Chapter V: Lord Cornwallis and the Zemindari Settlement in Bengal (1785-1793)

CHAPTER V

LORD CORNWALLIS AND ZEMINDARI SETTLEMENT IN BENGAL (1785-1793)

PITT’S India Bill became law on the 13th August 1784. It placed the administration of the Company under the control of the Crown, and thus compelled some reforms. The Directors of the Company felt that they must put their house in order. They selected a nobleman of high character and broad sympathies to succeed Warren Hastings, and in their letter of the 12th April 1786 they gave the new Governor-General, Lord Cornwallis, full instructions for his guidance.

In this memorable letter the Directors expressed their disapprobation of the frequent changes in the revenue system of Bengal and their desire to pursue any one system under watchful superintendence. They condemned the endeavours which had been made to continually increase the land-tax, and to oust Zemindars in favour of farmers, Sazawals, and Amins, who had no permanent interest in the well-being of the cultivators. They expressed their opinion that the most likely means of avoiding defalcations would be to introduce a Permanent Settlement of the land revenue, estimated on reasonable principles, for the due payment of which the hereditary tenure of the possessor would be the best and the only necessary security. They directed that the settlement should be made in all practicable instances with the Zemindars, and they declared that “a moderate jumma or assessment, regularly and punctually collected, unites the consideration of our interests with the happiness of the natives and security of the landholders more rationally than any imperfect collection of any exaggerated jumma to be enforced with severity and vexation.”¹ And while they intended the settlement to be ultimately made permanent, they desired that the first settlement should be concluded for ten years only. The reader will perceive from this brief summary of the Directors’ letter of 1786 that the statesmanlike recommendations made by Philip Francis in 1776 had borne fruit in ten years. After a bitter experience of ten years—bitter in the miseries inflicted on the people of Bengal—the wisdom of the proposals of Philip Francis was vindicated, and the unwisdom of the harsh and varying schemes of Hastings was condemned.

The man who was chosen to give effect to the new scheme was worthy of his task. Without that minute knowledge of Indian affairs which Warren Hastings possessed, Lord Cornwallis was gifted with a real sympathy with the people over whom he was sent to rule. Not once or twice in the history of India has the administrator of strong and benevolent sympathies succeeded, where the administrator of larger local experience and narrower sympathies has failed. And hence the necessity which is felt to this day, as it was felt in the eighteenth century, of leavening Anglo-Indian administration by the wider statesmanship of Europe.

On his arrival in India, Lord Cornwallis found it impossible to conclude a ten years’ settlement without some further inquiry into the question of usages, tenures, and rents, and he vigorously prosecuted these inquiries. The Committee of Revenue had already changed its name to that of Board of Revenue, and its authority and functions were continued. The European civil servants were vested with the combined powers of collector, judge, and magistrate¹, and the administration of criminal justice still remained vested in the Deputy-Nawab of Bengal, to whose courts the European magistrates committed all serious cases for trial.

A great change in administration was effected in 1790. The Governor-General in Council accepted the superintendence of criminal justice throughout the provinces², The chief criminal court was removed from Murshedabad to Calcutta. Four courts of circuit, superintended respectively by two covenanted officers, conducted the trial of offences not triable by magistrates. Regulations in the civil, criminal, and revenue departments were revised and printed in the English and Indian languages.

Further administrative and judicial reforms were effected in 1793. A separation of the judicial and executive duties was effected. The Board of Revenue and the District Collectors were deprived of their judicial functions in revenue cases. The Collectors were also divested of their magisterial authority. A covenanted officer of higher official rank than the Collector was appointed Judge and Magistrate in each division, and this officer was entrusted with the superintendence of the police within his division. Four appellate courts were established at Calcutta, Patna, Dacca, and Murshedabad respectively³.

