Answer: The Permanent Settlement was a land revenue system introduced by Lord Cornwallis in 1793 in Bengal, Bihar and Orissa. Under this system, the company’s share in the revenue was fixed permanently with the Zamindars who were made hereditary owners of the lands under their possession. Reasons behind introduction of the Permanent Settlement System:

• To develop a class of landlords who were loyal to British interests.
• It was hoped that the system would end corruption as the officials would not be able to alter assessment at will.
• It was meant to ensure ease in administration on part of the Company as the burden of revenue collection was given to the intermediaries or Zamindars.
• To ensure a fixed and stable income for the company and save the government from the expenses on making periodical assessments and settlements.
• It was expected that property ownership would induce Zamindars to make larger capital investments in agriculture. Cornwallis thought that the company could increase its revenue by taxing trade and commerce.

However, the introduction of the permanent settlement system had far-reaching consequences:

• Exploitation of peasants: Peasants suffered from the double injustice of surrendering their property rights and being left entirely at the mercy of Zamindars who extracted exorbitant taxes, much higher than the official tax rate.
• Decline in agricultural productivity: Zamindars had their focus on collection of maximum revenue and took little interest in the development of agriculture.
• Rise in absentee landlordism: Under it, new moneyed men from Calcutta with no local connections bought lands when Zamindars struggled to meet revenue obligations. The new landlords were often absentees from their lands, and generated resentment among the farmers.
• Increase in social inequality: This system strengthened feudalism in upper sections and slavery in lower sections of society. Absentee landlordism drained out the wealth produced in the countryside to the urban centres, leaving the peasants in miserable condition.
• Commercialization of agriculture: It led to commercialisation of land that previously did not exist in Bengal coercing the local agriculturalists to cultivate cash crops such as cotton, indigo, and jute.

Permanent settlement did more harm than good to Indian agriculture. It led to impoverishment of the peasantry and rural indebtedness and eventually became one of the contributing factors of agricultural crises including famines in and around Bengal.