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Permanent Settlement

Explain how the Permanent Settlement initiated a rule of property in Bengal and What were its consequences?

The Permanent Settlement Act in essence changed everything, Lord Cornwallis introduced the act under directions from the then British PM, William Pitt, It was proposed in 1786 and implemented in 1793. Prior to Permanent Settlement, there was no question of ownership of the lands, the land naturally belonged to the ruler or the kingdom or it either belonged to the village.

Consequences of Permanent Settlement

The immediate consequences of the act are as follows

  • Zamindars from being revenue collectors became land owners. They can now rent, lease or sell the land to others. They enjoyed ownership rights as long as they paid the rent or their due share to the East India Company.
  • The peasants or laborers became landless tenants.
  • The company demanded a 10/11 portion of the collected rent from Zamindars and allowed them to retain 1/11. The Zamindars were supposed to collect 30% or close to this amount as rent as was prevalent in Medieval times. However, Zamindars did not adhere to this practice, and since there was no cap on rent collected from peasants by the Zamindars In many cases, forced the peasants into debt traps by levying exorbitant taxes. In some instances, the taxes on the peasants went up to 80% of the produce. The act failed in defining the relationship between the peasant or tenant and Zamindar.
  • The Permanent Settlement was created for the steady stream of income to the East India Company, creating a fraternity of Zamindars as friends of the white and providing income to the peasants, and improving the quality of agriculture.
  • The Company got the rent on time and in case the Zamindars didn’t pay on time, the ownership rights were taken away and auctioned to the highest bidder.
  • The system also created a phenomenon called Absentee Landlordism in which the Zamindars after becoming rich started living in the cities and hiring people to manage their estates which were far off in the process creating an intermediary. In some cases, the chain of intermediaries went up to 10 people. The burden of payment to all these people in the chain had to be borne by the peasants.
  • Another intermediary that became wealthy during this time was the moneylender. Since both the Zamindars and Peasants in times of drought and other emergencies or distress borrowed money from the moneylenders.
  • The most important of all the consequences was that now land became a traded commodity.
Permanent Settlement Act
Permanent Settlement Act


This question was asked in UPSC Civil Services History Paper 2 in the main examination in the year 2022. To download the paper visit the official website of UPSC.

Kanishka Singh Rathore

Engineer Financial Planner Editor

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