In 1793, Lord Cornwallis started the Permanent Settlement of Land Revenue. The Permanent Settlement was called by different names such as Istamrari, Jagirdari, Malguzari, Bishvedari and Zamindari. This system was most prevalent in Bengal, Bihar, and Orissa and later it was introduced in Varanasi and Madras. 19% of British India was under Permanent Settlement. A new section of Zamindars were announced as landowners who were to provide 10/11 of the total revenue to the Company and were paid the rest 1/11 of the total revenue for their duties. The Zamindari system collected land revenue from farmers through intermediaries known as Zamindars.

Background of Permanent Settlement

• Prior to the arrival of the British in Bengal, there was a class of Zamindars in Bengal, Bihar, and Odisha who collected land revenue on behalf of the Mughal Emperor or his representative, the Diwan.
• The East India Company was granted the Diwani of Bengal following the Battle of Buxar in 1764. However, the Company soon discovered that it was unable to collect revenue from the vast majority of farmers in rural areas. They also lacked an understanding of local laws and customs.
• Warren Hastings attempted to enact some reforms, such as the five-year inspections. In this case, the revenue collection was awarded through an auction to the person who promised the most revenue.
• Hastings also experimented with annual land settlement due to the dangerous implications and effects of such a system. However, this did not improve the situation.
• In 1786, Lord Cornwallis proposed the Permanent Settlement system on the orders of the then-British Prime Minister, William Pitt. The Permanent Settlement Act of 1793 put this into effect.

Features of Permanent Settlement

• Landlords, also known as Zamindars, were recognised as landowners. They were given hereditary succession rights to the lands under their control.
• The Zamindars were free to sell or transfer the land as they saw fit.
• The Zamindars' proprietorship would last as long as he paid the government the fixed revenue on the specified date. If they didn't pay, their rights would be terminated and the land would be auctioned off.
• The landlords were required to pay a set amount. It was decided that this would not be increased in the future (permanent).
• The fixed amount was 10% of the revenue for the government and 10% for the Zamindar. This tax rate was significantly higher than the current rates in England.
• The Zamindar was also required to give the tenant a patta that described the area of the land given to him as well as the rent he was required to pay the landlord.

Drawbacks of Permanent Settlement

• The revenue was fixed at a high rate, leaving many zamindars with little or no margin for shortfalls in times of flood, drought, or another calamity.
• Due to the high rates, many zamindars were forced to divide their estates into small lots of land known as patni( taluq) and rent them out permanently to holders on the promise of a fixed rent. As a result, the process of subinfeudation began.
• According to the agreement, zamindars were required to issue written agreements (pattas) to each cultivator outlining how much the tenant was to pay.
• According to the government, there was no way to raise the tax, so revenue could not increase to meet the growing expenses of the Company, which was attempting to expand.

Impact of Permanent Settlement

For the Cultivators: Cultivators found the system oppressive and exploitative in villages because the rent they paid to the zamindar was very high while his right to the land was quite insecure.

Cultivators were frequently forced to take out loans to pay their rents, and if they failed to do so, they were evicted from the land.

For the Zamindars: The revenue had been set at such a high level that the zamindars found it difficult to pay, and those who did not pay the revenue lost their zamindari.

The zamindars were uninterested in improving the land. They preferred it as long as they could rent the land out.

For the Company: By the first decade of the nineteenth century, cultivation had gradually expanded and market prices had risen. Although this meant an increase in Zamindars' income, it was a loss for the company because it couldn't increase a revenue demand that had been set in stone.

Conclusion

As a result, the Permanent Settlement benefited no one except the landlords. It proved to be more harmful than beneficial. Furthermore, whatever advantages it had, those could be obtained through a settlement that spanned nearly fifteen to twenty years. The Company recognized this as well and, as a result, did not introduce it in other parts of India except Northern Sarkars in the south and the district of Banaras in the north. Following India's independence, the permanent settlement system was completely abolished.

FAQs

MCQs

1. Who introduced the Permanent Settlement in India?

A. Lord Curzon
B. Lord Cornwallis
C. Lord Wellesley
D. Warren Hastings

2. Which of the following was NOT a feature of the Permanent Settlement?

A. Fixed revenue system
B. Zamindars recognized as landowners
C. Direct collection of revenue by the British
D. Hereditary succession of Zamindari rights

3. The Permanent Settlement system primarily affected which regions in India?

A. Punjab
B. Bengal, Bihar, and Orissa
C. Madras
D. Bombay

4. What would happen if a Zamindar failed to pay the fixed revenue?

A. Revenue was reduced
B. The Zamindar’s land was auctioned
C. The Zamindar was imprisoned
D. No action was taken

5. Why did the Permanent Settlement lead to agricultural stagnation?

A. High investment in infrastructure
B. Lack of incentives for Zamindars to improve land
C. The influx of foreign technology
D. Industrial revolution

GS Mains Questions and Model Answers

Q1: Discuss the impact of the Permanent Settlement on Indian agriculture and the rural economy.

Answer: The Permanent Settlement led to widespread stagnation in agriculture as it offered no incentives for Zamindars to improve land productivity. The high revenue fixed by the British burdened both Zamindars and peasants, leading to indebtedness and rural exploitation. Agricultural innovation and investment were limited, ultimately hindering the long-term development of India's rural economy.

Q2: Critically evaluate the Permanent Settlement's effect on the Zamindari class and the British government.

Answer: The Zamindars gained significant power and control over land but were burdened by fixed revenue obligations, leading many into debt. While it ensured a stable revenue for the British initially, the inability to increase revenue as agricultural prices rose led to long-term financial challenges for the British government.

Q3: How did the Permanent Settlement contribute to social and economic divisions in rural India?

Answer: The system created a class of wealthy Zamindars, while the peasants faced heavy exploitation. The gap between landowners and cultivators widened, contributing to social unrest and economic disparities. Over time, the inability to cope with natural calamities further deepened rural poverty.

Previous Year Questions on Permanent Settlement

1. UPSC CSE Prelims 2019

Question: The Permanent Settlement of Bengal, introduced by Lord Cornwallis, established the position of the Zamindars in Bengal. Which of the following statements is correct?
A. The Zamindars were not recognized as landowners.
B. The revenue demand was permanently fixed.
C. The British collected revenue directly from the peasants.
D. The Zamindars had no rights to transfer land.

Answer: B

Explanation: Under the Permanent Settlement, the revenue demand was permanently fixed and Zamindars were recognized as landowners responsible for collection.

2. UPSC CSE Mains 2017 (GS Paper 1)

Question: "Analyze the socio-economic impact of the Permanent Settlement system introduced by the British in India."

Answer: The Permanent Settlement created socio-economic inequalities by empowering Zamindars while leaving the peasants in a vulnerable position. The system ignored agricultural development, leading to stagnation. While the British gained stable revenue initially, the fixed revenue system proved unsustainable in the long run, as it failed to adapt to changing economic conditions.