Cornwallis, who followed Warren Hastings, as Governor General of Bengal was sent with specific instructions to improve the land revenue to be collected from Bengal.
The British Parliament by an Act of 1784 directed the Court of directors to give up the practice of annual settlement of revenue to be collected and to fix up the collection of revenue of land on a permanent basis.
Cornwallis appointed an inquiry committee under the headship of Sir John Shore and asked him to inquire about the usages, tenures and rents of land revenue collection in pre-colonial India.
Sir John Shore submitted his report in 1789. On the basis of the report, Cornwallis introduced land revenue settlement for ten years with Zamindars in 1789 but the same was made permanent in 1793 by the proclamation of Cornwallis and it was known as Permanent Land Revenue settlement.
The basic features of the settlement were as follows:
1. The Zamindars were made hereditary owners of the land under their possession. They and their successors exercised total control over lands.
2. The Zamindars could sell and purchase lands.
3. The state had no direct contact with the peasants.
4. The company’s share in the revenue was fixed permanently with the Zamindars.
Thus the Permanent Land Revenue settlement involved three parties, the government, the Zamindar and the ‘ryot’ or the cultivator. As per this settlement, the role of the government and the Zamindar is fixed but the role of the ryot is not at all defined and the ryot is put at the mercy of the Zamindar and thus ryot is the worst effected due to this settlement.
Merits and Demerits of the Settlement:
Scholars hold divergent opinions about this settlement. Marshman observed that it was a bold, brave and wise measure and the Fifth Report concludes: “The measure was a success and the government had taken every step in its power to remove the minor defects”. R.C. Dutt also opines: “If the prosperity and happiness of a nation be the criterion of wisdom and success, Lord Cornwallis’s permanent settlement of 1793 is the wisest and most successful measure which the British nation had adopted in India” and he adds, that it is “the one act of British nation within the century and a half of their rule in India which has most effectively safeguarded the economic welfare of the people”.
On the contrary, Holmes, James Mill, Thurston and Raja Rama Mohan Roy were very critical about this settlement. A critical analysis of the actual operation of this settlement in years to come proves that this settlement was not at all beneficial to any party – the government, Zamindar and the ryot. Charles Metcalfe is of the view that “Cornwallis instead of being the creator of the prosperity in India was the great destroyer of it.
The cultivators who were reduced to the position of tenants suffered miserably at the hands of their landlords. The company therefore, did a grave injustice to the peasants”. Bipan Chandra also writes that compared to the British landlord, Indian landlord paid as tax 10/11th of his income from the land. As such many landlords became defaulters of tax to the government and had to sell their lands to pay the tax.
Thus, the permanent settlements proved harmful to all parties concerned and as such it was not introduced in other parts of India except northern circars in the south and in the districts of Benaras in the north. By 1811, the London authorities warned against the introduction of permanent settlement without a minute and detailed survey of the land.