The Permanent Settlement

The Permanent Settlement was a land revenue policy introduced by the English
East India Company in 1793 in the engal Presidency! It has been regarded as a
turning point in Indian economic and social history!
The English East India Company ac"uired the diwani o# engal$ ihar and %rissa
in 17&'! The ma(or concern o# the East India Company)s administration in India$
since the grant o# diwani$ was to collect as much revenue as possible! *griculture
was the main basis o# economy and the main source o# income$ hence
ma+imi,ation o# land revenue was pursued with great determination! Several
land revenue e+periments were introduced in haste to ma+imi,e e+traction! The
corruption as well as lac- o# understanding o# the local situation led to complete
disorgani,ation o# the agrarian economy and society in the diwani provinces
within a #ew years! This led to the Company assuming the actual responsibility #or
revenue administration in 177.!
In 177.$ /arren 0astings$ the 1overnor o# engal$ introduced a new system
-nown as the #arming system! 2nder this system$ revenue collecting right was
#armed out to the highest bidders! 0owever$ the #arming system ultimately #ailed
to improve the situation$ as the #armers tried to e+tract as much as possible
without any concern #or the production process! The burden o# revenue demand
on the peasants increased as a result and o#ten it was so onerous that it could not
be collected at all! The net outcome o# this whole process o# rash e+perimentation
was the ruination o# the agricultural population!
Eventually$ in 1734$ 5ord Cornwallis was sent to India with a speci#ic mandate to
streamline the revenue administration! Cornwallis reali,ed that the ritish
agrarian policy had impoverished the country$ ruined agriculture and did not
produce the large and regular surplus that the Company hoped #or! It was
recogni,ed that the only solution to the deteriorating condition was to #i+ the
revenue permanently!
0istorians writing in the late 19'6s and early &6s$ li-e 7ana(it 1uha and Eric
Sto-es$ have emphasi,ed the ideological roots behind the ritish land revenue
settlements! Sto-es writes that 8ritish policies moved within the orbit o# ideas
primarily determined in Europe)! The point o# emphasis in 1uha)s study$ * 7ule
o# Property #or engal$ is similar! 1uha tried to study 8the origins o# the
Permanent Settlement in that con#luence o# ideas where the two mainstreams o#
English and 9rench thought merged in the second hal# o# the eighteenth century)!
* Permanent Settlement was #irst #ormulated as a policy recommendation by
*le+ander :ow in 1776! It was the thesis o# 0enry Pattullo)s Essay published two
years later! In 177& Philip 9rancis made it the very basis o# his #amous revenue
plan! 0e was under the Physiocratic thin-ing that land is the source o# all wealth!
0e advocated #or the recognition o# the right o# the ,amindars to landed property!
0e also carried #orward the Physiocratic ideas about the duration o# the lease that
is the longer the lease the more secure the #armers #elt and this was good #or
agriculture! The idea was given legal sanction by Cornwallis in his rules #or a
decennial settlement issued in 1739;96$ which #inally led to the declaration o# the
Permanent Settlement o# 1793! :ow$ Pattullo$ 9rancis$ Cornwallis were thus its
leading champions in the 13
th
century!
It is now generally accepted that colonial policies cannot be understood merely in
terms o# the in#luences o# intellectual ideas and doctrines which developed in
Europe! The ideas$ a#ter all$ were selectively accepted$ and their meaning
(udiciously reinterpreted in accordance with colonial needs!
Studies by *siya Siddi"i$ 7avinder <umar$ 7atnale-ha 7ay have shown that
views o# historians li-e 7ana(it 1uha and Eric Sto-es have underestimated the
in#luence o# social reality within India in the shaping o# ritish policy! The
writings o# 7obert 9ry-enberg perhaps portray most emphatically this opposite
view! The relationship between state and society$ according to 9ry-enberg$ is
de#ined by the strength o# 8local in#luences) and 8traditional political processes)!
* similar emphasis on 8local in#luences) and compulsions o# the 8traditional) social
structures as a determinant o# ritish policy is to be #ound in 7atnale-ha 7ay)s
study o# the Permanent Settlement! The #ramers o# the Permanent Settlement$
writes 7ay$ 8did not set out to engineer social #orms and categories conceived
#rom abstract doctrines!) Physiocratic doctrines$ concedes 7ay$ might have
provided the #ramewor- o# the order they wanted to impose on #acts$ but 8the
#acts in all their comple+ity$ were e+plored in depth and accepted as #oundation
on which to build!) Thus$ there were distinct settlements in each district arising
#rom 8local compulsions)!
