Permanent Settlement

Also called: Permanent Settlement of Bengal, Zamindari settlement · Topic: Colonial Economy: Land Revenue, Drain, Deindustrialisation · NCERT: Class 12, Ch 1 "Colonialism and the Countryside"; Class 12, Ch 2 "Rebels and the Raj"

Meaning

The Permanent Settlement (1793) was a land revenue system brought in by Governor-General Lord Cornwallis. Under it, the rajas and taluqdars of Bengal, Bihar and Orissa were called zamindars and had to pay the Company a revenue demand that was fixed forever. If a zamindar did not pay on time, his estate was auctioned.

It matters because it set up a class of rent-collecting landlords that lasted until 1947 [2]. It is also the starting point for comparing all the colonial land revenue systems: Permanent Settlement, Ryotwari and Mahalwari.

Explanation

Background: why the Company fixed the revenue

• In 1765 the East India Company got the Diwani of Bengal. Diwani was the right to collect land revenue.
• By the 1770s Bengal's villages were in crisis. There were repeated famines, and farm output was falling.
• The Company's diagnosis:
• Nobody was putting money into land.
• Nobody had secure property rights.

• Nobody knew what next year's tax would be.

• The Company's solution: fix the revenue demand permanently and give secure rights. It expected three results:

• The Company would get a steady, predictable revenue every year.
• Investors would expect sure profits, so they would invest in land.
• A class of loyal "yeomen" farmers and rich landowners would grow. These men would have a stake in British rule and would not rebel.

Main features: how the system worked

• Who made it, and when: Lord Cornwallis, Governor-General of Bengal 1786–93 [2].
• The law behind it:
• Bengal Regulation I of 1793 (the Bengal Permanent Settlement Regulation) made the settlement perpetual (lasting forever) [3].

• An earlier Bengal Regulation VIII of 1793 covered the Decennial Settlement, a ten-year trial version that was later made permanent [3].

• Who the settlement was made with: not the peasants who ploughed the land. It was made with the rajas and taluqdars, who were all given one new label: zamindar.

• Size of an estate: a zamindari (a zamindar's estate) was made up of many villages, sometimes about 400 villages in one estate.
• The zamindar's role (NCERT view): the zamindar was not a landowner. He was a revenue Collector of the state.
• He collected rent from the ryots (peasants who tilled the land).
• He paid the fixed revenue to the Company.

• He kept the difference as his income.

• A second view: Britannica says the zamindar got a commission for collecting and was treated as the owner of his zamindari. Waste lands were left to him, but his estate could be sold if he fell behind on payment [2]. Both views describe the same arrangement. One looks at its legal form. The other looks at what the Company said the zamindar was. In the exam, write the NCERT position.

• "Permanent" meant one thing: the sum to be paid never changed.
• Sunset Law: if the revenue was not paid by sunset on the fixed date, the estate could be auctioned.

How it worked in practice: why zamindars kept failing

1. The first demand was set very high.

• The demand was frozen forever, so the Company made it heavy at the start.
• Its reasoning: if the demand were fixed low, the Company could never claim a share of later income when prices rose and more land was farmed [2].
• Officials said the burden would "decline gradually" as prices rose. That had not happened yet.

2. Farm prices were low in the 1790s.

• Crop prices were low in exactly those years.
• The ryots could not pay the zamindar.
• So the zamindar could not pay the Company.

3. The demand was fixed and had to be paid on time.

• The amount was the same in a good harvest or a failed one.
• Drought and flood were not accepted as excuses. Late payment brought auction under the Sunset Law.

4. The same settlement took away the zamindar's power.

• His troops were disbanded.
• His customs duties were abolished.
• His cutcheries (local courts) were put under a Collector appointed by the Company.
• Result: the collectorate (the Collector's office) became a rival centre of power in the district. The zamindar still had to get rent out of the villagers, but he had lost the armed men and courts that once made them pay.

Collecting the rent. The zamindar's officials, the amlah, collected rent. Collection often failed for three reasons:

• Bad harvests: the ryot really had nothing to pay.
• Deliberate delay: ryots held back payment because they knew the Sunset Law would hurt the zamindar.
• Rich ryots and village headmen blocking collection: they gained if the zamindar fell.

The zamindar could go to court over unpaid rent, but the courts were very slow. Burdwan district alone had over 30,000 pending suits for rent arrears in 1798. So the court remedy came too late, and the Sunset Law deadline never moved.

