Permanent Settlement of Bengal 1793: Ruin of Old Zamindars and the New Landlordism

Why the Company Introduced the Permanent Settlement

Diwani of 1765 and the Company's Revenue Problem

In 1765 the English East India Company acquired the Diwani of Bengal, the right to collect revenue in Bengal, Bihar and Orissa on behalf of the Mughal emperor. The Treaty of Allahabad, signed in August 1765 with Emperor Shah Alam II, gave the Company this right, in return for an annual tribute of twenty-six lakh rupees to the emperor.

Before 1765 the zamindars of Bengal were formally functionaries who collected revenue for the Mughal emperor, and the emperor's diwan supervised them so that they were neither lax nor too harsh. In practice many were local lords, and some were independent princes; a zamindar's holding was typically hereditary and came with the right to collect taxes. A Mughal jagirdar was different: He held an assignment of land revenue that paid his salary, while administration and military authority over the area went to a separate Mughal appointee.

After 1765 the Company found itself short of trained administrators who knew local custom and law. Landholders were therefore left unsupervised or reported to corrupt officials, and revenue was extracted with no regard for future income or local welfare. By the 1770s the rural economy of Bengal was in crisis, with recurrent famines and falling agricultural output.

The great famine of 1769‑70 made the crisis visible. Contemporary Company estimates put the deaths at between seven and ten million, roughly a quarter to a third of the presidency's population, although later scholars think these figures were inflated and have proposed a much lower toll. Whatever the exact toll, the famine taught Company officials in Calcutta how important it was to oversee the people who collected revenue.

Warren Hastings and the Failed Experiments

In 1772 Warren Hastings had the Company take over revenue collection directly in the Bengal Presidency, set up a Board of Revenue with offices in Calcutta and Patna, and moved the Mughal revenue records from Murshidabad to Calcutta. A Committee of Circuit then toured the districts to make a five-year settlement, which consisted of five-yearly inspections and temporary tax farming.

The system failed because it ignored incentives. Tax farmers held the right to collect only for a short period, so many of them absconded with as much revenue as they could between inspections. The Company also did not wish to take direct control of village administration, partly because it did not want to upset those who had traditionally held power in rural Bengal.

The British Parliament took note of these results. In 1784 Prime Minister William Pitt the Younger directed the Calcutta administration to change the system at once, and in 1786 Lord Cornwallis was sent to India to reform the Company's practices.

From Decennial Settlement to Permanent Settlement

In 1786 the Court of Directors first proposed a permanent settlement for Bengal. Between 1786 and 1790 Cornwallis and Sir John Shore, who later became Governor-General, argued over whether to settle permanently with the zamindars. Shore feared that the zamindars would not trust a "permanent" settlement and would need time to believe it was genuine. In 1790 the Court of Directors ordered a ten-year, or decennial, settlement with the zamindars, and in 1793 it was made permanent.

Officials hoped for three results:

• Regular revenue: If the state's demand was fixed for ever, the Company could look forward to a steady flow of income and an end to defaulting collectors.
• Investment in land: A zamindar who knew that the state would not raise its claim could keep the profit from improvements such as drainage, irrigation, roads and bridges. Cornwallis argued that once the government's demand was fixed, the landholder could increase his profits by improving his lands.
• A loyal landed class: The officials expected a class of yeomen farmers and rich landowners who would have the capital and enterprise to improve agriculture and who, nurtured by the British, would be loyal to the Company.

The difficulty lay in finding people who would both improve agriculture and contract to pay a fixed revenue for ever. After a long debate among Company officials, the settlement was made with the existing rajas and taluqdars of Bengal, who were now classified as zamindars.

Permanent Settlement of 1793: Provisions and Coverage

Regulation I of 1793 and the Cornwallis Code

Cornwallis issued the Permanent Settlement through Bengal Regulation I of 1793, dated 22 March 1793. It formed one part of the Cornwallis Code, a body of 1793 legislation that also reorganised policing, justice and the Company's service. Under the Code the Company's personnel were divided into revenue, judicial and commercial branches. Private trade was forbidden to the first two branches, and they were paid on a new and generous scale instead.

The Code also separated revenue administration from civil jurisdiction. The Collector of the district became a revenue officer, and the judiciary was reorganised with district judges. The higher ranks of the services were reserved for Britons, which kept Indians out of any responsible share in administration.

