Book II, Chapter 4: Proposed Permanent Settlement for India

CHAPTER IV

PROPOSED PERMANENT SETTLEMENT FOR INDIA

THE famine of 1860 was the severest calamity that had visited the people of Northern India since the famine of 1837. It affected an area of 25,000 square miles, and a population of 13 millions. Delhi, Agra, Allahabad, and other towns suffered severely. The Government opened relief works for the able-bodied men and women who could work. Gratuitous relief was provided at the expense of the charitable public for those who could not work. The mortality was less than in 1837.

When the great calamity was at last over, Lord Canning appointed Colonel Baird Smith to inquire into its causes and its extent. No better man could have been selected. Baird Smith had distinguished himself as the Chief Engineer at the recapture of Delhi in 1857. But his fame rested chiefly on those great irrigation works in Northern India by which he had extended the limits of cultivation and added to the food of the people. He entered upon his new task with all his wonted energy and zeal. After an exhaustive inquiry into the condition of the famine-stricken tracts, he submitted three reports in May and August 1861. And he may be said to have discovered some facts which are true of all Indian famines.

In the first place, he clearly showed that the famine was due, not to want of food in the country, but to the difficulty of the starving people in obtaining the food. And in the second place, he also pointed out that the staying power of the people depended greatly on the land system under which they lived.

“No misapprehension can be greater than to suppose that the settlement of the public demand on the land is only lightly, or, as some say, not at all connected with the occurrence of famines. It lies, in reality, far nearer to the root of the matter, because of its intimate and vital relation to the every-day life of the people and to their growth towards prosperity or towards degradation, than any such accessories as canals, or roads, or the like, important though these unquestionably are. It is no doubt quite true that not the best settlement, which mortal intellect could devise, would cover the skies with clouds, or moisten the earth with rain, when the course of nature had established a drought. But given the drought and its consequences, the capacity of the people to resist their destructive influence is in direct proportion—I would almost say geometrical proportion—to the perfection of the settlement system under which they are living and growing.”¹

A careful and exhaustive comparison of the famines of 1837 and 1860 confirmed Colonel Baird Smith in this belief. The areas affected by the two famines were about the same; the population affected by the later famine was larger; and the other conditions were worse in 1860. Nevertheless, the sufferings and deaths in 1860 were far less than in 1837, because the land system introduced in Northern India, since 1833, was infinitely better than the previous system.

“Foremost, then, among the means whereby society in Northern India has been so strengthened as thus to resist, with far less suffering, far heavier pressure, from drought and famine in 1860-61 than in 1837-38, I place the creation, as it may almost literally be called, of a vast mass of readily convertible and easily transferable agricultural property, as the direct result of the limitation for long terms of the Government demand on the land, and the careful record of individual rights accompanying it which have been in full and active operation since the existing settlements were made.”²

Relying on the facts and figures he had collected, and on his careful inquiries into the state of Northern India as it was then and as it had been before, Colonel Baird Smith recommended a Permanent Settlement of the Land Revenue as a protection against the worst effects of future famines, and as a means of increasing the general revenue of the country with the general prosperity of the people.

“The good which has been done by partial action on sound principles is both a justification and an encouragement to further advances; and entertaining the most earnest conviction that State interests and popular interests will be alike strengthened in an increasing ratio by the step, the first, and, I believe, the most important remedial measure I have respectfully to submit for consideration, is the expediency of fixing for ever the public demand on the land.”

