Lord Cornwallis was the first Governor-General who paid his attention to the revenue reforms and achieved marvelous success.
It was the permanent land settlement of Bengal, Bihar and Orissa. He reorganized the Board of Revenue which had the power of supervising the works of the revenue collectors.
The kanungos were the hereditary revenue officers since the time of Mughals.
The Mughal Emperor Shah Alam II had granted the Dewani of Bengal, Bihar and Orissa to the Company in 1765. When Cornwallis arrived in India, the system of land revenue which was in prevalence was that the farmer paid the tax to the Zamindar. The Zamindar collected the revenue and paid 9/10th to the state keeping l/10th for himself.
The system of annual settlement was in vogue. In 1772 Warren Hastings had introduced Quin-Quennial settlement or Five year settlement according to which the right of collection of revenue was given to the highest bidder for five years on contract basis. But this settlement failed and Warren Hastings resorted to annual settlement.
The condition of the peasants became deplorable. After his arrival in India Cornwallis found, “agriculture and trade decaying, Zamindars and rayots sinking into poverty and the money lenders the only flourishing class in the community.” In 1785 the Court of Directors permitted Cornwallis to implement a settlement with the Zamindars, at first for ten years and to be made permanent if it proved satisfactory. But in 1787 and in 1788 annual settlements were made.
In 1789 Cornwallis prepared rules for a Decennial settlement. Two different theories were held by Sir John Shore, the President of the Board of Revenue and Mr. James Grant, the Record Keeper with regard to the revenue settlement. John Shore maintained that the Zamindars were the owners of the land and the State had the right to a customary revenue from them. James Grant, on the other-hand held the view that the State was the owner of all land and the state had the right to make the settlement either with the Zamindar or the cultivator.
Ultimately, Cornwallis accepted the view of John Shore. In 1790 a settlement for ten years was made with the Zamindars who were recognized as the owners of the land. With the approval of the Court of Directors, the decennial Settlement was declared permanent on March 2, 1793.
According to the Permanent Land revenue settlement the Zamindars were recognised as the permanent owners of the land. They were given instruction to pay 89% of the annual revenue to the state and were permitted to enjoy 11% of the revenue as their share. They were left independent in the internal affairs of their respective districts. The Zamindars were required to issue Patta and Quabuliyats to the cultivators mentioning the area of their land, and the amount of revenue to be paid by them to the state. The historians have expressed divergent opinions about its merits and demerits.
According to Mr. Marshman, “It was a bold, brave, and wise measure; under the influence of this territorial character which for the first lime created indefeasible rights and interests in the soil, population has increased, cultivation has extended and gradual improvement has become visible in the habits and comfort of the people.” Mr. Holmes held the view that, “the permanent settlement was a sad blunder. The inferior tenants derived from it no benefit whatever. The Zamindars again failed to pay their rent charges and their estates were sold for the benefit of the government.” In this way several scholars also hold different views about its merits and demerits.
Merits of Settlement:
1. The Government became free from the problem of fixation of revenue every year. The state secured a stable and fixed income from the people. In case the Zamindars did not pay the revenue, the loss was made good by selling a portion of the land of the Zamindars.
2. The Zamindars took great interest to increase the production of their lands. New areas of land were brought under cultivation and the Zamindars also introduced new methods of cultivation like use of manure, rotation of crops etc. The improvement of agriculture also influenced the country’s trade and commerce a lot. Because of the all-round development, the province of Bengal became the most wealthy and prosperous state.
5. It avoided the evils of periodical settlement which at long intervals produced harassment of cultivator, evasion, concealment of wealth, a tendency on the part of the peasants to leave the land uncultivated etc.
4. By making the Zamindars the owners of the land, the settlement created a class of loyal land lords who formed a stable element in the state. The permanent settlement secured the political support of the Zamindars of Bengal who stood loyal during the great mutiny of 1857.
5. The permanent settlement saved the peasants from the oppression of the Zamindars. In this settlement the revenue was fixed through patta agreement which saved the cultivators from the oppression of the landlords.
6. Lastly, the economic prosperity of Bengal helped the rise of art, literature and education of Bengal.
Very soon, the permanent settlement turned into a machine of exploitation and affected the interests of the Zamindars, cultivators and the company alike. It created “feudalism at the top and serfdom at the bottom.”
1. The immediate effect of the settlement was harmful upon the landlords who failed to collect the revenue from the peasants and so were unable to pay the fixed revenue at fixed time. As a result they lost their proprietary right over the land.
2. In the long run the State sustained financial losses by fixing the revenue. In course of time the rents from the land increased when new areas of Land were brought under cultivation, the Zamindars continued to pay the revenue fixed by the State and the state also could not claim its legitimate share in the increase.
3. Most of the landlords did not take any interest in the improvement of the land. The landlords became indolent and led luxurious lives staying in the cities. Thus this settlement created a class of absentee landlords.
4. The Government by recognizing the rights of the Zamindars, sacrificed the interests of the peasants. They were left at the mercy of the land-lords who rack-rented them. It was a great blunder on the part of Cornwallis to deprive the cultivators of the right of ownership of land and made the Zamindars the owners of land.
5. The settlement divided the rural society into two classes namely, the Zamindars and the tenants.
Mr. Beveridge remarked, “A very grave blunder as well as gross injustice was committed when a settlement was made with the landlords alone and the right of the farmers were completely ignored.” According to Setton Carr: “The Permanent Settlement somewhat secured the interests of the Zamindars, post-ponded those of the tenants and permanently sacrificed those of the state.”
Dr. Aspinall writes, “He possessed many qualities of mind and heart which inspired confidence in others; devotion to duty, modesty, perseverance, moderation, the art of conciliation, willingness to accept the advice of those who possessed a more expert knowledge of a subject than himself.” During his stay in India, Cornwallis introduced various reforms. Some of his reforms even continued for more than twenty years. Warren Hastings laid the foundation of the administrative reforms, the superstructure of which was built by Cornwallis.