Main Features and Regions Covered

• Fixed demand: The total revenue demanded from each zamindari was fixed in perpetuity and could not be raised later, even when prices and cultivation grew.
• Ten-elevenths to the state: The zamindar paid the Company about ten-elevenths of the rental he collected and kept about one-eleventh.
• Estate as the unit: A zamindar often had several villages under him, sometimes as many as 400. In the Company's calculations the villages within one zamindari formed one revenue estate, for which a single total demand was fixed.
• Property right: The former landholders and revenue intermediaries were granted proprietary rights, in effect ownership, over their estates. This security of tenure was the incentive meant to make them invest.
• Payment by sunset: The revenue did not change with the harvest and had to be paid punctually. If it did not arrive by sunset of the specified date, the zamindari was liable to be auctioned, which is why the rule is called the Sunset Law.
• Pattas for cultivators: Zamindars were required to issue pattas, or deeds of contract, to the cultivators, but no official check was placed upon them and many never issued them.

The zamindar's position therefore had two sides. By the Company's definition he was a revenue collector of the state, not a landowner in the village, yet his proprietary right made him a landlord.

The Permanent Settlement was introduced first in Bengal, Bihar and Orissa, and later extended to Banaras (Varanasi) and the northern districts of Madras. In the Burdwan (Bardhaman) region the settlement also redrew the administrative map: The old chaklas, the Mughal revenue divisions, were reduced in size to make them more manageable, and districts were created. In all, the zamindari or Permanent Settlement areas covered about 19 per cent of British India, against about 51 per cent for the Ryotwari system and about 30 per cent for the Mahalwari system.

Ruin of the Old Zamindars

Why Zamindars Failed to Pay the Revenue

The Company hoped that a fixed demand would give zamindars a sense of security. Instead, in the early decades after 1793, they regularly failed to pay and unpaid balances accumulated. Four reasons explain the failure.

• High initial demand: The Company expected that, once the demand was fixed for all time, it could never claim a share of increased income from land when prices rose and cultivation expanded. To make up for this anticipated loss, it pegged the revenue high, arguing that the burden would decline as production grew and prices rose.
• Depressed prices: The high demand was imposed in the 1790s, when prices of produce were low, so ryots found it hard to pay their dues to the zamindar. If the zamindar could not collect rent, he could not pay the Company.
• A fixed date as well as a fixed sum: A bad harvest did not reduce the demand, and a late payment meant auction under the Sunset Law.
• Limited powers: The settlement at first restricted the zamindar's power to collect rent from the ryot and to manage his zamindari.

Loss of Troops, Courts and Police

The Company recognised the zamindars as important but wanted to control them, subdue their authority and restrict their autonomy. Their troops were disbanded, the customs duties they had levied were abolished, and their cutcheries, or courts, were brought under the supervision of a Collector appointed by the Company. They lost the power to organise local justice and the local police.

Over time the collectorate became an alternative centre of authority and severely restricted what the zamindar could do. In one case, when a raja failed to pay the revenue, a Company official was sent to his zamindari with instructions to take charge of the district and to destroy the influence and authority of the raja and his officers.

Rent collection was also a constant problem. Bad harvests and low prices sometimes made payment difficult for ryots, and at other times they delayed deliberately. Rich ryots and village headmen, the jotedars and mandals, were glad to see the zamindar in trouble, so he could not easily assert his power over them. A zamindar could prosecute defaulters, but the judicial process was long. In Burdwan alone there were over 30,000 pending suits for arrears of rent in 1798.

Sunset Law and the Auction of Zamindari Estates

The combination of a high fixed demand, low prices and the Sunset Law meant that estate after estate came up for sale. Over 75 per cent of the zamindaris changed hands after the Permanent Settlement, and by 1815 half the total land in Bengal had passed into new hands. The Fifth Report of 1813 records the scale of the auctions: In the Bengal year 1203, corresponding to 1796‑97, land carrying an assessment of sicca rupees 28,70,061 was advertised for sale, and land with an assessment of sicca rupees 14,18,756 was actually sold.

The Fifth Report also names some of the oldest families of the country among the defaulters, such as the rajas of Nuddea, Rajeshaye and Bishenpore (Bishnupur), whose estates were broken up year after year, threatening them with poverty and ruin.

