After their advent, the British principally adopted three types of land tenures. Roughly 19 per cent of the total area under the British rule, i.e., Bengal, Bihar, Banaras, division of the Northern Western Provinces and northern Karnatak, were brought under the Zamindari System or the Permanent Settlement. The second revenue system, called the Mahalwari Settlement, was introduced in about 30 per cent of the total area under British rule i.e., in major parts of the North Western Provinces, Central Provinces and the Punjab with some variations. The Ryotwari System covered about 51 per cent of the area under British rule comprising part of the Bombay and Madras Presidencies, Assam and certain other parts of British India.
Lord Cornwallis' most conspicuous administrative measure was the Permanent Land Revenue Settlement of Bengal, which was extended to the provinces of Bihar and Orissa. It is appropriate to recall that Warren Hastings introduced the annual lease system of auctioning the land to the highest bidder. It created chaos in the revenue administration.
Cornwallis at the time of his appointment was instructed by the Directors to find a satisfactory and permanent solution to the problems of the land revenue system in order to protect the interests of both the Company and the cultivators. It obliged the Governor-General to make a thorough enquiry into the usages, tenures and rents prevalent in Bengal. The whole problem occupied Lord Cornwallis for over three years and after a prolonged discussion with his colleagues like Sir John Shore and James Grant he decided to abolish the annual lease system and introduce a decennial (Ten years) settlement which was subsequently declared to be continuous. The main features of the Permanent Settlement were as follows:
The zamindars of Bengal were recognised as the owners of land as long as they paid the revenue to the East India Company regularly.
The amount of revenue that the zamindars had to pay to the Company was firmly fixed and would not be raised under any circumstances. In other words the Government of the East India Company got 89% leaving the rest to the zamindars.
The ryots became tenants since they were considered the tillers of the soil.
This settlement took away the administrative and judicial functions of the zamindars.
The Permanent Settlement of Cornwallis was bitterly criticised on the point that it was adopted with 'undue haste'. The flagrant defect of this arrangement was that no attempt was made ever either to survey the lands or to assess their value. The assessment was made roughly on the basis of accounts of previous collections and it was done in an irregular manner. 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 theof buildingrevenue aresystemtedwith the of benevolent land-lordism failed. Baden Powell remarks, 'The zamindars as a class did nothing for the tenants'. 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.
Nevertheless, this system proved to be a great boon to the zamindars and to the government of Bengal. It formed a regular income and stabilised the government of the Company. The zamindars prospered at the cost of the welfare of the tenants.
The Ryotwari settlement was introduced mainly in Madras, Berar, Bombay and Assam. Sir Thomas Munro introduced this system in the Madras Presidency. Under this settlement, the peasant was recognised as the proprietor of land. There was no intermediary like a Zamindar between the peasant and the government. So long as he paid the revenue in time, the peasant was not evicted from the land. Besides, the land revenue was fixed for a period from 20 to 40 years at a time. Every peasant was held personally responsible for direct payment of land revenue to the government. However, in the end, this system also failed. Under this settlement it was certainly not possible to collect revenue in a systematic manner. The revenue officials indulged in harsh mesuares for non payment or delayed payment.
In 1833, the Mahalwari settlement was introduced in the Punjab, the Central Provinces and parts of North Western Provinces. Under this system the basic unit of revenue settlement was the village or the Mahal. As the village lands belonged jointly to the village community, the responsibility of paying entire Mahal or the village community. So the entire land of the village was measured at the time of fixing the revenue.
Though the Mahalwari system eliminated middlemen between the government and the village community and brought about improvement in irrigation facility, yet its benefit was largely enjoyed by the government.