Book II, Chapter 6: Land Settlements in Madras

CHAPTER VI

LAND SETTLEMENTS IN MADRAS

In a previous chapter we have described the Land Revenue administration of Madras during the last twenty years of the East India Company’s Rule. In 1855 the Government of Madras resolved on a survey and settlement of the Province. It was proposed to reduce the Land Tax so as to promote the extension of cultivation. And it was hoped that the Government Revenue would increase with the increase of cultivation.

VIEWS OF THE DIRECTORS.

The Directors of the East India Company, who had noted the happy results of the new settlements in Northern India and in Bombay, welcomed this proposal. And in 1856 they gave their formal sanction in a letter,¹ from which we make the following extracts:—

“With your letter, dated the 11th October (No. 44) 1855, you have submitted to us a Minute of Consultation, dated the 14th August 1855, showing the final result of the consideration which has been given, during the last ten years, to the question of a general survey and revision of assessments in the districts subordinate to your Presidency.”

“The urgent necessity of a survey, with a view to the reassessment of the Land Revenue in the greater portion of the districts under your Presidency is, we consider, established beyond the possibility of doubt.”

“The officers engaged in the duty of fixing the assessment should always bear in mind that as you have expressed it—’the right of the Government is not a rent which consists of all the surplus produce after paying the costs of cultivation and the profits of the agricultural stocks, but a land revenue only, which ought, if possible, to be so lightly assessed as to have a surplus or rent to the occupier, whether he, in fact, let the land to others or retain it in his own hands.'”

“We are therefore of opinion that the assessment should be proportioned to the nett, and not to the gross produce.”²

“The grain assessment having been determined, and converted into money at a fair and moderate rate, we should prefer that the assessment so fixed should be declared unalterable for a term of thirty years (as in Bombay and the North-West Provinces), at the expiration of which period both the amount of the grain assessment, and the rate of its conversion into money, would be subject to readjustment according to existing circumstances.”

“You are of opinion that they (the proposed measures) will be followed generally, but surely, by a great extension of cultivation, and you anticipate with confidence the result, ‘instead of a falling off, will be an accession to the revenue.’”

“We are disposed to concur in these expectations, and the probability of their realisation is borne out by the actual results of the revisions of assessment under the Presidency of Bombay, as well as by the effects of the introduction of reduced rates into the district of South Arcot.”

VIEWS OF SIR CHARLES WOOD.

The words which we have put in italics are important. They show that the East India Company did not claim the entire nett produce or rent of the soil, but only a portion of it as Land Revenue. They desired to have two-thirds of the nett produce as Land Revenue in Ryotwari tracts, as two-thirds of the rental had been claimed as Land Revenue in Northern India before 1855. In that year Lord Dalhousie’s Government reduced the Land Revenue to one-half the rental in Northern India. And nine years after, when the administration of India had passed from the Company to the Crown, Sir Charles Wood, Secretary of State for India, similarly fixed one-half the nett produce as the limit of Land Revenue in Southern India. We quote two passages from the important Despatch of 1864, which lays down this rule, and which has never been published.

“I am accordingly prepared to give my full support to the proposition of Sir William Denison, that the nett, and not the gross produce, should be adopted as the unit of which the Government is to take a fraction.”

“I have to communicate to your Excellency in Council my deliberate opinion that the share of the nett produce, which may be fairly taken as the due of Government, should be assumed at one-half, and not one-third, as proposed in Sir William Denison’s Minute.”³

From 1864, therefore, i.e. from the commencement of the Settlement which had been sanctioned in 1856, but which did not begin till several years after, the clear rule of assessment for the Madras Government was to fix the Government demand so as to leave one-half the nett produce of fields to the cultivators, and to claim the other half as Land Revenue.

PRINCIPLE OF PERMANENCY.