Thus there e+ists two opposing perspectives on the nature o# agrarian policies=
one views them as being derived #rom alien concepts and doctrines$ albeit with
modi#ications$ and imposed on Indian society> the other sees them as the product
o# a process o# 8adaptation) and 8accommodation) to the traditional structure o#
local society$ as put #orth by 9ry-enberg$ or as attempts to legali,e e+isting rights
and privileges$ as advocated by 7ay!
7ana(it 1uha has stated that the Permanent Settlement was a ma(or departure
#rom accepted land revenue policy in India! 2nder the settlement$ the e+isting
,amindars were declared #ull owners with absolute proprietary rights o# land$
without reali,ing that they were only ta+ collecting intermediaries during the
preceding regime! Thus$ the ,amindars were technically converted into hereditary
landlords with the right to sell$ mortgage or trans#er their land! They no more
remained agents o# the government in collecting land revenue but were now
owners o# the entire land in their ,amindari!
The assumption that the ,amindars under the Permanent Settlement were
landlords rose #rom the application o# English terms and concepts to Indian
realities #or which they were not suitable! 5and ownership in India was a comple+
phenomenon! The #ramers o# the Permanent Settlement by identi#ying the
,amindars as the nearest appro+imation to the ritish concept o# landlords #ailed
to ma-e the important distinction between the lords o# the territory ?the
,amindars@ and the lords o# the soil ?the (otedars@!
In actuality$ the ,amindars under the Permanent Settlement ac"uired titles to
revenue collection and not absolute property right! The actual rights o#
possession were not disturbed! Aor did the settlement lead to a total ruin o#
traditional ,amindars and the emergence o# a new class o# urban capitalist
landlords! The only important #eature o# change$ according to 7ay$ was the
strengthening o# a high caste 8creditor employer) class ?(otedars@ at the village
level!
The 8(otedar thesis) came under serious attac- by many historians! In a
monograph Sugata ose asserts that (otedar domination con#ined only to
northern engal! In the rest o# the region he discovered two other distinct modes
o# peasant economy$ that is the peasant landholding;demesne labour comple+ in
the west and the peasant small holding system in eastern engal! In both these
regions he #ound the power o# the ,amindars continuing unhindered till the
1936s!
5ord Cornwallis regarded the Permanent Settlement the best revitali,ation
towards agriculture and considered it to be the best security o# revenue! It was
e+pected to stimulate agriculture and bring about a con#idence in property! It was
hoped that the settlement would encourage ,amindars to invest money in
improving the land$ as with the state demand being #i+ed the whole bene#it #rom
increased production and enhanced income would accrue to them! There were
other practical reasons #avouring the introduction o# the Permanent Settlement!
It was easier to collect revenue #rom a small number o# ,amindars than #rom the
innumerable peasants$ which would re"uire a large administrative machinery!
9urther$ it would ensure the loyalty o# a power#ul class o# the local population!
Those who lost out in this settlement were the peasants$ who were le#t at the
mercy at the ,amindars! Their customary occupancy right was ignored and they
were reduced to the status o# tenants! The burden o# high revenue assessment
was shi#ted on the peasants! The provision o# patta$ or written agreement$
between the peasant and the ,amindar providing a record o# the amount o# rent
to be paid$ was rarely #ollowed by the ,amindars! Aor was it li-ed by the peasants
who always #eared to lose in any #ormal record o# rights and obligations! The
subse"uent regulations o# 1799 and 131. gave the ,amindars the right to sei,e
property o# the tenants in case o# non;payment o# rent without any legal
permission! Thus the enhancement o# the coercive power o# the ,amindars under
the Permanent Settlement resulted in a decline in the condition o# the actual
cultivators!
A!<! Sinha suggests that Cornwallis while securing the proprietary rights o# the
,amindars did not want to abridge the rights and privileges o# other classes! ut
the immediate e##ect was a curtailment o# the rights and privileges o# the ryots
and subordinate landlords!
Though the settlement was pro;,amindar$ they too #aced a number o# di##iculties!