“It may be supposed that a great sacrifice of public revenue is involved in the concession of a perpetually fixed demand on the part of Government. It is to be observed, however, that, with a single exception to be noticed separately, the recent tendency of the measures of Government has shown a different conviction, and indicated a belief that its interests are best secured, not by general enhancement, but by general lightening of its demand on the land. . . . The land would enjoy the benefit of such accumulations, and as a necessary consequence of the increased prosperity of that class which must always be the very core of Native society, and with the strength of the weakness of which the social fabric generally must always have the acutest sympathy, trade and commerce and general wealth would not only increase, but as years passed on the community must grow stronger and stronger, and the risk of its collapsing under any such calamities as that we are now considering would gradually become less and less. Assuming, then, that the results of the measure would, in some degree at any rate, realise those anticipations, it seems unreasonable to suppose that an intelligent and powerful Government could fail to participate in them. Its intelligence would direct it to the least offensive and most effective means of sharing in the general prosperity; and its power would insure the fair trial and ultimate success of those means. There would be no real sacrifice, therefore, I believe, but, on the contrary, a marked increase of the public resources, from the creation of the increased private property to which, it is conceived, that a Perpetual Settlement of the public demand must lead.”³

Such was the first remedial measure suggested by Colonel Baird Smith, and he also urged the extension and completion of irrigation works and of roads and communications. Lord Canning sent Colonel Baird Smith’s Report to all the Provincial Governments for their careful consideration.

PUNJAB REPORT.

The Government of the Punjab was the only Government in Northern India which demurred to the immediate introduction of a Permanent Settlement, because the Province had been brought under British rule only twelve years before, and cultivation was still backward in many of the districts. The new Lieutenant-Governor said:—

“The Punjab is not half cultivated; there are immense waste tracts almost unpopulated; the communications are incomplete; and the resources generally but partially developed. Hence, even admitting that it were wise to abandon the prospective right of Government to a share of the increased rent in a Province which had attained to an average degree of agricultural advancement, it might still be prudent to maintain it in one which remained in a backward state.”

“On a view of the whole subject, as it affects the Punjab, the Lieutenant-Governor considers that, if it be prudent in a country like the Punjab, which is still in a backward state of cultivation, which cannot be said to pay its entire military expenses, and the civil institutions of which are not adapted to the most advanced state of society, to declare the Land Tax liable to no future increase, still the existing and prospective inequalities of distribution are so many and great as to render its perpetuation very inadvisable.”⁴

REPORT FROM THE NORTH-WEST PROVINCES.

Northern India has been under British rule for sixty years; and the opinion in favour of introducing a Permanent Settlement in the well-cultivated districts was strong and unanimous.

William Muir, then Senior Member of the Board of Revenue, and afterwards Lieutenant-Governor of the Province and Finance Minister of India, summed up the benefits of a Permanent Settlement under six heads.

(1) Saving of the expenditure of periodical settlements. (2) Deliverance of the people from the vexations of resettlements. (3) Freedom from depreciation of estates at the close of each temporary settlement. (4) Prosperity arising from increased incentive to improvement and expenditure of capital. (5) Greatly increased value of landed property. (6) Content and satisfaction among the people.⁵

And the junior Member of the Board of Revenue, R. Money, foresaw no financial loss to the Government from this measure.

“I am of opinion that no amount of direct land revenue which might possibly be hereafter assessed in excess of the demand which will be fixed at the approach-ing settlement, could bear any proportion to the increased sources of revenue which will, directly or indirectly, be gradually developed when the utmost possible simplification of the tenure of land shall have been affected and its stability assured.”⁶

Agreeing in these opinions, the Lieutenant-Governor of the North-Western Provinces recommended the conclusion of a Permanent Settlement in a long and carefully considered Minute.

“I do not in the least doubt that the gradual and cautious concessions of a guarantee of permanency to the settlement of the land revenue in the North-Western Provinces, generally, will be productive of all the advantages which Colonel Baird Smith and Mr. Muir, in even greater detail, have depicted. Judging by the effect of settlements for long periods, it may be safely anticipated that the limitation of the Government demand in perpetuity will, in much larger degree, lead to the investment of capital in the land. The wealth of the agricultural classes will be increased. The prosperity of the country and the strength of the community will be augmented. Land will command a much higher price. The prospective loss which the Government will incur by relinquishing its share of the profits, arising from extended cultivation and improved productiveness, will be partly, if not wholly, compensated by the indirect returns which would be derived from the increased wealth and prosperity of the country at large.

