Permanent Settlement in Bengal : Features and Impact

Sansar LochanModernLeave a Comment

The revenue administration was a complicated affair and no permanent decision was taken about it prior to the arrival of Lord Cornwallis in India. The Directors had instructed Cornwallis that after assessing the revenue records of some past years, a settlement should be made with zamindars for some years but with a view that it could be made permanent in the near future. These instructions of the Directors were the primary cause of the Permanent Settlement in Bengal, Bihar and Orissa concerning revenue. Therefore, it is wrong to assume that Cornwallis, because of his background of a landlord in England, was motivated in having a permanent settlement with the zamindars in Bengal. Sarkar and Datta write: “The permanent settlement was no product of any preconception of Lord Cornwallis in favour of the landlord system in England.” However, there were certain questions concerning revenue. These questions were as follows:

  1. With whom was the settlement to be made? With the zamindars or the peasants?
  2. What should be the share of the state in the produce?
  3. Was the settlement to be permanent or only for some years?

Charles Grant opined that the state was the master of the land and, therefore, was free to make settlement either with landlords or with peasants. Contrary to this view Sir John Shore argued that landlords were the owners of the land, therefore, the state had only the right to collect a part of the revenue from them. The Directors gave their orders in favour of the landlords in 1784. The question, therefore, was closed.

Permanent Settlement in Bengal was brought by the Governor-General Lord Cornwallis

Permanent Settlement in Bengal was brought by the Governor-General Lord Cornwallis

The next question was what should be the basis of fixing the revenue with landlords? Charles Grant and Sir John Shore gave contradictory opinions regarding this as well. Charles Grant was of the view that the revenue could be settled only on the basis of the produce of the land. And, as the Company had not collected the revenue so far on that basis, the new settlement should be made on the basis of the produce of the land and the revenue collected in the year 1765. On the contrary, Sir John Shore advocated that the only basis of settling the revenue could be the revenue collected during some preceding years. Lord Cornwallis agreed to the proposal of Sir John Shore and the revenue was settled with the zamindars on the basis of the revenue collected in the year 1790-91.

Whether the revenue was to be settled permanently with the zamindars or for a few years was yet another problem. Charles Grant and Sir John Shore, however, were of the same opinion in this matter. They advised that the settlement should be only for some years. But Lord Cornwallis was in favour of permanent settlement. The matter was referred to the Court Directors who finally decided in favour of a permanent settlement. Therefore, though in 1790 initially the settlement with the landlords was made for ten years, it was declared permanent in 1793 after getting consent of the Directors.

Basic Features of the Permanent Settlement in Bengal

The basic features of the Permanent Settlement in Bengal were as follows:

  1. The landlords were made hereditary owners of the land under their possessions. They and their successors could not be dispossessed of their lands till they paid their revenue to the state.
  2. The landlords could sell their lands and also had the right to purchase land.
  3. The state kept no direct contact with peasants.
  4. The Company’s share in the revenue was fixed permanently with the landlords.

Advantages and Disadvantages of the Permanent Settlement

Scholars have expressed divergent opinions regarding the Permanent Settlement. Mr. Marshman remarked: “It was a bold, brave and wise measure.” But, certain other scholars are equally critical of it. Mr. Holmes wrote: “The permanent settlement was a sad blunder.” James Mill also criticized this measure while Mr. Thornton wrote that the measure was the result of complete ignorance of Cornwallis concerning Indian affairs.

The scholars, supporting this measure have pointed out certain advantages of it. The measure made the landlords the hereditary owners of their lands. It brought two advantages.

  1. Firstly, it created a class of people who became permanent supporters of the English rule in India because their position depended on the British. It, thus, strengthened the British Empire in India.
  2. Secondly, it helped in increasing the prosperity of the provinces of Bengal, Bihar and Orissa. The landlords took interest in increasing agriculture production because they were its only beneficiaries. They had to pay a fixed amount as revenue to the Company while their share in the production was not fixed. They could arbitrarily fix it with the peasants. Of course, they were asked to give pattas (agreement deeds with the peasants) to the peasants but the practice was not adhered to. Therefore, they could keep maximum share of increased production to themselves.

