Theory:

The Company changed the annual settlement of land revenue to the Permanent Settlement (decennial - 10 years) in \(1793\). It was believed that this would bring regular revenue to the Company and at the same time support the zamindars to spend in improving the land. Since the revenue was unchanged, the zamindars benefited from increased production from the land.
 
Lord Cornwallis introduced the permanent settlement to Bengal in 1793. It was later declared in Bihar, Orissa, Varanasi division of U.P., and Northern Karnataka, which covered about 19 % of the total area of British India.
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Lord Cornwallis as Governor-General (1786-93)
Salient Features:
  • According to the settlement, the kings and taluqdars were acknowledged as zamindars.
  • Zamindars collected rent from the peasants and paid revenue to the Company.
  • The value to be paid was fixed permanently, and it was not to be increased ever in future.
  • They gave \(10/11th \)of the collected revenue to the Government.
  • The Zamindars had the power to grant Patta (written agreements) to the ryots (farmers).
  • The ryots were considered as tenants as they were the tillers of the soil.
  • No judicial powers vested with the Zamindars.
Demerits of the Permanent Settlement
  • The Government had no direct contact with the cultivators.
  • Zamindars took control over the rights of the ryots, and they were almost treated as servants.
  • The permanent settlement made the Zamindars apathetic and rich.
  • Several conflicts between the zamindars and the peasants began in rural Bengal.
In many villages of Bengal, some of the dominant farmers did not cultivate, simply gave out their lands to others (the tenants), taking very high rents from them.