The Permanent Settlement and the Ryotwari System | CBSE Class 12 History Notes

Part of: Colonialism and the Countryside (CBSE Class 12 History, Themes in Indian History Part III, Theme 9). This page goes deeper into two of its sections: how Bengal's revenue came to be fixed for ever, and how the ryotwari system of Madras and Bombay differed.

What revenue experiments came before the Permanent Settlement?

In 1765 the East India Company gained the diwani of Bengal, the right to collect its land revenue. A severe famine followed in 1769 and 1770. Banglapedia estimates that about a third of the people, some ten million, died.

In 1772, under Warren Hastings, the Quinquennial Settlement farmed out the revenue of districts or parts of districts for five years to the highest bidders. Many bidders fell into arrears.

Short settlements with zamindars followed from 1777. Lord Cornwallis arrived as Governor General in 1786, and John Shore, a leading revenue expert, soon joined his council. Rules of 1789 and 1790 set up a ten-year, or Decennial Settlement, in Bengal, Bihar and Orissa.

Shore argued against making its rates perpetual, but Cornwallis insisted. The Court of Directors agreed in 1792, and a proclamation of 22 March 1793 declared the settlement permanent.

Source box: Lord Cornwallis, minute of 18 September 1789 (Fifth Report, Firminger edition, 1917). "I may safely assert, that one-third of the Company's territory in Hindostan, is now a jungle inhabited only by wild beasts. Will a ten years' lease induce any proprietor to clear away that jungle, and encourage the ryots to come and cultivate his lands...?"

Question: what does Cornwallis expect a zamindar to do once his revenue can never rise?

What did the Permanent Settlement fix, and what did it leave open?

The settlement was made with rajas and taluqdars, all now classed as zamindars. Each one's villages formed an estate whose total revenue was fixed in perpetuity. He gathered rent from the ryots, paid the Company and kept the rest.

The Company wanted a regular income. It also hoped that landholders, sure of keeping any gain from improvement, would invest in the land and become loyal improving landlords.

Under the sunset law, dues unpaid by sunset on the fixed day made an estate liable to auction. The demand was pitched high, since it could never be raised.

No survey or record of rights was made; officials hoped zamindars and ryots would settle terms themselves. Under Wellesley, Regulation VII of 1799, the haftam, let zamindars distrain the crops and cattle of ryots in arrears.

Banglapedia judges that the haftam reduced ryots to tenants-at-will. The Rent Act of 1859 began to recognise some ryots' rights, and the Bengal Tenancy Act of 1885 curbed zamindari privileges.

Did the old zamindars lose their estates, and who were the jotedars?

Many zamindars fell behind in the 1790s. Prices were low, rents came in late, and the Company had disbanded their troops. NCERT reports that over three-quarters of zamindaris changed hands after 1793.

A sale did not always end a family's control. At the Burdwan auction of 1797, many buyers were the raja's own servants and agents, and over 95 per cent of the sale proved fictitious. The raja had also put some land in his mother's name.

His men would bid, refuse to pay and force a fresh sale until the estate returned cheaply. These benami deals, made in another person's name, ran large: between 1793 and 1801 four great zamindaris, Burdwan among them, made purchases of this kind worth as much as Rs 30 lakh.

Village power often lay lower down, with the jotedars, rich peasants strongest in north Bengal. Francis Buchanan toured Dinajpur in 1807 to 1808.

NCERT, using his account, shows jotedars, some with several thousand acres, who lent money, controlled local trade, used sharecroppers and often bought auctioned estates. Buchanan found them stubborn: they paid only a few rupees, fell behind on almost every instalment and held more land than their pottahs allowed.

Why do historians read the Fifth Report critically?

A House of Commons Select Committee sat for four years inquiring into the Company's affairs. Its Fifth Report is dated 28 July 1812; NCERT says it was submitted in 1813, so the student should know both dates.

Of its 1,002 pages, over 800 were appendices: petitions from zamindars and ryots, Collectors' reports, revenue tables and the minutes of Shore and Cornwallis. For over a century it shaped the usual picture of rural Bengal.

NCERT notes that later work in zamindari archives and district records found it exaggerated the old zamindars' fall. Readers even differ on its slant: NCERT sees a report keen to expose Company misrule, while Banglapedia calls it favourable to the Company.

The student should ask who compiled such a report, for whom and why. Its auction figures count estates sold, not who held them afterwards.

How did Read and Munro shape the ryotwari system in Madras?

In 1792 the Company gained the Baramahal from Tipu Sultan. Captain Alexander Read ran it as Superintendent, with Thomas Munro among his three military assistants, until war resumed in 1799.

They dealt with each cultivator, not a landlord, and laid a rate on each surveyed holding. Munro took the method to the Ceded Districts, which he ran from 1800 to 1807.

Under this ryotwari method, each registered holder was recognised as proprietor of his fields, paid the state directly and could give up or add land each year.

After a spell of village leases, a despatch of 16 December 1812 ordered the system for Madras lands not held by zamindars. Munro, Governor from 8 June 1820, pressed it forward until he died of cholera on 6 July 1827.