“Nor should the minor advantages of freeing the people from the vexation and exaction which are inseparable from a periodical settlement of the Land Revenue, of saving the large expenditure which each revision of settlement entails upon the Government, and of removing the temptation which the approach of each revision holds out to land proprietors of temporarily deteriorating their property, be disregarded. These are all burthens which bear, with more or less severity, on the Government and on the people, and if they can be got rid of without lasting detriment to the revenues of the state, few will be found to offer any opposition.

“It must also be admitted, I think, that the settlement of the Government demand in perpetuity will be politically wise. It is true that in Behar, and also in some of the districts of the Benares province, notably Ghazipur, which are permanently settled, the rebellion of 1857–58 was not less general or less determined than in other parts of these provinces which are under temporary settlement. But these manifestations of feeling must be regarded as having been the result of exciting causes, having but a transient influence, and can hardly detract from the force of the conviction that the absolute limitation of demand upon their land will be received by an agricultural people with the highest satisfaction, and will produce, if anything can, feelings of attachment to the Government, and of confidence in its desire to promote the best interests of the country.

“But it certainly appears to me that the introduction of a Permanent Settlement must be subject to certain conditions, exceptions, and reservations, and that some years must pass away before the measure can be consummated. Precipitancy in a matter of this vast importance is to be deprecated as pregnant with injury both to the Government and the people.”⁷

The “conditions, exceptions, and reservations” which the Lieutenant-Governor, G. F. Edmonstone, laid down, were, that a revision of the existing settlement should be made before it was declared permanent; that some wild or backward districts should be excepted for many years to come from this measure; and that “the rates of water rent should be raised in order to make some compensation to the Government for relinquishing prospective accessions to its land revenue on the recurrence of periodical settlements.”⁸

BENGAL REPORT.

The Lieutenant-Governor of Bengal, Cecil Beadon, had already expressed his opinion, as a Member of the Governor-General’s Council, in support of the proposed measure. As Lieutenant-Governor of Bengal he confirmed this opinion in a separate communication.

“Although, strictly speaking, the Board are right in saying that a settlement of the Land Revenue, as between the Government and the person admitted to settlement, is a mere matter of contract, and that legislation is not necessary to give validity to a permanent any more than to a transitory one, yet the Lieutenant-Governor has no doubt that the enunciation of a lasting principle, in reference to the settlement of the Land Revenue in several large divisions of the Lower Provinces of Bengal, to say nothing of the rest of India, would most fitly be confirmed as in 1793, by legislative enactment.”⁹

FINANCE MINISTER’S OPINION.

Sir Bartle Frere, then a Member of the Governor-General’s Council, supported the proposal. But the most significant support which Lord Canning received was from the Finance Member of his Council, Samuel Lang. With the extreme caution, natural and commendable in a financier, he declined to accept the assurance that the prospective loss in land revenue caused by a Permanent Settlement would be made good by increased revenues from other sources. But he gave his support to the proposed measure on higher considerations which cannot be better stated than in his own emphatic words.

“We do not exist as a Government merely to get the largest revenue we can out of the country, or even to keep the mass of the people in a state of uniform dead level, though it should be a tolerably happy and contented one, as a peasant tenantry under a paternal Government.

“If we give a Permanent Settlement, as Mr. Beadon proposes, we lay the foundation for a state of society, not perhaps so easily managed, but far more varied and richer in elements of civilisation and progress. We shall have gradations of society, from the Native noblemen of large territorial possessions down, through the country gentleman of landed estate, to the independent yeoman, the small peasant proprietor, the large tenant with skill and capital on a long lease, the small tenant on a lease, the tenant-at-will, and the day labourer.¹⁰

“In some districts one class will preponderate, in others a different one, and, on the whole, I do not doubt that, although there may be more hardships, inequalities, and collisions, there will be more life, activity, and progress, than there ever will be where the Government was all in all.

“If the Crown in England had kept the fee-simple of all lands forfeited by successive civil wars or seized from the Church, there might have been a revenue which would have gone far to carry on the Government without taxes, but would England ever have been the country it is?