Bishnupur, in present-day Bankura district, shows how far such a fall could go. Its rajas had ruled the area for around a millennium, but as the Burdwan Raj grew in power the Bishnupur family fell into decay, and by the late nineteenth century its house was an impoverished zamindari. Ruined palaces such as the Andul Raj Palace, where Satyajit Ray filmed Jalsaghar, his film on the decline of the zamindari way of life, mark the end of that era.

The auctions also changed the economy. By the Company's policy of auctioning any zamindari land in arrears, a market for land was created that had not existed before. Many of the new buyers were Indian officials of the Company's government, who knew which lands were under-assessed and therefore profitable.

Burdwan Auction of 1797 and Benami Purchases

The Burdwan Raj was one of the greatest zamindari houses of Bengal. In 1689 Raja Krishnaram Roy obtained a farman, or royal decree, from Aurangzeb that made him the zamindar of Burdwan, and from then on the family's history was bound up with that of the district.

In 1797 a number of mahals, or estates, held by the Raja of Burdwan were auctioned in a big public event, because the raja had accumulated huge arrears. The Collector found that many of the purchasers were servants and agents of the raja who had bought the land on his behalf, and over 95 per cent of the sale was fictitious. The raja's estates had been publicly sold, but he stayed in control of his zamindari.

The method was a series of manoeuvres:

1. The raja first transferred part of his zamindari to his mother, because the Company had decreed that the property of women would not be taken over.
2. His agents then deliberately withheld the Company's revenue and let unpaid balances build up.
3. When part of the estate was auctioned, the raja's men bought it, outbidding other buyers.
4. They then refused to pay the purchase money, so the estate had to be resold, and the process was repeated.
5. At last, exhausted bidders and a weary state let the estate be sold at a low price back to the zamindar. He never paid the full revenue demand, and the Company rarely recovered the unpaid balances.

The trick was repeated on a grand scale through benami deals. A benami transaction is one made in the name of a fictitious or relatively insignificant person, while the real beneficiary remains unnamed. Between 1793 and 1801 four big zamindaris of Bengal, including Burdwan, made benami purchases that together came to as much as 30 lakh rupees, and over 15 per cent of all auction sales were fictitious.

Other methods also helped zamindars to resist displacement. When outsiders bought an estate they could not always take possession, because agents were sometimes attacked by the former zamindar's lathyals, or strongmen. Ryots often resisted the entry of outsiders too, since they felt bound to their own zamindar by loyalty and saw themselves as his proja, or subjects.

The Fifth Report of 1813: Evidence and Its Limits

Most of what is known about these changes comes from the Fifth Report, submitted to the British Parliament in 1813. It ran to 1,002 pages, of which over 800 were appendices reproducing petitions of zamindars and ryots, reports of collectors, statistical tables on revenue returns and notes on the revenue and judicial administration of Bengal and Madras. It was produced by a Select Committee, at a time when the Company's monopoly was under attack in Britain and its misrule was widely debated.

The report has to be read with care. Recent research, based on the archives of Bengal zamindars and local district records, shows that it exaggerated the collapse of traditional zamindari power and overestimated the scale on which zamindars lost their land, since the writers were intent on criticising the Company's maladministration. Even when estates were auctioned, zamindars were often not displaced.

By the beginning of the nineteenth century the depression in prices was over. Those who had survived the troubles of the 1790s consolidated their power, and the rules of revenue payment were made somewhat flexible. The power of the zamindar over the villages therefore grew stronger. It was only during the Great Depression of the 1930s that zamindars finally collapsed, and the jotedars consolidated their power in the countryside.

Jotedars, New Landlords and Absentee Landlordism

Jotedars: Rich Peasants Who Challenged the Zamindars

While many zamindars were in crisis at the end of the eighteenth century, a group of rich peasants known as jotedars were consolidating their position in the villages. Francis Buchanan's survey of the Dinajpur district of North Bengal gives a vivid description of them. By the early nineteenth century they had acquired vast areas of land, sometimes as much as several thousand acres, and they controlled local trade as well as moneylending, exercising immense power over the poorer cultivators.

