Permanent Settlement Fixed Demand Explained

The Permanent Settlement, established in 1793 by the British East India Company under Lord Cornwallis, was a pivotal land revenue system primarily implemented in the Bengal Presidency.

A key feature of this system was fixing the land revenue demand from the zamindars (landlords) in perpetuity. This meant the amount payable to the Company was fixed and could not be increased or decreased, regardless of changes in the actual rental income derived from the land.

Revenue Allocation Under Permanent Settlement

The settlement outlined a specific division of the rental income collected by the zamindars from the cultivators:

• The zamindars were obligated to pay 89 percent of the rental income they collected to the East India Company. This portion represented the fixed land revenue demand.
• The remaining 11 percent of the rental income was retained by the zamindar. This share was meant to cover their management costs and provide them with a profit margin.

Consequently, the demand that was fixed under the Permanent Settlement was set at 89 percent of the rental collected by the zamindars.