WHY WAS THE PERMANENT SETTLEMENT INTRODUCED, WHY DID IT FAIL TO PRODUCE CAPITALISM IN AGRICULTURE?

Agriculture has been the mainstay of the Indian economy for many centuries. Naturally therefore kings and rulers have drawn a large part of their taxes from agriculture, therefore as soon as the British got political rights in India; especially consolidated after the grant of diwani for Bengal Bihar and Orissa in 1765 the major concern for the English east India Companys administration in India was to collect as much revenue as possible. Several land revenue experiments were introduced in haste to maximize the land revenue collection and here they did not want to take chances. So, although native officials were given in charge of revenue collection, European officers of the company were in charge of collection as supervisory authority. However their corruption as well as lack of understanding of local conditions led to complete disorganization of the agrarian economy and the society in the diwani provinces within a few years. The devastating famine of 1769-70, in which one third of the Bengal population was wiped off, was only one of the indication of the prevailing chaos. Warren Hastings, the newly appointed governor of Bengal to get rid of the Indians altogether from the administration of revenue and make the British the sole controller of the revenue resources introduced a new system, known as the farming system in 1772. European district collectors were in charge of revenue collection, while the revenue collecting right was to be farmed out to the highest bidder, about the periodicity of the settlement a number of arrangements were made but the farming system failed to improve the situation because the farmers tried to extract as much revenue as possible without any concern for the production process. The burden of revenue demand on the peasants increased as a result and often it was so onerous that it could not be collected at all. The net outcome of this whole period of rash experimentation was the ruination of agriculture and the population, therefore in 1784, Lord Cornwallis was sent to India to streamline the revenue administration. Cornwallis realized that the existing system was impoverishing the country, had ruined agriculture immensely and had not produced the surplus the company was hoping for, and as a result the company trade also suffered and it was argued that to improve the situation the revenue should be fixed permanently. Indeed it was, since 1770 even before Cornwallis had arrived a number of company officials and European observers like Alexander Dow, Henry Patullo, and Philip Francis etc. were advocating for the land tax being permanently fixed. All these thinkers shared a common faith in the physiocratic school of thinking that assigned primacy to agriculture in a countrys economy. These ideas went into the making of the permanent settlement of 1793. Historians like Ranajit Guha and Eric Stokes point to the innovative character of the settlement. Guha is of the view that a maze of intellectual influences shaped this system these influences were mercantilist, physiocratic and free trade ideals, inspired from the French physiocratic notions to create landed estates and land markets. Eric stokes is of the view that the Whig notion of recognition to private property as the basic principle of government and giving legal status to private property.

The idea behind assessment forever was that it would reduce the scope for corruption; the landlords would invest in improving the land, because now that the state demand was fixed the whole benefit from increased production and enhanced income would accrue to them. The company would get its taxes regularly and could enhance its income by taxing trade and commerce. However now the company faced the problem of whom to collect the revenue from , prior to this the nawabs used to collect the revenue from the zamindars , some of them were big landlords who controlled large areas and maintained their own armed retainers , while others were smaller zamindars who paid revenue directly through the state or through these big landlords , therefore the zamindars became the local level officials for revenue collection , as well as the owners of the estates of which they previously held only revenue collecting rights only as the company officials had clearly misunderstood the former revenue collection apparatus. Cornwallis being from a class of landed aristocracy , naturally preferred zamindars as he sought to create a class of improving landlords who now would invest in the betterment of their land, over which now they had clear ownership rights. There were other practical reasons too. For instance it was easier to collect land revenue from a small group of intermediaries rather than large number of peasants, which would ensure the loyalty of a powerful class of the local population. So the permanent settlement of 1793 was made with zamindars. The zamindar had to pay a tax fixed upon their estate. If he did so, then he was the owner of his estate, he could sell, mortgage or transfer it, land could also be inherited by his heirs. But the failure to pay the revenue would lead to confiscation of his property by the government and eventually auction. This was so- called creation of private property in land, the magic of private property in land, it was widely hoped, would bring in the desired improvement in agriculture. The permanent settlement vested the land ownership right in the zamindars, who had previously held only revenue collecting rights over land; however those who lost out in this settlement were the peasants who were left at the mercy of the zamindars. Their customary occupancy right was ignored and that they were reduced to the status of tenants. The provision of the patta or written agreement between the peasant and the zamindar providing a record of the amount of rent to be paid was rarely followed by the zamindars. Nor was it liked by the peasants who always feared to lose in any formal agreement of rights and obligations The burden of high revenue assessment was thus shifted to the peasants, who were called upon to pay illegal cesses. The tenant regulations of 1799 and 1812 gave the zamindars the right to seize the property of the tenants in case of non- payment of rent without any permission of a court of law. Therefore as a cumulative effect of this support to the coercive power of the zamindars, the condition of the actual cultivators declined under the permanent settlement. Although the settlement was pro- zamindar, but they too faced difficulties. As Daniel Thorner has argued, creation of private property in land was a misnomer, as the absolute ownership was