“If we have any business at all in the East, it is to try and found something better than the old approved patterns of Oriental despotisms,¹¹ and to give India the chance at least, of becoming a great independent and intelligent community.

“Nor do I see any reason to fear the effect on revenue.

“It may be true that we shall not get so much revenue as if we had kept the increase of rent in our own hands, at any rate for the next twenty or thirty years, while it is almost certain to be rapidly increasing.

“But I have no fear of our being able to get revenue enough provided certain conditions are observed in regard to our land settlement; and I am by no means sure that it is desirable that a Government should appropriate a larger share of the income of a country, or get money more easily, than is really essential to meet the proper objects of a Government.”¹²

MINUTE OF SIR JOHN LAWRENCE.

These reports and others from the Central Provinces, Madras, and Bombay,¹³ came up before the Secretary of State for India. Sir Charles Wood gave a careful consideration to the question, as well as the cognate question of Redemption of the Land Tax which had also been occupying the attention of the Government for some years past. The question of Redemption fell through; but the question of a Permanent Settlement was calmly and ably discussed.

Sir John Lawrence, who was then a Member of the Secretary of State’s Council, was opposed to the policy of Redemption, but strongly supported the policy of a Permanent Settlement.

“I recommend a Permanent Settlement because I am persuaded that, however much the country has of late years improved, its resources will be still more rapidly developed by the limitation of the Government demand. Such a measure will still further encourage the investment of money in the land, and will give still greater security to the land revenue itself, which, in years of great calamity, occurring every now and then, has suffered largely, though the loss has been more or less of a temporary character. It is also very desirable that facilities should exist for the growth of the middle class in India connected with the land, without dispossessing the present yeoman and peasant proprietors. There are many men of much intelligence, spirit, and social influence among those classes, who are yet so poor that they find it difficult to maintain a decent appearance. It is no remedy for this state of things to confer great and exclusive benefits on a few individuals, especially when the very benefits are conferred at the expense of the rest of the community. What is really wanted is to give the intelligent, the thrifty, and the enterprising among them, the opportunity of improving their condition, by the exercise of such qualities; and this can best be done by limiting the public demand on the land. When such men acquire property, and are in a thriving state, they are almost certain to be well-affected to the Government, and will use their influence, which will generally be considerable, in its favour. Feelings of race and religion have great influence on the people of India, but love for their lands has still greater. Thousands, probably millions, of the people of Northern India, the most warlike of all its races, are descended from ancestors who gave up their religion to preserve their land. It is on the contentment of the agriculturists, who form the real physical power in the country, that the security of British rule, to a large extent, depends. If they are prosperous, the military force may be small, but not otherwise.”¹⁴

DESPATCH OF SIR CHARLES WOOD.

These sentiments and reasons were cordially endorsed by the Secretary of State for India in his memorable despatch of July 9, 1862, from which we make the following extracts:—

“Her Majesty’s Government entertain no doubt of the political advantages which would attend a Permanent Settlement. The security, and it may almost be said, the absolute creation of property in the soil, which will flow from limitation in perpetuity of the demands of the State on the owners of land, cannot fail to stimulate or confirm their sentiments of attachment and loyalty to the Government by whom so great a boon has been conceded, and on whose existence its permanency will depend.”

“It is also most desirable that facilities should be given for the gradual growth of a middle class connected with the land, without dispossessing the peasant proprietors and occupiers. It is believed that among the latter may be found many men of great intelligence, public spirit, and social influence, although individually in comparative poverty. To give to the intelligent, the thrifty, and the enterprising, the means of improving their condition, by opening to them the opportunity of exercising these qualities, can be best accomplished by limiting the public demands on their lands. When such men acquire property, and find themselves in a thriving condition, they are certain to be well affected towards the Government under which they live. It is on the contentment of the agricultural classes, who form the great bulk of the population, that the security of Government mainly depends. If they are prosperous, any casual outbreak on the part of other classes or bodies of men is not likely to become an element of danger, and the military force and its consequent expense may be regulated accordingly.”