Munro wanted moderate field rates fixed for good, yet Madras rates were revised: a general revision was ordered in 1855 to 1858, with thirty-year settlements.

Source box: Thomas Munro, minute of 15 August 1807 (in Arbuthnot's Selections from his Minutes, 1881). "Why, then, attempt to subvert an ancient system which places the great body of ryots above want, renders them industrious, frugal, and comfortable, and preserves the simplicity of their manners and their respect for public authority?"

What it shows: Munro presented ryotwari as Indian custom; the Deccan evidence below tests that claim.

How did ryotwari work in the Bombay Deccan, and why did ryots fall into debt?

By the 1820s many officials had absorbed David Ricardo's theory of rent: an owner deserved only the average rent, and any surplus could be taxed. Bengal's rent-living zamindars seemed to prove the point.

NCERT's timeline dates the first Deccan settlement to 1818, while its text speaks of the 1820s. Officials estimated each soil's average yield, judged the ryot's capacity to pay and took a share. A fresh survey every thirty years would bring higher rates.

The early demand was crushing. On thin soils with unreliable rain, ryots deserted their villages. Collectors seized crops and fined whole villages. Prices fell after 1832, famine struck in 1832 to 1834, and ryots borrowed to pay the state.

By the 1840s officials admitted the first settlements had been too harsh and eased the demand. A fresh survey from 1835 under Goldsmid and Wingate shaped the later Bombay method, set out in their Joint Report of 1847.

How did the Permanent Settlement, ryotwari and mahalwari compare?

The mahalwari pattern grew in the North-Western Provinces. Holt Mackenzie's minute of 1 July 1819 showed that joint bodies of village proprietors existed there. Regulation VII of 1822 then based settlement on the village or mahal, whose co-sharers answered jointly for one sum. Baden-Powell credits Regulation IX of 1833 with making the first settlements work.

Who gained and who lost, and how do historians judge the two systems?

Ranajit Guha, in A Rule of Property for Bengal (1963), traced the fixed revenue to physiocratic economics and Philip Francis's anti-feudal views. In his reading, a plan for capitalist farming ended by propping up a neo-feudal order.

NCERT also stresses practical motives: a rural economy in crisis and a need for steady revenue. The Company gained a secure income but no share of later growth, since after 1810 rising prices lifted zamindars' rents while its demand stayed fixed.

Zamindars who survived the 1790s grew stronger. NCERT notes that the jotedars finally overtook them in the depression of the 1930s.

Munro promised a direct title and moderate rates; NCERT's Deccan evidence shows high, rigid demands, flight and debt. In a House of Lords debate of 14 April 1856 on torture by Indian officials in Madras, including in revenue collection, the Earl of Albemarle blamed over-assessment.

Lord Ellenborough replied that the revenue was "not excessive, but ill assessed and ill administered". Both systems reach us mainly through official papers, so each claim needs testing against other evidence.

Timeline: when did the key revenue settlements happen?

The two systems took shape over half a century, the later one partly in reaction to Bengal.

Sources: which texts and references support this page?

• NCERT, Themes in Indian History Part III, Theme 9, "Colonialism and the Countryside", reprint 2026-27 (1765; 1793 to 1801; 1797; 1810; 1813; 1818; 1832 to 1834); CBSE History syllabus, 2026-27.
• B. H. Baden-Powell, A Short Account of the Land Revenue and its Administration in British India, 1894 (1772; 1786; 1792; 1793; 16 December 1812; 1 July 1819; 1822; 1833; 1835; 1847; 1855 to 1858).
• Dictionary of National Biography: "Cornwallis, Charles", 1887 (22 March 1793); "Munro, Thomas", 1894 (1799; 6 July 1827). C. E. Buckland, Dictionary of Indian Biography, 1906 (1800 to 1807; June 1820).
• A. J. Arbuthnot, ed., Major-General Sir Thomas Munro: Selections from his Minutes, vol. 1, 1881 (1792 to 1799; 15 August 1807; 8 June 1820).
• W. K. Firminger, ed., The Fifth Report, dated 28 July 1812, vol. II, 1917 (minutes of 18 September 1789); British Library, IOR/H/384, 1789 to 1792; Regulation VIII of 1793 (rules of 1789 and 1790).
• Banglapedia, Asiatic Society of Bangladesh, consulted November 2026: "Quinquennial Settlement" (1772; 1777); "Famine" (1769 to 1770); "Permanent Settlement" (1799; 1859; 1885); "Fifth Report, 1812" (1812).
• British Library, "The Bengal Survey (1807 to 1814)" (Dinajpur, 1807 to 1808).
• Ranajit Guha, A Rule of Property for Bengal, 1963; Duke edition, 1996.
• Hansard, House of Lords, "Torture in Madras", 14 April 1856.

Glossary

• Diwani: the right to collect a province's land revenue, granted to the Company for Bengal in 1765.
• Quinquennial Settlement: five-year farming of Bengal's revenue to the highest bidders, begun under Warren Hastings in 1772.
• Decennial Settlement: the ten-year settlement under rules of 1789 and 1790, declared permanent in 1793.
• Sunset law: the rule that an estate with revenue unpaid by sunset on the due date could be auctioned.
• Haftam: Regulation VII of 1799, which let zamindars distrain the crops and cattle of ryots who owed rent.
• Record of rights: an official register of who holds which land and on what terms; Bengal had none in 1793.
• Mahalwari: settling revenue with a village or mahal, whose co-sharers were jointly responsible for one sum.

