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Permanent Settlement 1793, History, Features, Impact, Merits, Demerits

Permanent Settlement was introduced 1793, by governor general Lord Cornwalli, enacted in Odisha, Bihar, and Bengal. Check history, features, impacts, merits and demerits of Permanent Settlement Act.
authorImageParul Rishi19 Jun, 2026
Permanent Settlement

Permanent Settlement: In 1793, Governor-General Lord Cornwallis introduced the Permanent Settlement, also known as the Permanent Settlement of Bengal. This agreement between the British East India Company and Bengal's landlords aimed to set a fixed amount for land revenue. Land revenue served as a primary income source for the British in India, and the Permanent Settlement was a specific system to manage it. Initially implemented in Bengal and Bihar, it later extended to Madras and Varanasi. This system was also referred to as the Zamindari system.

Permanent Settlement

The Permanent Settlement was established by Cornwallis, the second governor-general of Bengal, in 1793. Initially implemented in Odisha, Bihar, and Bengal, it later extended to Varanasi and parts of northern Madras Presidency through subsequent regulations. This settlement endured until the Charter Act of 1833. It essentially formalized an agreement between the East India Company and landlords in Bengal. The system aimed to set a fixed land revenue based on agricultural productivity. It streamlined interactions between the company and Zamindars, reducing the company's dealings from numerous farmers to a smaller group of Zamindars. This article will delve into the Permanent Settlement Act, its characteristics, advantages, and disadvantages.

Permanent Settlement Act 1793

Under the Permanent Settlement Agreement, the government of Bengal adopted a system where landowners had to pay a fixed amount of money to the government. These landowners, called zamindars and talukdars, had the power to decide how much rent they charged their tenants and could even remove them from the land if they wanted to. If these landowners couldn't pay the fixed amount, they could sell their land publicly. This was called the sunset law. However, the people who worked on the land, called raiyats, didn't have these privileges.

Permanent Settlement 1793 History

Long before the British East India Company came to India, local leaders called zamindars collected taxes for the Mughals in places like Bengal, Odisha, and Bihar. But when the East India Company took charge after the Battle of Buxar in 1764, they became responsible for managing Bengal’s finances. Unfortunately, many farmers in rural areas couldn’t reach the Company, and they didn’t understand the local laws. This lack of attention led to a terrible famine in 1770. To fix things, Warren Hastings set up a system where people bid for the right to collect taxes every five years. But this didn’t really solve the problems. Hastings also tried an annual settlement, but that didn’t work either. Then, in 1786, under the leadership of William Pitt, Lord Cornwallis introduced the permanent settlement system. This system, officially made into law in 1793 with the Permanent Settlement Act, aimed to create a fixed tax system. However, this system had its own issues and didn’t solve all the problems for the farmers.

Permanent Settlement Features

  • The Permanent Settlement made landlords, called zamindars, the official owners of land in places like Odisha, Bihar, and Bengal.
  • These zamindars had the right to pass on the land to their descendants.
  • They could also sell or give away the land as they wished.
  • The zamindars had to pay a fixed amount of money as revenue to the government, which was collected at a specific time.
  • If they couldn't pay this fixed amount, they risked losing their rights to the land, which could be auctioned to get the revenue.
  • The government promised not to increase the fixed revenue amount, ensuring stability for the landlords.
  • Out of the revenue collected, the government took 10 parts out of 11, leaving just 1/11th for the zamindars.
  • Although this system was based on a similar one in England, the tax rates were much higher in these regions.
  • Additionally, zamindars provided tenants with a document called a "patta," which outlined the area rented from the landlord and the rent to be paid.

Permanent Settlement Impact

The impact of permanent settlement is explained below in terms of Zamindars, Peasants, and Company:

Effect of Permanent Settlement on Peasants

  1. The farmers and cultivators in Bengal felt burdened by this system as they became dependent on the Zamindars for their livelihood.
  2. They often had to take loans to pay taxes and were sometimes taken advantage of by the Zamindars.
  3. If they couldn’t pay taxes, they risked losing their land.

Effect of Permanent Settlement on Zamindars

  1. Zamindars gained complete control over collecting revenue.
  2. Their profits relied on increased land production.
  3. If Zamindars couldn’t pay the revenue, the Company confiscated their properties.
  4. They acted as middlemen and helped with the British political agenda.
  5. The fixed revenue made it hard for Zamindars to adapt quickly.

Effect of Permanent Settlement on the Company

  1. The Company received a steady income through this settlement.
  2. Improving land productivity became the Company’s responsibility.
  3. This led to more cultivation and higher market prices.

Permanent Settlement 1793 Drawbacks

The Permanent Settlement system had more downsides than benefits. One major issue was that it relied heavily on the zamindars, who had different attitudes toward managing land. Good zamindars took care of the farmers and made changes to the land that benefited everyone involved. However, if a zamindar wasn't responsible, they neglected the farmers and the land suffered. This system led to a group of wealthy landlords who lived lavishly, forming the upper class. Even during the fight for independence, some zamindars supported the British rule. The assessment of lands and the fixed high revenues for all types of land—fertile or infertile—was unfair to the farmers. The high revenues made zamindars greedy and corrupt quickly, making the system disastrous. The British government believed that a proper land survey was necessary before establishing such a settlement.

Permanent Settlement Merits

The job of looking after farmers was given to the Indian landlords. These landlords were local people who knew the area well and understood the customs. The system was set up in a way that provided security for everyone. The company knew how much money it would make. The landlords were sure about the amount they would receive. And the farmers, with their land documents, knew exactly how much rent they had to pay. Because the system was permanent, the landlords had a reason to make the land better, which would also increase the money they earned.

Permanent Settlement Demerits

This system had a big problem. It all depended on the Zamindars, the landlords. If they were good and cared about the farmers and the land, things went well. They’d make the land better, which helped everyone. But if the landlords weren’t good, they ignored the farmers and the land’s condition. This created a group of rich landlords who had power in society. They often lived very fancy lives. The landlords mostly supported British rule and didn’t help much in the fight for freedom, although there were some who did. The problem was how they decided how much tax to take from the land. Sometimes, they didn’t do it fairly. They asked for the same tax from both good and bad land. This made it hard for farmers with bad land. And the government lost money from the good land. The tax rates were so high that many landlords couldn’t pay. In the end, this system caused a lot of problems. In 1811, the British government said that making this settlement permanent without properly studying the land was a bad idea. 

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Permanent Settlement FAQs

Q1. What is Permanent Settlement?

Ans. The Permanent Settlement of Bengal was a grand contract between the individual landholders belonging to Bengal and the East India Company. However, the revenue rate was much higher than the rates in England.

Q2. Who introduced Permanent Settlement?

Ans. In 1786, Lord Cornwallis developed the Permanent Settlement system under the guidance of William Pitt, the British Prime Minister at the time. The Permanent Settlement Act of 1793 gave effect to this in that year.

Q3. What is Permanent Settlement 1793?

Ans. In Bengal, Lord Cornwallis established the Permanent Settlement of 1793. Land income was gathered by zamindars, who were acknowledged as the land’s owners.
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