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Since the grant of diwani for Bengal, Bihar and Orissa in 1765, the major concern of the East India Company’s administration in India was to collect as much revenue as possible. Agriculture was the main basis of economy and the main source of income and hence, although the nawabi administration was retained with Muhammad Reza Khan acting as the Naib Diwan for the Company, several land revenue experiments were introduced in haste to maximise extraction.
In 1772, Warren hastings introduced a new system, known as the farming system. European District Collectors, as the nomenclature suggested, were to be in charge of revenue collection, while the revenue collecting right was farmed out to the highest bidders. About the periodicity of the settlements, a number of experiments were made.
But the farming system ultimately failed to improve the situation, as the farmers tried to extract as much as possible without any concern for the production process. The burden of revenue demand on th peasants increased as a result and often it was so onerous that it could not be collected at all. The net outcome of this whole period of rash experimentation was the ruination of the agricultural population. In 1784, Lord Cornwallis was therefore sent to India with a specific mandate to streamline the revenue administration.
Up to 1793 A.D., The East India Company continued to follow the revenue farming system in Bengal Presidency. In 1782, Sir John Shore Committee was appointed to draft a new land revenue policy. The policy was approved by Michael Dundas, The President of Board of Control and William Pete the P.M. of England.
The Permanent Settlement or Zamindari Sysem was introduced by Lord Corniwallis in 1793. In Bengal, North Cauvery Delta in Madras Presidency and Varanasi division. It covered altogether 19% of the total cultivable land under company rule.
Terms and Conditions of the System
- Zamindars were recognized as owner of the lands. Zamindars were given the rights to collect the rent from the peasants.
- The realized amount would be divided into 11 parts. 1/11 of the share belongs to Zamindars and 10/11 of the share belongs to East India Company.
- The Zamindars were also given Judicial powers
- The Sunset Law come into force in the event of Zamindars becoming defaulters.
- The system was introduced for a period of 10 years.
Effect of the system
- The effects of this system both on the zamindars and ryots were disastrous. As the revenue fixed by the system was too high, many zamindars defaulted on payments. Their property was seized and distress sales were conducted leading to their ruin. The rich zamindars who led luxurious lives left their villages and migrated into towns. They entrusted their rent collection to agents who exacted all kinds of illegal taxes besides the legal ones from the ryots.
- This had resulted in a great deal of misery amongst the peasants and farmers. Therefore Lord Cornwallis’ idea of building a system of benevolent land-lordism failed. Though initially the Company gained financially, in the long run the Company suffered financial loss because land productivity was high, income from it was meagre since it was a fixed sum. It should be noted that in pre- British period a share on the crop was fixed as land tax.
The Ryotwari experiment was started by Alexander Reed in Baramahal in 1792 and was continued by Thomas Munro from 1801 when he was asked to take charge of the revenue administration of the Ceded Districts. Instead of zamindars they began to collect revenue directly from the village , fixing the amount each village had to pay. After this they proceeded to assess each cultivator or ryot separately and thus evolved the Ryotwari System. It created individual proprietary right in land, but it was vested in the peasants, rather than in the zamindars.
Effects of System
- It raised the revenue income of the government, but put the cultivators in great distress.
- In many areas no surveys were carried out and the tax of a ryot was assessed on an arbitrary basis, based on village accounts.
- The cultivating peasants were, therefore, gradually impoverished, and increasingly indebted and could not invest for the extension of cultivation.
- The Ryorwari system did not also eliminate village elites as inter mediaries between the government and the peasantry. As privileged rents and special rights of the mirasidars were recognised and caste privileges of the Brahmans respected.
Mahalwari system was introduced in 1833 during the period of William Bentick. It was introduced in Central Province, North-West Frontier, Agra, Punjab, Gangetic Valley, etc of British India.The Mahalwari system had many provisions of both the Zamindari System and Ryotwari System. In this system, the land was divided into Mahals. Each Mahal comprises one or more villages. Ownership rights were vested with the peasants. The villages committee was held responsible for collection of the taxes.
Effects of the Land Revenue Policy
- Land become a Commodity for the first time in Indian history
- Property rights in the land created for first time
- New rural classes were formed- The absentee landlords, money lenders and age earning working class.
- Commercialisation of agriculture encouraged. As a result , shortage of food crops took place causing famines. The 1832 Ganjan famine(Orissa) and 1875 deccan famine were the worst famines.
- The revenue policy was the single most important cause for all the major civilian rebellions in modern India, against the British.
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