• Sharecropping: A large part of jotedar land was cultivated by sharecroppers, called adhiyars or bargadars, who brought their own ploughs, laboured in the field and handed over half the produce after the harvest.
• Village presence: Unlike zamindars, who often lived in towns, jotedars lived in the villages and directly controlled a large section of the poor villagers. Within the village their power was more effective than that of the zamindars.
• Resistance: They resisted efforts of the zamindars to increase the jama, or assessed rent, of the village, stopped zamindari officials from doing their duties, mobilised the ryots who depended on them and deliberately delayed payment of revenue to the zamindar.
• Buyers at auctions: When zamindari estates were auctioned for failure to pay, jotedars were often among the purchasers.
• Other names: In some places they were called haoladars, elsewhere gantidars or mandals. They were most powerful in North Bengal.

Their rise weakened zamindari authority. Many jotedars later claimed the legal status of ryot so that they could benefit from the Bengal Tenancy Act of 1885, and they long controlled village land and trade.

New Landlords, Subinfeudation and Absentee Landlordism

The auctions replaced old families with a new kind of landlord. One well-known reading is that the Permanent Settlement commercialised land in Bengal and changed the social background of the landed class from lineages and local chiefs to civil servants, merchants and bankers. The new landlords were different in outlook; many lived away from their estates and had little attachment to the land.

Absentee landlordism means ownership by landlords who do not live on their land, leave its management to agents and claim only the rent. Such landlords played no part in the agricultural economy, and they often lived in towns and cities rather than in the village.

The new zamindars, with increased powers but few avenues for fresh investment, turned to land-grabbing and subinfeudation, the creation of layers of sub-holders between the landlord and the cultivator. The increase in the number of intermediaries to be paid gave rise to absentee landlordism and increased the burden on the peasant. Because demand for land was high, its price went up, and so did the liabilities of the peasant. With no traditional or kindly ties with the tenants, the zamindar had little reason to invest in the improvement of agriculture.

Officials understood the political gain. In 1829 Lord Bentinck noted that the settlement had created a large body of rich landed proprietors with a deep interest in the continuance of British rule. Ten years earlier, in 1819, the Governor-General Francis Rawdon-Hastings had observed that the settlement had subjected almost all the lower classes of these provinces to grievous oppression.

Effects of the Permanent Settlement

Effects on the Ryots and on Agriculture

For the cultivator the system was harsh. Transferability of land, a feature of the new settlement, created great insecurity for tenants who lost their traditional rights in land. The zamindars resorted to summary evictions and demanded illegal dues and begar, or unpaid labour, to raise their share of the produce. The overburdened peasants went to moneylenders to pay their dues to the zamindars, and the moneylender, often also the village grain merchant, forced the farmer to sell produce at low prices to clear his debt.

Agriculture did not improve as the Company had hoped. The expected investment in drainage, irrigation and roads did not materialise. Since the zamindars could not undertake costly improvements, they soon became rentiers who lived off the rent from their tenant farmers. Landlords who risked losing their estates if the revenue failed pressed cultivators to grow cash crops such as cotton, indigo and jute. Famines, too, became a regular occurrence under the system.

Effects on the Company and the Colonial State

The Company gained a regular revenue and a landed class with a stake in British rule. Lord Bentinck said as much in 1829. The cost showed up later. Because revenue was fixed while expenses increased, the Company's income from taxation actually decreased in the long term, and when prices rose and cultivation spread, the extra income went to the zamindars and not to the state. The interests of the new zamindars lay in the continuation of British rule and in opposing the national movement.

Zamindars also became a conservative interest group. When British policy in the mid-nineteenth century turned towards reform and intervention in custom, they were vocal in their opposition.

Permanent Settlement, Ryotwari and Mahalwari Compared

Three Land Revenue Systems Compared

The British used three main systems of land revenue. Officials who knew Ricardo's ideas about rent came to believe that Bengal showed what went wrong when landlords were not taxed on their surplus: The zamindars seemed to have turned into rentiers who lived on rental incomes. A different system, they felt, was needed.

Begun in Madras, the Ryotwari system was extended to the Bombay Deccan in the 1820s. Unlike the Bengal system, the revenue was settled directly with the ryot. The average income from different types of soil was estimated, the revenue-paying capacity of the ryot was assessed, and a proportion was fixed as the state's share. The lands were resurveyed every 30 years and the revenue rates were increased, so the revenue demand was not permanent.

