Permanent Settlement

The 'Permanent Settlement' - also known as the 'Permanent Settlement of Bengal' (Bangla: ?????????? ?????????, Chirosthayi Bandobasto) - was an agreement between the East India Company and Bengali landlords with far-reaching consequences for both agricultural methods and productivity in the Empire and the political realities of the Indian and Pakistani countryside. It was concluded in 1793, by the Company administration headed by Lord Cornwallis.

Background

Earlier zamindars in Bengal had been functionaries who merely held the right to collect revenue on behalf of the Mughal emperor and his representative or diwan in Bengal, who in turn would supervise their activity closely and ensure that they were neither lax nor overly stringent. However, the East India Company, on being awarded the diwani or overlordship of Bengal by the empire following the battle of Plassey in 1765, found itself short of trained administrators, especially those familiar with local custom and law. As a result, landholders found themselves unsupervised reporting to corrupt and indolent officials; consequently the extraction of revenue proceeded unchecked by any regard for future income or local welfare.

Related Topics:
Zamindar - Mughal - Diwan - Battle of Plassey

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Following the devastating famine of 1770, which was partially caused by this short-sightedness, the importance of oversight of revenue officials was understood by the Company officials in Calcutta. Unfortunately, the question of incentivisation was ignored; hence Warren Hastings, then governor-general, introduced a system of five-yearly inspections and temporary tax farmers.

Related Topics:
Warren Hastings - Governor-general

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Naturally, those appointed as tax farmers absconded with as much as they could in the time period in between inspections. The disastrous consequences of the system were noted in Parliament, and Pitt in 1784 directed the Calcutta administration to alter it forthwith; in 1786 Cornwallis was sent out to India to oversee the alteration.

Related Topics:
Pitt - Cornwallis

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