The land revenue under the Permanent Settlement$ since it was going to be #i+ed
in perpetuity$ was #i+ed at a high level$ that is the absolute ma+imum! It was
decided that the ,amindars should pay to the government virtually
tenthBelevenths o# the rent they collected #rom the tenants and retain #or
themselves as cost o# collection only one;eleventh o# it! There was a Sunset law$
according to which the ,amindars had to pay the #i+ed amount o# revenue by a
particular date$ #ailure o# which led to the con#iscation o# their ,amindari by the
government and it was sold out in auction! %#ten they #ound it di##icult to collect
the rent as demands were too high! The result was the #re"uent sale o# ,amindari
estates! 9or instance$ between 1794 and 1367 land yielding about 41 percent o#
the revenue in engal and ihar was sold out in auction! It slowly led to the
collapse o# most o# the old ,amindari houses since many original ,amindars were
wiped o## because o# auction sales!
0owever$ 7ay argues that when the Sunset 5aw brought big ra(s under sale$ what
was sold #or the li"uidation o# their arrears was not land but a portion o# the
rights and advantages accruing #rom a given portion o# land which were vested in
the ,amindars by the settlement! Thus contrary to the e+pectations o# the
#ramers$ the Permanent Settlement brought about a great circulation o# titles$ but
not o# land! In the absence o# a land mar-et$ the changes brought about by the
circulation o# titles did not bring about a radical redistribution o# land!
The Permanent Settlement led to certain signi#icant changes! Cost notable
change was the trans#er o# land and the increase in the mar-etability o# land! In
the pre;ritish days land was not a mar-etable asset but now land could be
pledged to obtain loan! *s a result o# new laws regarding revenue and sale there
was trans#er o# land #rom old to new landholders! :ue to heavy land revenue
demands many proprietors were unable to meet these demands$ were either
driven into debt and #ound lands directly sold o## #or revenue arrears! Some
landholding #amilies ac"uired more land while some new men o# commercial
origins entered the rural sea!
0owever$ it has been argued that those who bought ,amindaris in auction were
not e+actly 8new) men in the engal agrarian society! The old ,amindaris were
parceled out by their own amlas ?,amindari o##icials@ and rich tenants or by the
neighbouring ,amindars among themselves! Coreover$ some o# the old ,amindari
houses$ such as the urdwan ra($ survived by resorting to the novel method o#
subin#eudation that complicated the tenurial structure! These subin#eudatory
patni tenures$ which sometimes proli#erated up to twelve grades between the
,amindars and the peasants$ increased the demand on the latter!
*t the time o# the Permanent Settlement$ 36;3'D o# land was cultivated! It
increased to 7';36D by the end o# the 13
th
century! 0istorically the Permanent
Settlement was an improvement on the harsh revenue settlements o# the period
#rom 17&';1793! /hile the landlords derived bene#its #rom the secured rights$ the
actual cultivator did not bene#it! The cultivator continued to su##er #rom the same
insecurity and harshness o# treatment! The cultivators #urther came to su##er as
their rent was collected with strictness and no remissions were given even in
un#avourable circumstances! This development o# the Permanent Settlement was
une+pected! 5ord Cornwallis had believed that the bene#it o# secured possession
at a #air rent would be e+tended by the ,amindars to the ryots! 0owever$ the
,amindars denied the bene#its o# security to their peasant tenants!
*s the price o# crops and rental values shot up in the early years o# the 19
th
century the ,amindars #ound it convenient to arrange #or the rents to be collected
through intermediaries called patnidars or i(aradars! The intermediaries would
hold estates under a ,amindar$ pay him a #i+ed rent but were #ree to ma-e any
rental demand on the peasants! * large number o# middlemen grew leading to
subin#eudation and absentee landlordism! This process o# subin#eudation went to
e+treme lengths in some permanently settled areas as rental values determined
by mar-et #orces continually rose!
The Permanent Settlement also resulted in the multiplication o# litigation! In
1799 vast powers were given to the ,amindars! 7edress against un(ust acts o# the
,amindars was provided by appealing in the civil courts! The poor tenant
cultivators had no -nowledge o# the #unctioning o# the courts$ o# their rights and
had no money #or litigation! The peasant cultivators were denied their customary
protection while the civil courts #ailed to sa#eguard their interest! The
relationship o# trust between the ,amindars and the tenants bro-e down!
Cornwallis) belie# that a vigorous commercialism would enter agriculture as soon
as the uncertainty o# revenue demand was ended was not reali,ed! *lthough there
were "uite a #ew landlords who had su##icient resources but they were not
enterprising enough to invest #unds #or agricultural improvements! 7atnale-ha
7ay argues that the #actor which prevented the ,amindars #rom playing the part
o# model landlords$ bringing about capitalistic improvement in land$ was the
di##iculty o# ac"uiring physical control o# land at the local level! The "uarrels
between the rival ,amindari branches$ the grant o# i(aras o# distant villages to
revenue #armers and the creation o# sub;tenures called patnis prevented the
conversion o# purchase titles into actual possession!