Hence, the landlords took measures to increase agriculture production. Besides, the landlords were made free from the responsibility of dispensing justice and maintaining peace and order in the land under their jurisdiction. They were not asked to pay any succession duty as well. This made them free to devote their energy towards agriculture. It also improved their financial position. All this certainly brought out beneficial results. Agriculture production increased and the area under cultivation also increased. It had a favourable effect on trade and industry in Bengal and helped in bringing prosperity to the provinces of Bengal, Bihar and Orissa. Besides, though the government could not increase its share in the revenue, the growth of trade and industry certainly helped it financially. The government was also assured of a fixed yearly income for which it had neither to exert itself nor to make any expenditure. The servants of the Company became free from the responsibility of looking after the revenue administration. It made them free to look after the trade of the Company and take care of the fields of administration like justice, police etc.

On the contrary, many other scholars have contended that the Permanent Settlement affected adversely the interests of the Company, the then landlords, and worst of all the peasants. The Permanent Settlement, of course, strengthened the foundation of the English rule in India; but, from the point of view of Indians, it meant strengthening the bonds of their slavery. Besides, the Company suffered financial loss in the long run because it could not enhance the revenue in proportion with increased agriculture production.

The landlords also suffered initially. The Company’s demand of revenue was very high. Therefore, many landlords could not pay the revenue settled with the Company and were either dispossessed of their lands or became victims of the moneylenders. The result was that gradually the land was either taken over by the traders and profiteers belonging to the city or by English officers who had no interest in land except that of earning maximum profit.

In the long run, it was also realised that the Permanent Settlement harmed the trade-interest of the company. When Industrial Revolution took place in Britain and it required a larger market for its finished goods, Indian market was searched for the purpose. It was then felt that the Permanent Settlement had created only a handful of Indians, i.e. zamindars who had the buying capacity of the British goods. Therefore devolution of wealth was felt a necessity and, later on, Mahalwari and Ryotwari system were introduced at different places in India so that larger number of people could be well off financially and built up the capacity of buying British goods.

However, the peasants suffered worst because of this permanent settlement. They were left entirely at the mercy of their landlords and, therefore, suffered from rack-renting and extortion. It was a blunder to dispossess the majority consisting of the cultivators of the right of ownership with the view to giving ownership rights to a minority consisting of the landlords. Sir Charles Metcalfe wrote: “Cornwallis instead of being the creator of property in India, was the great destroyer of it.” Mr. Bevridge writes: “A very grave blunder as well as gross injustice was committed when a permanent settlement was made with the landlords alone and the rights of the farmers were completely ignored.”


Thus, the Permanent Settlement brought no advantage to anybody except the landlords. It proved more harmful than useful. Besides, whatever advantaged it had, those could be achieved by a settlement which covered a period of nearly fifteen to twenty years. The Company also realised it and, therefore, did not introduce it in other parts of India except in Northern Sarkars in the South and the district of Banaras in the North. The permanent settlement system was completely abolished after India’s independence.

Points to remember

  1. Among several reforms carried out by Cornwallis, the most prominent one was the Permanent Settlement concerning the revenue.
  2. He received contradictory advises from his subordinates. Charles Grant and Sir John Shore, but finally, on the advice of the Director, he first made a Settlement in 1790 and then declared it permanent in 1793.
  3. By permanent settlement, the landlords were made hereditary owners of their lands till they paid their fixed annual revenue to the Company.
  4. The permanent settlement had certain advantages, viz., the landlords became permanent supporters of the British Raj; the landlords took interest in the progress of agriculture which resulted in increased agriculture as well as trade and industry; the Company was assured of a fixed yearly income; and, it also became free from the responsibility of collecting revenue.
  5. But, the settlement had several disadvantages, viz., the Company could not draw any advantage from increased agriculture; initially, the landlords also suffered because the revenue to be paid by them was fixed on a very high side; it strengthened the bonds of slavery of the Indians; later on, it was realised that it affected adversely the trade-interest of Britain; and, the worst sufferers were the peasants as they were left entirely at the mercy of the landlords.

Source used : NCERT, Tamil Nadu Board, IGNOU Modern History, NIOS textbooks. Wikipedia notes for UPSC exam.

Tags : PDF for UPSC exam notes. Who introduced this system? Permanent Settlement features and its impact. 

Questions for UPSC mains :

Point out the merits and demerits of Permanent Settlement of Bengal.


Discuss the impacts of Permanent Settlement of Bengal (1793) on (i) the British Government, (ii) the zamindars, and (iii) the ryots.

Books to buy

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.