“That this general improvement will be accelerated by a Permanent Settlement, her Majesty’s Government cannot entertain any doubt. A ready and popular mode of investment for the increasing wealth of the country will be provided by the creation of property in land, and all classes will benefit by the measure. On the agricultural population, the effect will be, as pointed out by Colonel Baird Smith in the able paper already referred to, the elevation of the social condition of the people, and their consequent ability, not only to meet successfully the pressure occasioned by seasons of distress, but in ordinary times to bear increased taxation in other forms without difficulty; the feeling of ownership, or in other words, the absolute certainty of the full enjoyment of the reward for all the labour and capital which they may invest in the land, will be sure to call out all their energies for its improvement. Her Majesty’s Government confidently expect that a people in a state of contentment and progressive improvement will be able without difficulty to contribute to the revenue in other ways to such an extent as more than to compensate for the disadvantage of foregoing some prospective increase of that from land.”

“After the most careful review of all these considerations, her Majesty’s Government are of opinion that the advantages which may reasonably be expected to accrue, not only to those immediately connected with the land, but to the community generally, are sufficiently great to justify them in incurring the risk of some prospective loss of land revenue in order to attain them, and that a settlement in perpetuity in all districts in which the conditions absolutely required as preliminary to such a measure are, or may hereafter be, fulfilled, is a measure dictated by sound policy, and calculated to accelerate the development of the resources of India, and to ensure, in the highest degree, the welfare and contentment of all classes of her Majesty’s subjects in that country.”

“They consider that the direct mode of making a Permanent Settlement is preferable to the indirect one of obtaining a similar result by conceding to the landholders the right to redeem their assessment. They do not believe that the power to redeem the land revenue is necessary to induce the landholders to incur expenditure in the improvement of their property. What is really required, in order to call into effective action their enterprise and capital, is not an exemption from all payments to the Government on account of their estates, but the fixing of those payments in perpetuity, at a moderate and certain amount. In Bengal, where a Permanent Settlement was made with the Zemindars seventy years ago, the general progress of the country in wealth and prosperity, notwithstanding the depressed condition of the peasantry caused by errors and omissions in the mode of making the settlement, has been most remarkable. Such errors in the existing state of our knowledge, regarding the rights and interests of the subordinate occupants of the soil, would not be permitted to recur.”

“Her Majesty’s Government have, therefore, determined to limit the power of redeeming the Land Revenue to such cases as are referred to above in paragraph 26, but they have resolved to sanction a Permanent Settlement of the Land Revenue throughout India. It will, however, still remain to be determined how far any particular district is in a condition to warrant the particular application of the measure at the present time.”¹⁵

SIR CHARLES WOOD AND EARL DE GREY.

When Sir John Lawrence went out to India as Viceroy, he took up the great land question with his accustomed promptness. And in March 1864, he recorded a Minute, stating in general terms the manner in which he proposed to introduce a Permanent Settlement in Northern India, Oudh, and the Punjab.

On March 24, 1865, the Secretary of State for India, Sir Charles Wood, wrote his reply. He divided Indian districts into three classes, viz.:—

(1) Districts where agriculture was backward; (2) Districts fairly cultivated and fully developed; and (3) Districts with estates fairly cultivated, and also estates imperfectly developed.

He decided that a Permanent Settlement should be introduced at once into the second class of districts, and refused in the first class districts. In regard to the third class of districts he stated that her Majesty’s Government “are prepared to authorise an immediate settlement on perpetuity, after revision, for all estates in which the actual cultivation amounts to 80 per cent, of the cultivable or Malgoozaree area.” Estates not so fully cultivated “should be treated in the ordinary manner, and settled for a term not exceeding thirty years.”

On August 3, 1865, the Viceroy in Council forwarded copy of correspondence with the Government of the North-West Provinces on the question of Permanent Settlement in relation to canal irrigation.