One other remark is suggested by the Directors’ letter of 1856. It entirely ignored the principle of permanency which underlay the Ryotwari System. Sir Thomas Munro, the real author of that system, had declared emphatically before the House of Commons that the principle of the Ryotwari System, as of the Zemindari System of Bengal, was the permanency of the State-demand. “With respect of permanency there is no difference between the two systems; but the Ryotwari leaves the Government an increasing revenue arising from the waste in proportion to its cultivation.”⁴ And, for more than forty years after Munro’s examination, the Madras Government, while claiming an impossible Land Revenue and varying the actual collection from year to year, had never questioned that a fixed and permanent demand was the principle of the Madras System. The Court of Directors, without referring in any part of their letter to this principle, simply ignored it by prescribing a revision of the assessment after every thirty years.

The principle, however, could not be thus tacitly ignored. After receipt of the Directors’ letter, the Madras Board of Revenue declared that the principle of a permanent assessment was still the principle of the Ryotwari System. “A general opinion prevails in England,” they wrote in 1857, “that the Bombay Settlement for thirty years secures a far greater permanency of tenure to the landholder than the present Ryotwari tenure of Madras. This is altogether an error, for a Madras Ryot is able to retain his land, perpetually without any increase of assessment, as long as he continues to fulfil his engagements.”

When, therefore, in 1861, the Madras Government was asked by Lord Canning to report on Colonel Baird Smith’s recommendation of a Permanent Settlement of the land revenues, the Madras Government naturally replied that the Madras system was a Permanent Settlement. The difference in opinion between the Governor and the Members of his Council was, whether the Land Tax would be a permanent grain rent, or a permanent money rent. The letter⁵ is so remarkable that it is necessary to give it in full.

PROPOSED PERMANENT SETTLEMENT.

“I am directed by the Honourable the Governor in Council to acknowledge receipt of your letter No. 2035, dated 7th October 1861, requesting his opinion ‘upon the advantages of a Permanent Settlement as applicable to the various districts of the Madras Presidency,’ and ‘as to the value of a legislative sanction for terms of years in districts in which his Excellency in Council may not consider the existing settlements of a character to be made permanent.’

“2. I am to premise that by a ‘Permanent Settlement’ this Government understand the Governor-General in Council to intend no more than fixing the Land Tax in perpetuity, in other words to bar the Government in all time to come from increasing the assessment on all land brought under the settlement.

“3. The words ‘Permanent Settlement’ are, however, very generally applied to Zemindari settlements under Regulation XXV. of 1802 of the Madras, and Regulation I. of 1793, of the Bengal Code. To any extension of this mode of tenure in this Presidency the Government are wholly opposed, for, among other reasons, the weighty objection, that it alienates from the State all waste land. It is to this source that this Government look for a gradual increase in its land revenue, and it is essential that this source of future revenue should not be lost to the State.

“4. This being understood, I am to explain briefly the present state of the land tenure in this Presidency under the prevailing Ryotwari system, to which alone the proposals contained in your letter are applicable.

“5. This mode of administration was introduced in 1792 by Colonel Read; and was subsequently worked out by Sir Thomas Munro. In 1812, the Home Government ordered it to be generally introduced, and it has since formed the prevalent tenure of this Presidency, the revenue derived from Zemindaries being in round numbers half a million sterling, while that drawn from Ryotwari estates is three and a half millions.

" 6. There can be no question that one fundamental principle of the Ryotwari system is that the Government demand on the land is fixed for ever.

" 7. When first settling the Salem district in 1796, Colonel Read issued a Proclamation to the Ryots, in which the following rule appears: ‘The Putkut Nellum (or holding) being measured and valued, the assessment of every individual field in it, when at full rate, is fixed for ever, that is to say, the Government is never to require more or receive less, nor you to pay less or more than the present rate, unless when those fields actually “dry” shall hereafter be converted into wet at the expense of Government, when the rates will be proportionately raised, according to the consequent increase of the produce, and in like manner fixed for ever. But if you carry on such works at your own expense, plant topes, &c., you may depend on receiving the advantages accruing from these and from every other improvement of your lands while you continue to pay the established rates, those constituting, except in the case above mentioned, the annual demand upon them on the part of the Sircar for ever. Upon these principles you may rent out lands, which you may raise in value by tillage and manure, at rates greatly exceeding the Sircar rates, if there be a demand for them, while you will continue to pay the fixed rates to the Sircar for ever.’