The ryot held his land on a patta, or lease, from the government and was virtually a proprietor: He could give up land at any time but could not be ejected so long as he paid his dues. Annual settlements decided how much of the assessment he would pay that year, and a fresh patta was issued only when his holding changed.

Under the Mahalwari system, landlords or lambardars represented villages or groups of villages, and the village communities were jointly responsible for payment. Revenue was determined on the basis of the produce of the mahal. The 1833 scheme under Bentinck fixed the state demand at 66 per cent of the rental value, for a settlement of 30 years.

The peasant was the ultimate sufferer under the triple burden of the government, the zamindar and the moneylender, and this was as true in zamindari areas as in Ryotwari and Mahalwari areas.

Tenancy Reform and the Abolition of Zamindari

Bengal Tenancy Act of 1885 and the Floud Commission

Tenancy reform came late. The government promised legislation to protect tenants from the worst aspects of zamindari oppression, and in 1885 the Bengal Tenancy Act was passed. It was meant to give tenants protection from arbitrary eviction and to address tenancy abuses under the Permanent Settlement, and many peasants used it to acquire occupancy rights and resist enhanced rents.

In 1938 a commission under Francis Floud, which included Uday Chand Mahtab of Burdwan, was asked to suggest changes in the Permanent Settlement of 1793. It recommended replacing the zamindari system by a Ryotwari system, in which ownership of land would vest in the ryot and the land revenue payable by him could be revised.

Abolition of Zamindari After Independence

At independence the land tenure system was characterised by intermediaries, variously called zamindars, jagirdars and so on, who merely collected rent from the actual tillers of the soil without contributing to improvements on the farm. Low productivity in agriculture forced India to import food. Just a year after independence, steps were taken to abolish intermediaries and to make the tillers the owners of land. The idea was that ownership would give incentives to the tillers to invest in improvements, as long as enough capital was made available to them.

Court challenges delayed the work. Zamindars went to court against the new abolition laws, and the Patna High Court struck down the Bihar Land Reforms Act, 1950, although a similar Madhya Pradesh law was upheld. The First Amendment of 1951 answered the problem. It introduced Article 31A to uphold agrarian reform measures that had been held up in litigation, and Article 31B and the Ninth Schedule, with retrospective effect, to validate 13 enactments relating to zamindari abolition. Article 31A still protects any law providing for the acquisition by the State of any estate or of any rights therein from being declared void for conflict with Article 14 or Article 19.

The abolition of intermediaries meant that some 200 lakh tenants came into direct contact with the government and were freed from exploitation by the zamindars. Ownership gave them the incentive to increase output, and this contributed to growth in agriculture.

Land Reforms: Gaps and Success Stories

The goal of equity was not fully served by abolition of intermediaries. In some areas the former zamindars continued to own large areas by exploiting loopholes in the legislation. There were cases where tenants were evicted and the landowners claimed to be self-cultivators, the actual tillers, to claim ownership. Even when tillers got ownership, the poorest agricultural labourers, such as sharecroppers and landless labourers, did not benefit.

Land ceiling laws also faced hurdles. Big landlords challenged the legislation in the courts and used the delay to register their lands in the names of close relatives. Land reforms were successful in Kerala and West Bengal because these states had governments committed to the policy of land to the tiller, while other states lacked the same commitment and wide inequality in landholding continues.

• Kerala: The Kerala Land Reforms Act of 1963 and its 1969 amendment ended the janmi-kudiyan landlord-tenant system, transferred ownership to cultivating tenants and gave hutment dwellers ownership of their homesteads.
• West Bengal: Operation Barga, begun after 1977, recorded the names of sharecroppers (bargadars) to give them legal protection against eviction by landlords and their due share of the produce. The earlier law had been defeated in practice because landlords used the personal cultivation clause to evict tenants and few tenants registered.

Ownership incentives, security of tenure for tenants and political commitment together explain why land reforms improved productivity and the condition of small farmers in some parts of the country but not in others.

Sources

• NCERT: Themes in Indian History Part III (Class XII), Colonialism and the Countryside
• NCERT: Themes in Indian History Part II (Class XII), Peasants, Zamindars and the State
• NCERT: Indian Economic Development (Class XI), Indian Economy 1950‑1990
• NCERT: Indian Constitution at Work (Class XI), Rights
• NCERT: Indian Society (Class XII), Social Institutions
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• Wikipedia: First Amendment of the Constitution of India
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