On March 17, 1866, the Secretary of State for India, Earl de Grey and Ripon, recorded his reply, approving of the instructions given by the Indian Government to the Lieutenant-Governor for the Permanent Settlement of the North-West Provinces, and suggesting the following rule with regard to canal irrigation:—

“A rule might be laid down that no Permanent Settlement should be concluded for any estate, the assets of which would, when canal irrigation shall have been carried to the full extent at present contemplated, exceed, in the opinion of the officers of the Settlement and Irrigation Departments, the existing assets in a proportion exceeding 20 per cent.”

SIR STAFFORD NORTHCOTE.

On March 23, 1867, the Secretary of State for India, Sir Stafford Northcote, reaffirmed the decision of her Majesty’s Government to introduce a Permanent Settlement. Her Majesty’s Government, he wrote, were prepared to sacrifice the prospect of an increase in land revenue “in consideration of the great importance of connecting the interests of the proprietors of the land with the stability of the British Government.” And he laid down two rules to restrict Permanent Settlement in undeveloped tracts and estates:—

“First.—No estate shall be permanently settled in which the actual cultivation amounts to less than 80 per cent. of the cultivable or Malgoozaree area; and

“Second.—No Permanent Settlement shall be concluded for any estate to which canal irrigation is, in the opinion of the Governor-General in Council, likely to be extended within the next twenty years, and the existing assets of which would thereby be increased in the proportion of 20 per cent.”

FINAL REJECTION OF THE PROPOSAL.

Inquiries went on with a view to ascertain what districts or parts of districts in Northern India could be permanently settled under the conditions laid down by Sir Stafford Northcote. In 1869 some cases were reported in which it was shown that a Permanent Settlement, even under the conditions laid down, would cause prospective loss to Government. This was not a new argument; for Sir Stafford Northcote had foreseen such loss, and had declared it to be the final and deliberate decision of her Majesty’s Government that “this sacrifice they were prepared to make in consideration of the great importance of connecting the interests of the proprietors of the land with the stability of the British Government.” But every passing year of peace weakened the desire to make the sacrifice; and the objection which had been foreseen and disregarded in 1867 seemed to have a greater weight in 1869. A third condition was accordingly recommended in addition to the two laid down in 1867; and this third condition practically amounted to this, that the Permanent Settlement should be deferred as long as the land continued to improve in value.

A difficulty was then presented by the depreciation of the rupee. This, too, had been foreseen by Sir Charles Wood; but the difficulty appeared more formidable to the authorities in the ‘seventies than it had appeared in the ‘sixties. And, for a time, the idea of a Permanent Settlement was dropped.

At last came the final decision. The Secretary of State for India in his despatch No. 24, dated March 28, 1883, gave the coup de grâce to the recommendation made by Lord Canning twenty-one years before. The despatch said, “I concur with your Excellency’s Government that the policy laid down in 1862 should now be formally abandoned.”

It will appear from the preceding narrative that the final rejection of the proposal of a Permanent Settlement of the land revenue of India was due, not to any new difficulties discovered in course of the inquiries made, but to a change in the spirit of the Government policy. The proposal was first dictated by a desire to improve the material condition of the people; “to encourage,” in the words of Lord Lawrence, “the investment of money in the land;” to promote “the gradual growth of a middle class in India;” to foster the accumulation of capital and of resources which would help the people in years of difficulties, droughts, and distress. These benevolent objects were lost sight of by a new generation of administrators. In the years succeeding the Sikh wars and the wars of the Indian Mutiny, her Majesty’s Government had desired to sacrifice a prospective rise in the land revenue “in consideration,” as Sir Stafford Northcote put it, “of the great importance of connecting the interests of the proprietors of the land with the stability of the British Government.” The years of peace which followed, and the loyal devotion of the people of India to her Majesty’s Government, weakened, instead of strengthening, this desire; and in 1883, after an uninterrupted peace in India of a quarter of a century, it was no longer considered necessary to make the sacrifice. Never has the loyalty of a nation been worse rewarded; never has the peacefulness of a people led more clearly to the withdrawal of a boon proposed in years of trouble and anxiety. It is a bad lesson for a Government to teach and for a people to learn.

Footnotes