Bangladesh University of Professionals (BUP)

Mirpur Cantonment, Dhaka- 1216

Course Name: GED1102 Bangladesh Studies

Assignment on Permanent Settlement

Submitted To
Dr. Pinke Saha
Associate Professor
Department of Finance & Banking
Faculty of Business Studies
Bangladesh University of Professionals (BUP)

Submitted By
Name: Arafin Ahmed

Student ID: 23221508022

Section: B

Batch: 2023

Date of Submission: 26.09.2023

 Permanent Settlement

Introduction
The Permanent Settlement of Bengal is a crucial event in the history of Bengal during British
rule, stands as a testament to the complex interplay of colonial ambitions, economic interests,
and agrarian realities. Initiated in 1793 by the British East India Company. The policy in
permanent settlement introduced a fixed revenue system in Bengal, Bihar, and Orissa, drastically
altering the socio-economic landscape of the region. This essay explores the Permanent
Settlement in Bengal, highlighting its historical context, advantages, and disadvantages, drawing
insights from various scholarly sources.
Many argue that the settlement and its outcome had several shortcomings when compared with
its initial goals of increasing tax revenue, creating a Western-European style land market in
Bengal, and encouraging investment in land and agriculture, thereby creating the conditions for
long-term economic growth for both the company and region's inhabitants. Firstly, the policy of
fixing the rate of expected tax revenue for the foreseeable future meant that the income of the
company from taxation actually decreased in the long-term because revenues remained fixed
while expenses increased over time. Meanwhile, the condition of the Bengali peasantry became
increasingly pitiable, with famines becoming a regular occurrence as landlords (who risked
immediate loss of their land if they failed to deliver the expected amount from taxation) sought
to guarantee revenue by coercing the local agriculturalists to cultivate cash crops such as cotton,
indigo, and jute, while long-term private investment by the zamindars in agricultural
infrastructure failed to materialize.
Historical Context
To comprehend the implications of the Permanent Settlement in Bengal, it is essential to
understand the historical backdrop. Bengal, in the late 18th century, was the epicenter of the
British East India Company's expanding influence in India. The Company sought to maximize
revenue from its newly acquired territories, a motive that played a pivotal role in the adoption of
this settlement policy.

There was already a class of Zamindars in Bengal, Odisha and Bihar. They used to collect
revenue and taxes from the peasants on behalf of representatives of the Mughal emperor or even
for the Diwans. This class was one of the most prestigious and powerful classes of then India. At
the time of Buxar, in 1764, Diwani of Bengal was granted to the EIC. Lack of knowledge
regarding local laws and customs was causing difficulties for the British tax collectors.

On the other hand, at that time in 1770, Bengal was suffering from excessive famine as well.
Such difficult situations were the main reason behind generating a more convenient system for
the British rulers to collect land revenue. Some steps to improve such crucial conditions were
taken by Warren Hastings but almost all went in vain because of low adaptability and
appropriateness. After several disagreements and trials, Lord Cornwallis came to decision about
implementing PSB in 1786. This idea was a combined proposal of William Pitt and Cornwallis.
In 1793, “the Permanent Settlement Act” was introduced and this system came into actual effect.

Reasons behind Permanent Settlement:

Revenue Stability: The primary motivation behind the Permanent Settlement was to ensure a
stable and predictable source of revenue for the British East India Company. By fixing land
revenue at a specific amount, the British aimed to eliminate revenue fluctuations and secure a
consistent income.
Reduction in Administrative Costs: The British administration believed that delegating revenue
collection to local zamindars (landlords) would reduce administrative costs and the need for a
large bureaucracy. This was expected to streamline revenue collection.
Focus on Trade: The British were primarily interested in trade and commerce, and the
Permanent Settlement allowed them to focus their efforts and resources on expanding their
commercial ventures rather than managing agrarian affairs directly.
The Permanent Settlement in Bengal, initiated by the British East India Company in 1793, had
several reasons behind its implementation. Its impact can be examined in different contexts:
global, societal (mass people), and governmental.
Impact in Different Contexts:
1. Global Context:
Economic Impact: The Permanent Settlement set a precedent for future land revenue policies in
British India. It provided a model of land revenue collection that was subsequently extended to
other regions, shaping the economic policies of British colonial rule.
International Trade: The revenue stability resulting from the settlement allowed the British East
India Company to invest in and expand its trade networks, contributing to the growth of the
British Empire's economic influence in the global context.