Results

• The settlement did not create the investing, improving landlords the Company had hoped for.
• It did create a landed aristocracy in Bengal and Bihar that lasted until independence in 1947 [2].
• Smaller landholders below the zamindar became his tenants [2].
• Sub-letting spread. The Bengal Patni Taluks Regulation VIII of 1819 gave legal form to patni tenures. Under a patni tenure, a zamindar leased part of his estate at a fixed rent to an under-tenure holder [3].
• Tenants got some protection only much later, and only partly, through the Bengal Rent Act, 1859 [3].
• Link to the drain of wealth: Indian land revenue paid for the goods the Company bought in India and sent to Britain. In effect, India's exports were partly paid for with India's own taxes.
• Link to famine: peasants owed a fixed cash payment whatever the harvest. They had to sell grain for cash even in bad seasons, which made famines worse.
• Link to deindustrialisation: weavers lost their markets to British machine-made cloth and went back to farming. This put more pressure on land that was already heavily taxed.

Time, place and evidence

• Period: 1793, in the early phase of Company rule (Diwani 1765 → crisis of the 1770s → Decennial Settlement → Permanent Settlement).
• Ruler or official: Lord Cornwallis, Governor-General 1786–93 [2]. He also passed the Cornwallis Code (1793), a set of legal and administrative reforms, before leaving office on 13 August 1793 [2].
• Region: Bengal, Bihar and Orissa were settled on this basis [2]. Burdwan district is the standard example of the rent-suit problem.
• Key groups: zamindars (former rajas and taluqdars), ryots, the amlah, rich ryots and village headmen, and the Company Collector.
• How we know:
• Official law texts: Bengal Regulation I of 1793, Bengal Regulation VIII of 1793, Bengal Regulation VIII of 1819 and the Bengal Rent Act, 1859. They are published by India Code, Legislative Department [3].
• Court and district records: for example, the 30,000+ pending rent suits in Burdwan in 1798.
• NCERT Class 12, Ch 1 "Colonialism and the Countryside" is the main textbook account. It also draws on the Fifth Report (1813), a report on Company administration that was placed before the British Parliament.
• Reference works: Encyclopaedia Britannica's entries on Cornwallis and on Bengal in the British period [2].

Don't confuse with

• Decennial Settlement (Bengal Regulation VIII of 1793): this was a ten-year settlement, the trial version. The Permanent Settlement (Bengal Regulation I of 1793) fixed the demand forever [3].
• Cornwallis Code (1793): a wider package of legal and administrative reforms [2]. The Permanent Settlement was specifically the land revenue arrangement.
• Ryotwari system: the settlement was made directly with the ryot (the cultivator), and the revenue was revised from time to time. Under the Permanent Settlement it was made with the zamindar, and the demand was fixed forever.
• Mahalwari system: the settlement was made with the village community or mahal (a village or group of villages) as a unit. Under the Permanent Settlement it was made with individual zamindars who held large estates.

Prelims Hooks

• Permanent Settlement: 1793, Lord Cornwallis (Governor-General 1786–93). Regions covered: Bengal, Bihar and Orissa [2].
• Bengal Regulation I of 1793 = Permanent Settlement. Bengal Regulation VIII of 1793 = Decennial Settlement [3]. This is a common trap: both are from 1793.
• Sunset Law: revenue not paid by sunset on the fixed date meant the estate could be auctioned.
• Chronological order: Diwani of Bengal (1765) → Permanent Settlement (1793) → Patni Taluks Regulation (1819) → Bengal Rent Act (1859) [3].
• Trap: per NCERT, the zamindar was a revenue Collector of the state, not a landowner. Rent was collected by his officials, the amlah. Burdwan had 30,000+ rent suits pending in 1798.

Mains Points

• It failed its own test. The aim was investment in farming through secure rights. Instead, three things together pushed zamindars into default and auction: a very high starting demand, low crop prices in the 1790s, and the strict Sunset Law. Security of tenure meant nothing if the holder could not pay.
• A political project as well as a revenue one. The Company gave the zamindar the duty of collecting rent but took away the means: his troops, customs duties and cutcheries. The collectorate became a rival power centre. This lets you argue that the settlement was also about disarming local magnates (powerful local chiefs).
• Who gained, and what it led to. The ryot did not gain. The settlement created a rent-receiving aristocracy that lasted until 1947 [2]. Smaller holders were pushed down into tenancy [2], and patni sub-letting spread from 1819 [3]. A fixed cash demand forced distress sales of grain and gave the Company a steady revenue stream that fed the drain of wealth. This links land policy to famine, and it is the structure that land reform after independence had to dismantle. Compare it with Ryotwari and Mahalwari to show that revenue policy varied by region but took heavily from peasants everywhere.

Related concepts

• Izaradari system
• Lord Cornwallis
• Mahal
• Collector
• Amlah
• Cutcherry
• Sunset law
• Bengal Tenancy Act 1885

Read more

• The Permanent Settlement in Bengal (1793)