Permanent Settlement facts for kids

The Permanent Settlement, also known as the Permanent Settlement of Bengal, was an important agreement made in 1793. It was signed between the East India Company and the landlords of Bengal. This agreement aimed to set the amount of money (revenue) that would be collected from land. It had a huge impact on farming methods and how much food was grown across the British Empire. It also changed the political situation in the Indian countryside.

Charles, Earl Cornwallis, who led the Company administration, was in charge when this agreement was made. The Permanent Settlement was part of a bigger set of rules called the Cornwallis Code. This code divided the East India Company's workers into three groups: those who collected money, those who handled legal matters, and those who dealt with trade. The money from land was collected by zamindars. These were native Indian people who were treated like landowners. This system helped create a group of Indian landowners who supported the British.

The Permanent Settlement was first started in Bengal and Bihar. Later, it spread to Varanasi and the southern part of Madras. Eventually, this system was used across northern India. These rules stayed in place until 1833. Other ways of collecting land revenue in India were the Ryotwari System and the Mahalwari System.

Many people believe the Permanent Settlement had problems, even though it aimed to increase tax money and encourage investment in land. For example, fixing the tax rate meant the Company's income from taxes actually went down over time. This happened because expenses increased, but the tax income stayed the same. Also, the lives of farmers in Bengal became very difficult. Landlords, who could lose their land if they didn't collect enough tax, forced farmers to grow cash crops like cotton and indigo instead of food. This led to frequent famines.

Why Was the Permanent Settlement Created?

Before the Permanent Settlement, zamindars in Bengal, Bihar, and Odisha were officials who collected taxes for the Mughal emperor. The diwan, a Mughal official, watched over the zamindars. This made sure they were fair in collecting taxes.

Early British Tax Problems

After the Battle of Buxar in 1764, the East India Company gained control of Bengal's tax collection. However, the Company did not have enough trained people who knew local customs. This meant that landholders were not properly supervised. Taxes were collected without caring about future income or the well-being of the local people.

After a terrible event called the Great Bengal famine of 1770, Company officials realized they needed to better manage tax collection. Warren Hastings, who was the governor-general, tried a system where land was inspected every five years. He also used temporary tax collectors. The Company did not want to take direct control of villages. They also did not want to upset powerful local leaders.

Seeking a Better Tax System

The Company's early system had a big problem: it didn't give tax collectors a reason to be fair. Many temporary tax collectors would take as much money as they could before the next inspection. The British Parliament noticed these problems. In 1784, British Prime Minister William Pitt the Younger told the Calcutta government to change the system right away. In 1786, Charles Cornwallis was sent to India to fix the Company's practices.

In 1786, the East India Company leaders first suggested a permanent tax system for Bengal. This was a change from their old policy of trying to increase taxes on zamindars. Between 1786 and 1790, Governor-General Lord Cornwallis and Sir John Shore debated whether to make the settlement permanent. Shore thought that the local zamindars would not believe the settlement was truly permanent.

Goals of the New System

The main goal of the Permanent Settlement was to solve problems with farming and low food production. British officials believed that investing in agriculture would increase trade and government income. To make sure taxes were fixed forever and property rights were secure, the 'Permanent Settlement' was adopted.

The British thought that if tax demands were set permanently, there would be a steady flow of tax money. They also believed that landowners would invest in their land. This was because they could keep any extra money they made beyond the fixed tax. Officials hoped this would create a class of rich landowners. These landowners would invest their money to grow more food. This new group would also be loyal to the British, who were still establishing their power in India.

After much discussion, the Permanent Settlement was made with the existing Rajas and Taluqdars of Bengal. They were now called Zamindars. They had to pay a fixed amount of tax forever. So, zamindars were not truly landowners but rather agents who collected taxes for the government. Cornwallis believed they would accept this and start improving their land. In 1790, a ten-year settlement was given to the zamindars, which became permanent in 1793.

Changes for Zamindars

The Permanent Settlement Act of 1793 took away the zamindars' right to have their own armed forces. They remained only as tax collectors. Their power was greatly reduced because they were no longer allowed to hold their own courts. All legal matters came under the supervision of a collector appointed by the Company. British officials thought that investing in the land would make the economy better.