2. Impact on Mass People:

Rural Poverty: The Permanent Settlement had a severe impact on the rural population, especially
the peasants. Many zamindars became exploitative and charged exorbitant rents, pushing
peasants into a cycle of poverty and indebtedness.
Agricultural Stagnation: The lack of incentives for zamindars to invest in land improvement led
to agricultural stagnation. Peasants often had little access to modern farming techniques,
resulting in reduced agricultural productivity.
Social Unrest: The widespread distress among the rural population due to high land revenue and
oppressive landlords contributed to social unrest and occasional uprisings. The system
exacerbated class disparities and grievances among the masses.
3. Impact on Government:
Administrative Efficiency: Initially, the British government saw a reduction in administrative
costs as they delegated revenue collection to zamindars. However, over time, the need for
oversight and regulation of zamindars' activities increased, partially offsetting the administrative
efficiency gained.
Land Revenue Collection: The Permanent Settlement became a significant source of revenue
for the British government in India. It influenced subsequent land revenue policies and
contributed to the financial stability of the colonial administration.
Legacy of Land Tenure: The Permanent Settlement established a precedent for land tenure
systems in different parts of India. It introduced the concept of zamindari rights and landlordism,
which continued to shape land relations long after independence.

The Advantages of Permanent Settlement

Revenue Stability: The Permanent Settlement aimed to fix land revenue at a specific amount,
providing the British with a stable source of income. This financial predictability allowed for
better planning and investment in infrastructure and administration.
Reduction in Administrative Costs: By delegating revenue collection responsibilities to local
zamindars or landlords, the British administration reduced the cost and manpower required for
revenue collection.
Social Stability: The system conferred hereditary rights upon zamindars, ensuring their long-
term commitment to the land. This stability theoretically reduced the likelihood of peasant
uprisings and conflicts over land ownership.
The Disadvantages of Permanent Settlement
Exploitative Zamindars: The system often led to the emergence of exploitative and absentee
zamindars who extracted exorbitant rents from the peasants, leaving them in dire poverty.
Stagnation in Agriculture: Mentioned previously, zamindars, with little incentive to invest in
land improvement, neglected agricultural development, resulting in stagnation and reduced
productivity.
Impoverishment of Peasantry: The burden of high land revenue, coupled with exorbitant rents,
led to the impoverishment of the peasant class, causing widespread distress.
Conclusion
In conclusion, the Permanent Settlement in Bengal was driven by the British East India
Company's economic interests and the desire for revenue stability. Its impact was multifaceted,
affecting the global economic context, perpetuating rural poverty and agricultural stagnation, and
influencing the administrative and land tenure systems in colonial India. While it achieved
certain objectives, such as revenue predictability, it also left a legacy of social and economic
disparities that would shape the region's history for generations to come.

The Permanent Settlement of Bengal was a significant milestone in the history of British colonial
rule in India, leaving an indelible mark on the socio-economic fabric of the region. While it
provided certain advantages such as revenue stability and reduced administrative costs, it also
ushered in a host of disadvantages, including exploitative zamindars and agricultural stagnation.
To this day, the consequences of this policy continue to influence the dynamics of landownership
and agrarian relations in the region, serving as a reminder of the enduring impact of historical
decisions on contemporary society.

References:
Chaudhuri, K. N. (1978). The Economic History of Bengal: From Plassey to the Permanent
Settlement. Cambridge University Press.
References: 2. Bose, Sugata. (2003). Agrarian Bengal: Economy, Social Structure and Politics,
1919-1947. Cambridge University Press.
References: 3. Bayly, C. A. (1993). Empire and Information: Intelligence Gathering and Social
Communication in India, 1780-1870. Cambridge University Press.
References: 4. Majumdar, R.C. (1973). History of the Freedom Movement in India (Vol. 2).
Firma KLM Private Ltd.
References: 5. Sen, D. (1947). Permanent Settlement and Its Impact on Bengal Agriculture. The
Indian Economic & Social History Review, 9(2), 147-168.
References: 6. Roy, T. (2017). Agrarian Change in British India: Western Bengal, 1833-1935.
Routledge.
References: 7. Chakrabarti, B. (1983). Permanent Settlement and Changing Agrarian Structure in
Bengal: A Study of 24 Parganas. Economic and Political Weekly, 18(22), 952-956.