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Permanent Settlement

Topic Introduction
The Permanent Settlement, also known as the Permanent Settlement of Bengal, was an
agreement between the East India Company and Bengali landlords to fix land revenue that had
significant ramifications for both agricultural practices and productivity throughout the British
Empire as well as the political realities of rural India.

The contract recognized Bengal's zamindars as the sole owners of landed property, entitling
them to participate in the colonial state system. Government revenue that was due to the
government was set in stone. Every individual zamindar and talukdar was made the sole and
absolute owner of the land under their control by the rules of the permanent settlement.
Zamindars and talukdars were obligated to pay revenue to the government at a fixed rate.
However, such a privilege was not extended to the farming raiyats. Landowners had complete
discretion over how much their tenants paid in rent. If they so desired, they could even evict their
tenants. However, if landowners fell behind on their payments, their lands would be sold at a
public auction to compensate for the difference. This strong law was called the Sun-set Law.

History
In the past, zamindars in Bengal, Bihar, and Orissa served as agents with the authority to levy
taxes on behalf of the Mughal emperor and his Bengali representative, the diwan. The zamindars
were under the diwan's supervision to make sure they were neither too
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lenient nor too strict. Following the Battle of Buxar in 1764, the empire granted the East India
Company the diwani, or over lordship, of Bengal, but it soon discovered that it was lacking in
trained administrators, particularly those who were familiar with regional customs and laws.
Landowners were consequently left unsupervised or reported to dishonest and sluggish officials.
As a result, profits were taken without consideration for local welfare or future income.
Company officials in Calcutta realized the value of oversight of revenue officials after the
devastating famine of 1770, which was partially brought on by this lack of foresight. Governor-
general at the time, Warren Hastings, instituted a system of inspections every five years and
temporary tax farmers. For a number of reasons, including the Company's desire to avoid
upsetting those who had historically held positions of authority and prestige in rural Bengal, the
company officials did not want to directly take control of local administration in the villages.

The issue of incentivization was not considered by the Company. During the intervals
between inspections, many appointed tax farmers stole as much money as they could. The
system's disastrous effects were noted by the British Parliament, and British Prime Minister
William Pitt the Younger ordered the Calcutta administration to change it right away in 1784.
Charles Cornwallis was dispatched to India in 1786 to overhaul the business' procedures. A
permanent settlement for Bengal was first proposed by the East India Company Court of
Directors in 1786, altering Calcutta's previous strategy of trying to tax zamindars more heavily.
The question of whether or not to establish a permanent settlement with the zamindars sparked a
contentious argument between Sir John Shore and the Governor-General Lord Cornwallis
between 1786 and 1790. Shore argued that it would take time for the local zamindars to realize
that the permanent settlement was real because they would not trust it to be so.

The primary objective of the Permanent Settlement was to address the issue of the agrarian crisis
and distress that had led to decreased agricultural output. The British government believed that
investments in agriculture, trade and the resources of the State can be boosted by agriculture. The
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system that became known as the "Permanent Settlement" was implemented in order to
permanently fix the revenue and secure property rights. The British believed that there would be
a consistent flow of tax revenue once the State's financial requirements were set in stone.
Landowners would also invest in their agricultural properties because producers can keep
surpluses above the fixed tax.

The British, who were still establishing themselves in the Indian subcontinent, could count on
the support of this newly emerging class. Although the policy had good intentions, it was unable
to locate anyone who was willing to sign a contract for a fixed annual payment and make
investments in agriculture. The Bengali Rajas and Taluqdars, who were then considered
Zamindars, reached a permanent settlement with the British after much debate and disagreement
among the officials. Zamindars were required to make a fixed annual payment. They were
therefore not the actual landowners but rather the State's agents for collecting taxes. Cornwallis
believed that the Zamindars would immediately accept it and so begin investing in improving
their land. The zamindars received a ten-year (decennial) settlement from the Court of Directors
in 1790, which was later made permanent in 1793.The Zamindars lost their right to maintain an
armed force as a result of the Permanent Settlement Act of 1793. They continued to serve only as
the nation's tax collectors. They were significantly diminished because they were no longer
permitted to hold any court proceedings because the company had appointed a collector to
preside over them. British officials believed that making investments in the land would boost the
economy.

Analysis
Some short-term goals were in mind as the permanent settlement with the zamindars came
into action. These can be categorized as:
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 Placing revenue paying on a definite footing and making revenue collection sure and
certain
 Ensuring a minimum revenue
 Relieving officials of revenue matter and engaging them to other spheres of
administration
 Forging an alliance between the zamindar class and the colonial rulers.

Government was successful in achieving these short-term objectives, if not entirely. In the
person of zamindar, the revenue-generating organization was given a firm foundation. Now that
the government knew how much money it would receive annually from land sales, the zamindars
were certain of their contractual obligations to the government. Prior to then, neither the
government nor the revenue payers were completely aware of their positions with regard to the
collection and payment of revenue.

The revenue law was a successful mechanism for ensuring a minimum level of revenue
collection, something that was difficult to imagine in the earlier era. The original terms of the
settlement did not satisfy the zamindars, so forming an alliance with the zamindar for political
purposes was not immediately possible. However, over time, as zamindari powers were
expanded and the government's demand for revenue weakened due to inflation and price growth,
the landlord class did cooperate with the government. They defended the government during the
sepoy uprising, the Swadeshi movement, and the militant nationalist movements at the beginning
of the 20th century.