The system eventually failed because it was hard to manage. It also did not consider the changing nature of farming in Bengal. The Company did not fully understand the local society. In 1819, Governor-General Francis Rawdon-Hastings noted that the settlement had caused "grievous oppression" for most lower-class people. However, in 1829, Lord Bentinck observed that the plan did succeed in one way: it created many rich landowners who supported the British. These landowners had great control over the common people.

How the Permanent Settlement Worked

The British understood that giving landlords a reason to improve their land was key. So, the landlords were guaranteed that they could keep their land. This meant that the former landholders and tax collectors were given actual ownership rights to the land they managed. Small farmers were no longer allowed to sell their land. However, their new landlords could not take their land away from them either.

Encouraging Land Improvements

The goal was to encourage zamindars to improve the land. This included things like building drainage systems, irrigation, roads, and bridges. Such improvements were often missing in Bengal. With a fixed land tax, zamindars could safely invest in increasing their income. They would not fear that the Company would tax away their extra earnings. Cornwallis clearly stated that when the government's tax demand was fixed, landowners had a chance to increase their profits by improving their land. The British hoped for "improving landlords," like those in their own country.

The Company also hoped to guarantee its own income. They often faced problems with zamindars who did not pay their taxes. This made it hard for the Company to plan its spending accurately.

Unexpected Outcomes

The immediate result of the Permanent Settlement was very sudden and surprising. By making sure zamindars' lands were owned forever and had a fixed tax, these lands became very valuable. However, the government's tax demand was very strict. The British East India Company's collectors did not allow for droughts, floods, or other natural disasters. The tax demand was even higher than in England at the time. Because of this, many zamindars quickly fell behind on their payments.

The Company's rule was to auction off any zamindari lands if taxes were not paid. This created a market for land that did not exist before. Many of the new buyers of this land were Indian officials who worked for the East India Company. These officials were in a perfect position to buy lands they knew were undervalued and would be profitable. Their jobs also gave them the money needed to buy land. They could even use the system to bring specific lands they wanted up for sale.

Historians like Bernard S. Cohn have said that the Permanent Settlement led to land being treated like a product to be bought and sold. This changed the social class of the rulers. Instead of old families and local chiefs, the new ruling class included civil servants and their families, as well as merchants and bankers. These new landlords had a different way of thinking. Often, they lived far away from their lands and managed them through others. They did not feel a strong connection to their land.

Long-Term Effects of the Settlement

The Company hoped that the Zamindar class would not only collect taxes but also help with the political side of their rule. They wanted zamindars to protect local customs and rural life from the Company's own greedy representatives. However, this worked both ways. Zamindars became a group that naturally resisted change. When British policy changed in the mid-19th century to one of reform, the zamindars strongly opposed it.

The Permanent Settlement had a rule that the government's share of the rent was fixed at 89%, and the zamindar kept 11%. The government's demand could not be increased. However, payment had to be made by a certain date, before sunset. This is why it was also known as the 'Sunset Law'. If payment was not made, the land was sold to the highest bidder.

While the worst problems of unfair tax collection were stopped by the Settlement, how the land was used was not part of the agreement. Company officials and Indian landlords often forced their tenants to grow cash crops like indigo and cotton. They did this instead of growing food crops like rice and wheat. This was a major cause of many terrible famines in the nineteenth century.

Once the main ideas of the Permanent Settlement were copied across India, and even in other parts of the British Empire like Kenya, the political structure changed forever. The landlord class gained much more power than they had under the Mughals. The Mughals had watched over them with trained officials who could limit their power. The power of the landlord class over small farmers was not reduced in India until the first efforts towards land reform in the 1950s. These reforms are still not complete everywhere except West Bengal.

In Pakistan, where land reform was never fully carried out, elections in rural areas still tend to be controlled by a few powerful families. This shows how much influence zamindar families still have. After Pakistan separated from India and they began fighting over Kashmir, the government's main goal was to collect money to fund the military. This changed the relationship between elected and non-elected parts of the government.