retained by the imperial authority. The sun-set law which was incumbent upon the zamindars made them subservient to the British authority, according which the zamindars were supposed to pay the fixed amount on a particular day by sunset of a particular day failing which their lands had to be confiscated and auctioned off, however the real crisis in the system emerged due to the fictitious land sales that were happening during these auctions and the zamindaris were being parceled out among the old zamindars through their own amalas (zamindari officials). And these led to subinfeudatory tenures. Although the company in 1885 and 1859 passed some tenancy legislations in order to regulate the zamindars and their power and recognize the rights of the peasants but these new legal reforms could not provide any relief to poor cultivators. therefore the complete failure of this whole settlement crashed all hopes for the company state who had high expectations of revenue collection and its hopes to develop the trade and commerce which it could subsequently tax also couldnt develop sufficiently , although agriculture had commercialized in certain areas which saw production of indigo and cotton and did not extend to other crops. Historians like Rajat and Ratnalekha Ray argue that the introduction of permanent settlement in northern and eastern areas led to the emergence of jotedars , who were a powerful group of intermediaries who enjoyed actual landholding rights and the zamindars only enjoyed revenue collecting rights and the jotedars were the class who actually controlled policies regarding the land . However historians like Sugata Bose do not agree with this , and state that the jotedars were only confined to northern Bengal and in the in the rest of the regions existed a different systems which was peasant landholding- demesne labour in the west and small peasant holding in the east. He further argues that the position of the zamindars was strong in both these regions and continued unchallenged up till the 1930s. His views are also supported by Akinobu Kawai and Partha Chatterjee. Rajat Ray reiterates his point with some modification stating that the zamindars did retain some of their influences and authority up till the 1930s in rural Bengal but along with them also existed a section of substantial peasantry who had considerable power, whom he calls the jotedars. Nariaki Nakazato argues that the existence of powerful jotedar- haoldar class cannot be denied but this did not mean the end of zamindars as the interests of both the classes were complementary and not antagonistic. Chitta Panda is also of the view on the basis of his study of Midanapur district that there was an unqualified decline of the zamindars , who lost out to a class of peasants who dominated land market, rural credit and trade networks. Therefore as Peter Robb has clearly pointed out that the permanent settlement of 1793 was a simplistic model, based on the quasi-federal approach of the weak state, and depended on the institutions that were of the past i.e. inherited, it was fearful of the competence and probity of its own direct employees. This clearly indicate the nature and characteristics of the settlement which was a complete failure ultimately , it could therefore not induce any kind of improvement in agriculture neither could advance agricultural production because of its narrow aims were

maximization of revenue collection, which ultimately led to no incentive for the producer to improve his holding , further the policies followed by the British were narrowly designed and were at times harsh and erratic which further alienated both the peasantry as well as the intermediaries from the state imposed system which led to rapid subinfeudation, fictitious sales and nonpayment of revenue. The need to reformulate revenue settlements which led to emergence of ryotwari and the mahalwari system subsequently was in itself a clear indication of the decadence the permanent settlement.

BIBLIOGRAPHY AGRARIAN BENGAL- SUGATO BOSE THE ECONOMY OF INDIA B.R.TOMLINSON AGRICULTURAL PRODUCTIVITY IN INDIA- B.B. CHAUDHARI PLASSEY TO PARTITION SEKHAR BANDYOPADHYAY CLASS NOTES

SUBMITTED BY: TERESA IIIrd history(hons.)