Common errors and misconceptions

• Misconception: The Permanent Settlement covered all of British India. Correct: It was made for Bengal, Bihar and Orissa and rarely extended. Later territories got temporary settlements.
• Misconception: Ryotwari revenue was fixed for ever, as in Bengal. Correct: Munro hoped for lasting field rates, but Madras and Bombay revised theirs, usually every thirty years.
• Misconception: Every auction meant a new owner. Correct: At Burdwan in 1797, over 95 per cent of the sale was fictitious; benami buyers kept many estates in old hands.
• Misconception: Ryotwari began in the Bombay Deccan. Correct: It grew from Read and Munro's work in the Baramahal from 1792, before the Deccan settlements of the 1820s.
• Misconception: The Fifth Report is a neutral record. Correct: It came out of a political inquiry, and NCERT finds that it exaggerated the zamindars' collapse.

Exam-style questions with model answers

Q1. Which Governor General proclaimed the Permanent Settlement in 1793? (a) Warren Hastings (b) Lord Cornwallis (c) Lord Wellesley (d) John Shore [1 mark]

(b) Lord Cornwallis. His proclamation of 22 March 1793 fixed the revenue demand on the zamindars of Bengal, Bihar and Orissa for ever.

Q2. Explain three ways in which the ryotwari system differed from the Permanent Settlement. [3 marks]

1. Payer: ryotwari settled with each ryot directly, while Bengal settled with zamindars, who collected rent from the ryots.
2. Basis: ryotwari rested on surveyed fields and classed soils, while Bengal's estates were assessed in lump sums without a survey.
3. Revision: ryotwari rates were revised, usually every thirty years, while the Bengal demand was fixed in perpetuity.

Q3. Read Munro's minute of 15 August 1807 in the source box. (i) Which system was he defending? (ii) Name two benefits he claimed for it. (iii) Give one piece of evidence from the Bombay Deccan that tests his claim. [4 marks]

1. (i) Ryotwari, settling directly with each ryot, rather than settling through zamindars.
2. (ii) He claimed it kept the great body of ryots above want and made them industrious and frugal.
3. (ii) He also claimed it preserved simple manners and respect for public authority.
4. (iii) In the Deccan, high early demands drove ryots to leave their villages and borrow, so the benefits depended on moderate rates.

Q4. Examine the aims and working of the Permanent Settlement in Bengal. How far did it achieve what the Company intended? [8 marks]

1. Background: after the diwani of 1765, the famine of 1769 to 1770 and failed farming from 1772, the Company wanted stability.
2. First aim: a regular income, from zamindars whose demand was fixed in perpetuity in 1793.
3. Second aim: secure property would turn zamindars into improving, loyal landlords, as Cornwallis argued in 1789.
4. Working: a high demand, enforced by the sunset law, sent many estates to auction in the 1790s.
5. Limit: auctions often failed to displace old families; at Burdwan in 1797 many buyers were the raja's own agents.
6. Limit: jotedars in north Bengal controlled land, credit and trade, and resisted zamindari authority in the villages.
7. Ryots: no record of rights protected them, and the haftam regulation of 1799 strengthened zamindars against them.
8. Outcome: the Company kept a steady income but no share of rising rents after 1810; Guha argues the plan produced a neo-feudal order.

Key takeaways

• The diwani of 1765, the famine of 1769 to 1770 and failed revenue farming from 1772 led towards a fixed settlement.
• Cornwallis turned the Decennial Settlement into the Permanent Settlement on 22 March 1793, hoping for steady revenue and improving landlords.
• The sunset law and high demands brought mass auctions, but benami purchases let many old zamindars keep control.
• Jotedars in north Bengal, described by Buchanan, held land, credit and trade, often outweighing zamindars in the villages.
• Read and Munro built ryotwari in the Baramahal, and Munro carried it to the Ceded Districts, settling with each ryot on surveyed fields.
• Guha stresses European ideas behind 1793, while Deccan evidence shows ryotwari could burden ryots with high demands and debt.

Test yourself

What was the Quinquennial Settlement of 1772?

A five-year farming of Bengal's revenue to the highest bidders under Warren Hastings.

What did the sunset law require?

Revenue unpaid by sunset on the due date made the estate liable to sale at auction.

How did the Raja of Burdwan keep his estates after the auction of 1797?

His servants and agents posed as buyers, so over 95 per cent of the sale was fictitious, and he had moved some land to his mother's name.

Why do historians question the Fifth Report?

It came from a political inquiry, and later research found that it exaggerated the zamindars' collapse.

Where did Read and Munro first try ryotwari methods?

In the Baramahal, acquired in 1792, where Read was Superintendent and Munro one of his assistants until 1799.

What was the unit of revenue under the mahalwari system?

The village or mahal, whose co-sharers jointly owed one assessed sum under Regulation VII of 1822.