The state also reali,ed that it had no sta-e in the increased rental value and the
price o# the land! The state secured the political base o# an in#luential class as the
,amindars became staunch allies o# the government and was #reed #rom the e+tra
burden o# yearly assessment which stabili,ed its income! 0owever$ the Company
reali,ed that its #inancial loss resulting #rom the sacri#ice o# revenue was
immense!
*s the amounts o# the annual payments by landlords were #i+ed under the
Permanent Settlement$ they were le#t #ree to retain the balance between their
payments to governments and collections #rom their tenants! *s a conse"uence$
they en(oyed the whole bene#it o# increased cultivation! Though there was an
occasional increase in the government revenue share$ but over all it re#lected a
declining trend! The land revenue demand which in 1793 was #i+ed at 96 percent
o# rental declined by the end o# the 19
th
century to .3 percent!
Some recent economic historians have "uestioned the view that the ritish land
revenue policy led to a pro#ound trans#ormation o# the rural society! They assert
that there was more or less a continuation o# the pre;ritish system!
7ay stresses on the element o# 8continuity) within the 8traditional) agrarian order!
7ay notes a marginal modi#ication at the bottom in the areas o# Permanent
Settlement! Even the change at the top$ 7ay argues$ was not as drastic as is
conventionally presumed$ nor was it a new phenomenon! Such changes were
occurring in the period prior to ritish rule$ and according to 7ay$ constant
change at the upper levels continued a#ter the Permanent Settlement! In truth$
the rule o# property in soil proved to be a hal#;hearted measure!
7ay)s conclusion that even the changes at the 8upper levels) were a continuation o#
a 8pre;modern) process is hardly convincing! *ll changes are not o# the same
order! The composition o# the ,amindars may not have changed a#ter the
Permanent Settlement$ but their authority$ power$ #unction$ and the nature o#
their relationship to other classes within the rural order were trans#ormed! The
settlement led to de#inite changes within the social #abric! I# one re#ers to the
entire structure o# social relations$ the conclusions about 8continuities) would be
more di##icult to sustain!
There is also enough evidence to show that at a 8lower level) the customary claims
o# poor peasants$ landless petty tenants and agricultural labourers were gradually
eroded$ and the nature o# their subordination within the agrarian structure
underwent a change!
It has been argued that ritish revenue settlements represented primarily the
economic and political preconceptions o# ritish o##icials which were imposed on
Indian soil and in the process they disrupted traditional Indian arrangements!
Cornwallis) introduction o# the Permanent Settlement o# 1793 owed much to the
/higgish and Physiocratic regard #or landlord proprietorship! This was
challenged by the rise o# utilitarianism in the early 19
th
century! Eric Sto-es
argues that ideological disli-e #or landlordism was a ma(or #actor behind the
development o# 7yotwari and Cahalwari Settlements!
0owever$ it has been asserted by some historians that the ritish were not
imposing their doctrines and policies upon a peasant agrarian society and their
revenue settlements were o#ten #ormali,ation o# arrangements prevalent at the
village level! Even at the provincial level$ it may be agued$ that the basic structure
o# indigenous land tenure dictated the broad shape o# local government policies!
There#ore the o##icial policies and local reality did not act as antithesis! %#ten we
#ind that the policies o# the o##icials owed more to pragmatism than to ideological
in#luences and also we #ind that their policies were in#luenced by the local
situation and the in#ormation made available to them by their Indian
subordinates about the people who would contract to pay revenue!
Thus$ the ritish land revenue policy$ when applied to the locality$ very o#ten
assumed an altogether di##erent shape determined by the particular local
mechanism! 2nder these circumstances$ it bore little trace o# the original
conceptions and intentions o# the planners and gave rise to unanticipated results!
The Permanent Settlement$ which led to une+pected conse"uences$ largely #ailed
in #ul#illing its purpose and was eventually abandoned!
ibliography=
Aeeladri hattacharya E Colonial State and *grarian Society ?Situating Indian
0istory@
7atnale-ha 7ay E Intellectual %rigins o# the Permanent Settlement
7atnale-ha 7ay E Continuity and Change in engal *grarian Society
Se-har andyopadhyaya E 9rom Plassey to Partition

y=
Su#ia <han
0istory ?hons@ III yr
7oll Ao! 11'7