Lord Cornwallis who became the Governor-General in 1786 introduced permanent settlement in Bengal and Bihar and later in Orissa. He wanted to increase the revenue of the company and thus decided to fix the land revenue to be collected. By the terms of the settlement, the rajas and taluqdars were recognized as Zamindars. They were asked to collect rent from the peasants and pay revenue to the company. The amount to be paid was fixed permanently i.e. it could not be increased ever in future. Thus, Zamindar was made a landlord of the entire land from which till now he had only collected taxes. The cultivator now became his tenant and lost his rights. It was felt that this wold ensure regular flow of revenue in company`s treasury and on the other hand, encourage the Zamindars to invest in improving the land. As revenue demands could not be increased, the Zamindars would benefit from increased production from the land.
Under this
system, 90% of the revenue collected by the Zamindar went to the company, 10%
was kept by the Zamindar. Lord Cornwallis made this settlement permanent by a
regulation in 1793. It meant that company was assured of financial security
i.e. a regular supply of income even in case of a bad harvest. It also
increased British income as the rate of revenue was high. As Zamindars were
made the owners of the land, this class becomes loyal to British.
But, the
immediate effect of permanent settlement on Zamindars was disastrous. Many of
them could not realize land revenue from the peasamts and consequently could
not pay the money to government in time. Thus, they had no choice but to sell
or mortgage part of their land to enable them to pay the revenue. The
cultivators on the other hand were oppressed and had no rights on the land.
They were left on the mercy of Zamindars. As revenue was rigidly collected the
peasants were forced to borrow money from the money lenderds and landlords.
When they failed to repay money, their mortgaged land was confiscated. They had
to work as landless labour or as Bagaar which made their lives utterly
miserable. Thus, permanent settlement led to the deterioration of agriculture
and impoverishment of peasantry.
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