" 8. Similarly, in 1802, Sir Thomas Munro, when issuing instructions to the Collectors of the Ceded Districts, expressed himself as follows: ‘When a country has been surveyed, the individual (Ryotwari) supersedes both the village and district settlement. The rent of every field being fixed, each cultivator takes or rejects what he pleases, and the rents of all the fields occupied in the course of the year in any one village form what is called the settlement of that village.’ Again, in 1806, when explaining the manner in which a Ryotwari settlement was conducted, he says: ‘When a district has been surveyed, and the rent of every field permanently fixed, the Kulwar (individual) settlement becomes extremely simple; for all that is required is to ascertain what fields are occupied by each Ryot, and to enter them, in his Potta: their aggregate constitutes his rent for the year. He cannot be called upon for more: but he may obtain an abatement in case of poverty or extraordinary losses. He has the advantage of knowing in the beginning of the season, when he ploughs his land, the exact amount of what he is to pay; he knows the fixed rents of the different fields which he cultivates, and that the demand upon him cannot exceed their total amount; he knows the utmost limit of his rent, not only for the present, but for every succeeding year; for it cannot be raised unless he takes additional land; and he is thereby the better enabled to provide for the regular discharge of his Kists, and against the losses of bad by the profits of good seasons.’ In 1818 the Board of Revenue issued detailed instructions for the general introduction of Ryotwar as ordered by the Home Government. One of the distinguishing characteristics of the system, they said, was, ’that the assessment was a permanent maximum rent fixed on each field.’

“9. At a later period the permanency of the Ryotwari settlement has, on several occasions, been acknowledged in unmistakable terms.

“10. In the Madras Administration Report of 1855–56, Ryotwari is thus explained: ‘Under the Ryotwari system every registered holder of land is recognised as its proprietor, and pays direct to Government. He is at liberty to sub-let his property or to transfer it by gift, sale, or mortgage. He cannot be ejected by Government so long as he pays the fixed assessment and has the option annually of increasing or diminishing his holding, or of entirely abandoning it. In unfavourable seasons remissions of assessment are granted for entire or partial loss of produce. The assessment is fixed in money, and does not vary from year to year, except in cases where water is drawn from a Government source of irrigation to convert dry land into wet, or one into two crop land, where an extra rent is paid to Government for the water so appropriated; nor is any addition made to the assessment for improvements effected at a Ryot’s own expense. The Ryot, under this system, is virtually a proprietor on a simple and perfect title, and has all the benefits of a perpetual lease without its responsibilities, inasmuch as he can at any time throw up his lands, but cannot be ejected so long as he pays his dues: he receives assistance in difficult seasons, and is not responsible for the payment of his neighbours.’ A similar description of Ryotwari was given to the House of Commons by the Home Government in 1857.⁶

“11. The Revenue Board in 1857, in a report to Government on the new survey and settlement, wrote as follows: ‘It may not here be out of place to notice that a general opinion prevails in England that the Bombay Settlement for thirty years secures a far greater permanency of tenure to the landholder than the present Ryotwari tenure of Madras. This is altogether an error, for a Madras Ryot is able to retain his land in perpetuity, without any increase of assessment, as long as he continues to fulfil his engagements.’

“12. In the same year, the Government, in a review of the Hon. Mr. Rickett’s report, expressed themselves thus strongly: ‘The proprietary right of a Ryot is perfect, and as long as he pays the fixed assessment on his land he can be ousted by no one; there is no principle of Ryotwari management more fixed or better known than this, and the Government deny that any right can be more strong.’