On the eve of its implementation, the nobler long-term goals of the Permanent
Settlement were made clear in the various council minutes and correspondence. Its creators
believed that the new system, which had been designed with a built-in mechanism for social and
economic transformation, would operate in a way that would first result in capitalist changes in
agriculture and agrarian relations, and then eventually set off an industrial revolution in the
nation. Such a development would adequately make up for the short-term loss the government
purposefully suffered by fixing all future taxation on zamindars.
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Sadly, the long-term plan for the permanent settlement never came to pass. The zamindars,
old or new, never turned themselves into landlords like their British counterparts. Scholars are
unanimous in their assessment of the zamindars' failure to transform the nation, but they disagree
sharply on the reasons for their actions. Their strategy was to increase income through other,
more financially rewarding means, such as mahajani investment, grain trade, purchase of new
estates, bonds, urban properties, increasing rent, and imposing abwabs or illegal ceases on
raiyats, rather than improving the land through financial and organizational input.

Moreover, a market for land that didn't previously exist was created by the Company's policy
of selling any zamindari lands that were deemed to be in arrears at auction. Many of the new
purchasers of this land were Indian officials within the East India Company's government. The
bureaucrats were in a perfect position to buy lands that they knew were undervalued and thus
profitable. Additionally, their status as officials provided them with the chance to amass the
wealth required to buy land. They could also use system manipulation to get the land they
wanted put up for sale.

Living off of unearned income was the most notable legacy of feudal values that the
zamindars had inherited from the permanent settlement. In return for an annuity, they gave the
zamindari management and control over to a permanent intermediate class. In other words, since
they were the sole owners of the land, they made a second, permanent settlement with the
leaseholders that was essentially identical to the one they had already made with the government.
Their right to the land, not any claim to capital investment in it, allowed them to receive the
annuity from the perpetual tenure holders whose obligations and rights in relation to zamindars
were essentially the same as those owed to the government by zamindari. Consequently, the
tenure holders also created, in turn, sub-tenures, and the process of gradation sometimes went
down several steps. Indeed, this issue of the emergence of hierarchical intermediate classes in
land control had significant economic and social repercussions. Revenue survey records from
1860 to 1870 and records of survey and settlement operations from 1886 onward show that the
zamindars who had established intermediate tenures following the permanent settlement were
largely spared from the application of the "sunset law" and that the rent burden on raiyats was the
greatest in those estates where the chain of intermediate tenures was the highest.
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The zamindar class' success did not translate into the peasantry's success (raiyats). The
zamindars and intermediate interests systematically extracted the surpluses from the peasants
through increased rent and a variety of impositions, including abwabs, tuhuri, dasturi, chandas,
bhet, nazrana, begar, selami, etc. The most overt sign of the tense bond between the zamindars
and raiyats was a series of peasant uprisings that began in most of Bengal in the late 1850s,
especially in eastern Bengal. Peasant unrest first occurred in the Santal Pargana district (1855),
and then spread to the indigo districts (1859-61). From 1858 to 1860, the indigo resistance
movement persisted. The peasants formed jotes (alliances) among themselves in several areas of
eastern Bengal in the 1870s and early 1880s to assert their rights to the land and reduce the
extraction of surpluses by zamindars, which marked a worrying turning point in the peasant
resistance movements.

These uprisings indicate for certain the gradual erosion of the permanent settlement. The
proprietary classes had lost their grips on the raiyats who were now asserting their rights in land.
As the situation changed, the government was no longer able to dismiss the peasantry's interest
in land, particularly that of its wealthy segment. The government was made aware of the risks of
continuing to ignore the rural cause by the Sepoy Revolt and indigo disturbances. Saving the
protesting peasantry while also preserving the obedient zamindar class was a political imperative
for the imperial government.

Historical Impacts

The Misery of the Farmers

The Permanent Settlement didn’t bring any improvement to the tenants and peasants. The old
ownership of the land was abolished forever. Moreover, they lost ownership of the land. The
zamindars used to oppress in various ways and could evict the farmers at any time they wished.
Farmers did not get proper remuneration even after working hard. As a result, the people became
inattentive to agriculture. Later, the Tenancy Act was enacted to protect the tenants from the
oppression of the zamindars.
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Destruction of Native Industry

This act ended up being one of the causes of the local cottage industries' demise. Lord
Cornwallis informed the East India Company's directors in a letter that they would use the vast
amount of capital that was at their disposal to buy land without using it for any other purpose
such as: generating means of employment.

The Miserable Condition of the Rural Economy

The zamindars left the village and settled in the town after being persuaded by the
zamindari rights and income, handing over responsibility to the naib gomastas. As a result, rural
life became somewhat stagnant and the economic situation of the village continued to
deteriorate.

Destruction of industry and commerce

There was a chance to generate income with no effort by investing money in land. In an effort
to invest money in land and increase wealth and status, industry and commerce were abandoned.
Many members of lower castes and commoners who acquired substantial wealth through
business dealings with the company purchased zamindari and developed an obsession with the
aristocratic status. As a result, there was no chance for the growth of indigenous industries and
capital.

Social Rebellion

It was unimaginable how the zamindars oppressed the peasants. This caused widespread
unhappiness in the social sphere. Many peasant uprisings got underway. All of this came to a
horrible conclusion.

Stagnation in Revenue
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After the passage of this law, land values continued to rise, but government revenue remained
flat. On agricultural land, zamindars raised cash crops for economic development. Therefore,
Bengal's agriculture increased but did not improve. As a result, the British government was
denied the advantages of higher revenue.

References
https://en.wikipedia.org/

https://en.banglapedia.org/

https://byjus.com/