was 10/11th portion of the revenue for the government and 1/10th was for the Zamindar. This tax rate was way higher than the prevailing rates in England.
- The Zamindar also had to give the tenant a patta which described the area of the land given to him and the rent he had to pay the landlord.
Merits of The Permanent Settlement
- The responsibility of taking care of farmers fell upon the shoulders of the Indian landlords. Being sons of the soil, they could reach the far corners of the region and also understand local customs very well.
- Because of the permanent nature of the system, there was a sense of security for everyone. The company knew the amount it would get in revenue. The landlord also was assured of the amount. Finally, the farmers also, in lieu of the patta were certain of their holdings and knew how much rent was to be paid.
- Since the settlement was of a permanent nature, the Zamindars would have an interest in the improvement in the land thereby improving the revenue.
Demerits of The Permanent Settlement
- The basic demerit of this system was that the efficiency depended upon the nature of the Zamindars. If they were good, the interests of the farmers and the land were looked after very well. They would make improvements in the land which would be beneficial to everyone concerned. But if the landlords were bad, they were negligent of the plight of the farmers and the conditions of the land.
- This created a class of hereditary landlords forming the upper aristocracy in society who generally led luxurious and extravagant lifestyles.
- The Zamindars were generally favourable to the British administration and supported the British even during the freedom struggle. There were exceptions.
- The land assessment was not done properly and land revenue was fixed arbitrarily. This meant that both productive and unproductive land was expected to furnish revenue at the same rates. This created a burden on the farmers of unproductive land. Also, in the case of productive land, it was a loss of revenue to the government.
- The revenue rates were so high that many Zamindars became defaulters. In time, this system proved to have disastrous effects. In 1811, the British government warned against the imposition of permanent settlement without a proper land survey.