“13. It is thus abundantly clear that the distinguished feature of Ryotwari is the limitation in perpetuity of the demand of the State from the land. The Ryots have thus all the advantages of the Zemindari tenure, while the State has a valuable reserve of waste land, whence, as cultivation extends, its resources will be augmented so as to meet the increasing demands on its finances which the progress of the country will entail; and in practice this leading principle of Ryotwari has never been infringed. The assessments have, as in South Arcot, Bellary, Cuddapah, &c., been reduced, but in no instance have they ever been raised; nor in the recent pressure for money has so obvious a source as increasing the land-tax been ever suggested as being open to the Government.

“14. Had matters been left in this position, the Government would now have had merely to report that the Ryotwari proprietors of this Presidency already possessed the advantages which the Governor-General in Council appears willing to concede, although these were not secured to them under legislative sanction.

“15. But in 1855, when the survey and settlement now in progress were introduced, an important modification was made in the tenure of the land.

“16. The object of this operation was to revise the assessments, which were generally too high. In order to give the Ryot in all cases a valuable proprietary interest in the soil, and to induce extended cultivation, 30 per cent. of the gross produce, carefully computed in the manner prescribed, was to be ’taken as the maximum of the Government demand,’ and it was thought that 25 per cent. would be the average. The Government were of opinion that the assessment should be fixed in grain for a term of fifty years, and that the commuted value of the latter should be periodically adjusted every seven or ten years, according to its average money value in those periods. The Home Government objected to this arrangement, and gave the preference to an assessment in money, unalterable for thirty years. The subject was further discussed by the Government, who ultimately decided that the assessment should be revised after fifty years, if then deemed expedient. This decision, however, has not as yet been authoritatively intimated to the people.

“17. It will thus be seen that, while the leading characteristic of Ryotwari tenure is the permanency of the assessment, the revised assessments now being introduced are subject to revision after fifty years.

“18. The alternatives proposed in your letter under reply have received the careful consideration of Government, and I am to state briefly the conclusions at which they have arrived.

“19. His Excellency the Governor is favourable to the imposition of a permanent grain rent, but would reserve to Government the power of periodically determining the money value of that rent, if at any future time a material alteration in the value of money should render such a measure expedient.

“20. The Honourable Members of Council, on the other hand, support the old Ryotwari principle of a permanent money assessment, that is to say, an assessment based on a certain portion of the crop, and converted into a money payment at a fair commutation rate fixed once and for ever.

“21. I am to request attention to the minutes which accompany this letter, and contain the views of the President and Members of the Council.

“22. The Government are not in favour of settlements under legislative sanction for terms of years. Such settlements would hamper the Government without materially improving the position of the Ryot; and it would be better, both for the State and the people, either that the settlements should be in perpetuity, or that the Government should have the power at any time of acting as the exigencies of the State may require. The Government would not alter the assessment except under the pressure of necessity, and that necessity might occur in the course of the series of years fixed by law for the unalterable duration of the Settlement.”

THE NEW SETTLEMENT.

While the principle of permanency in the Government demand was admitted in this letter, it was abandoned in practice. Settlements were made for thirty years, and at the expiry of the term the Land Revenue payable by each cultivator was liable to enhancement. And no specific and definite grounds for the enhancement of the State-demand were laid down, corresponding to the grounds laid down by law in 1859 and 1868, for the enhancement of rents by private landlords in Bengal.

The fiscal results of the new operations during fifteen years, from 1861 to 1875, are shown in the table on the opposite page.⁷

Land Revenue in Madras, Excluding Malabar and South Canara.

It will appear from these figures that the area under cultivation, as well as the Gross State-demand on the land, increased about 20 per cent. in fifteen years. But these figures do not indicate correctly the pressure of the Land Tax. In the first place, the new lands brought under cultivation were poorer in fertility and produce than the lands which were already under the plough in 1860, and the increase in production therefore was not 20 per cent., and scarcely came to half of that. In the second place, the price of the produce was lower at the end of the fifteen years than at its commencement, and what the cultivators actually got by the sale of their produce was therefore less for each garce¹⁰ than it was before. No wonder, therefore, that remissions had to be made from the Government demand at the end of the period to the same extent as at the beginning. The Survey and Settlement of Madras, therefore, from which so much benefit had been expected, scarcely gave the relief that was needed. Some good was no doubt done. In the first place, the Land Tax was in a great measure equalised. In the second place, settlements for thirty years gave the cultivators relief from annual inquiries, harassment, and trouble. But judging the State-demand in relation to the total produce of the Province, and to the prices of that produce, it was undoubtedly a heavier taxation on the people in 1875 than it was in 1860. And the terrible Madras famine of 1877 proved fatally how little the new Settlement had added to the security and the staying power of the cultivators.

Better results might have been secured if the rule of 1864 of limiting the State-demand to one-half the nett produce of fields had been scrupulously adhered to. But in making settlements over large districts with 150,000 holdings, summary and expeditious methods were necessarily adopted. Individual cultivators were never allowed a chance of proving what total produce they obtained from their fields, what the expenses of their cultivation were, and what nett income remained to them. It was often assumed, in a general way, that one-third of the total produce should cover the cost of cultivation. It was assumed that 28s. covered the cost of cultivating an acre of good land, and 12s. was all that was allowed for cultivating an acre of ordinary arenaceous sandy soil. Every cultivator in Madras knew, and Englishmen with any experience of the Province knew, that this was inadequate.¹¹

It was on such inaccurate calculations, made collectively for vast areas of the country, that the Government assessment was based. It was then proclaimed to the puzzled cultivator, who often found that the assessment really swept away the greater portion of the nett income from his field. But he had no right of appeal to any independent tribunal; he must either pay the assessed tax or quit his ancestral field.

But it was not the Madras cultivator alone who was puzzled. The successors of Sir Charles Wood, who had laid down the clear rule of 1864, were no less puzzled by the method in which it was ignored in practice. Lord Hobart, Governor of Madras, proposed in 1874 to close the settlement operations altogether, and to revert to a simpler method. And Sir Louis Mallet, Under Secretary of State for India, recorded two long and suggestive minutes exposing the absolute want of any guiding principle in the Madras operations. We will quote one significant passage from the first of these minutes.¹²

SIR LOUIS MALLET’S MINUTE.

“In a return to the House of Commons in 1857 on Indian Land Tenures, signed by Mr. John S. Mill, I find the following general statement: ‘Land throughout India is generally private property subject to the payment of revenue, the mode and system of assessment differing materially in various parts.’

“On the occasion to which I have already referred, viz., the correspondence with Madras in 1856, the Court of Directors emphatically repudiated the doctrine of State proprietorship, and affirmed the principle that the assessment was revenue and not rent; the revenue being levied upon rent, as the most convenient and customary way of raising the necessary taxation, which in a self-contained country, possessed of vast undeveloped agricultural resources, is perhaps the soundest, simplest, and justest of all fiscal systems.

“Sir C. Wood, in 1864, reaffirmed this principle, but went beyond the Court by fixing the rate of assessment at 50 per cent. of the nett produce, fully recognising, however, that this was merely a general rule, and that in practice the greatest possible latitude must be given.

“The principle thus established appears to rest, then, upon a solid, scientific ground; but launched, as it necessarily was, in language and under circumstances which really almost reduced it to an abstract proposition, (for the application of the principle was entirely left to the judgment of the Settlement Officers, and the tasks given them altogether beyond the power of any human beings to discharge, except in the roughest manner), one cannot wonder that the whole administration has drifted into the chaos in which these papers show it now to be.

“One is tempted to ask if rent—economic rent, pure and simple—is alone to be taxed; why, instead of the costly, cumbrous, capricious, and when all is said, most ineffectual settlement system, we cannot leave the assessments to take care of themselves, and take whatever percentage on the rental of the land we want, wherever we find it. I can only suppose that the answer would be, that in truth the 50 per cent. of the nett produce has been a mere paper instruction, a fiction which has had very little to do with the actual facts of the administration, and that in practice the rates levied have often absorbed the whole rental, and not infrequently, I suspect, encroached on profits also.”

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