The war with Tipu Sultan of Mysore compelled Lord Cornwallis to undertake the operations personally. He forced his way to the capital of Mysore, and dictated terms of peace to the Sultan in 1792. The British obtained Calicut and Coorg in the west, as well as the district of Baramahal in the east, and it was in the revenue settlement of Baramahal, on which Thomas Munro was employed from 1792 to 1799, that he gained that experience and success which ultimately made him the most distinguished revenue officer in Madras.

In Bengal the revenue inquiries were proceeding rapidly to a conclusion. The famous Minute of Mr. Shore, afterwards Lord Teignmouth, dated 18th June 1789, “respecting the Permanent Settlement of the lands in the Bengal provinces,” laid the foundation of that settlement on which the East India Company and Lord Cornwallis were determined. It is impossible within our limits to give any summary of this able and exhaustive Minute, which, with its appendices and propositions, covers seventy closely printed folio pages of the celebrated fifth report,¹ but it is necessary to mention a few facts elicited by Mr. Shore’s exhaustive inquiry.

Mr. Shore refers to the revenue settlements made by Todar Mall in 1582 and by Jaffar Khan in 1722.

“If we suppose the assessment of Todar Mall to have been moderate in the first instance, the stated increase will not be deemed extravagant. Between the two periods of Todar Mall and Jaffar Khan the country had considerably improved in opulence, as new sources of trade had been opened, and commerce in general had become more diffused; specie, comparatively scarce in Akbar’s reign, was afterwards poured into the country through new channels. On the contrary, we invest [respect?], acknowledge, and applaud that political wisdom which prescribed limits to exaction, and allowed the subjects of the State to enjoy the profits of their own industry and good management.“²

Mr. Shore then refers to the subsequent enhancements made by Suja Khan, Alivardi Khan, and Mir Kasim; an appendix¹ furnishes us with the following figures for the land revenues of Bengal on different dates:

It will be seen that the amount of the land revenue was not much altered to the close of the Mahomedan rule, although sundry other taxes were imposed between 1722 and 1763.

Referring to the collections just before the commencement of British administration, Mr. Shore gives us the figures of four years (1762–1765). “The first year of this period belongs to Cossim Ali [Mir Kasim]; the second and third to Nundcomar under the authority of Mir Jaffer; and the fourth to Mahomed Reza Khan, being the first year of the Dewani.” ²

The peculiar economic feature of the British rule, as distinguished from the preceding Mahomedan rule, was the annual Economic Drain from the country which was introduced by the foreign rulers. This did not escape the observation of Mr. Shore.

“The Company are merchants as well as sovereigns of the country. In the former capacity they engross its trade, whilst in the latter they appropriate the revenues. The remittances to Europe of revenues are made in the commodities of the country which are purchased by them.”

“Whatever allowance we may make for the increased industry of the subjects of the State, owing to the enhanced demand for the produce of it (supposing the demand to be enhanced), there is reason to conclude that the benefits are more than counterbalanced by evils inseparable from the system of the remote foreign dominion.”

“Every information from the time of Bernier to the acquisition of the Dewani shows the internal trade of the country, as carried on between Bengal and the upper parts of Hindustan, the Gulf of Moro, the Persian Gulf, and the Malabar coast, to have been very considerable. Returns of specie and goods were made through these channels by that of the foreign European companies, and in gold dust for opium from the eastward.”

“But from the year 1765 the reverse has taken place. The Company’s trade produces no equivalent returns. Specie is rarely imported by the foreign companies, nor brought into Bengal from other parts of Hindustan in any considerable quantities.”

“Upon the whole, I have no hesitation in concluding that since the Company’s acquisition of the Dewani the current specie of the country has been greatly diminished in quantity, that the old channels of importation by which the drains were formerly replenished are now in a great measure closed, and that the necessity of supplying China, Madras, and Bombay with money, as well as the exportation of it by Europeans to England, will continue still further to exhaust the country of its silver.“¹

It will be seen that Mr. Shore specially dwells on the depletion of silver. Before the time of Adam Smith the precious metals were believed to represent the wealth of a country. But the real exhaustion, which he so forcibly describes, was the exhaustion of the wealth, the produce, the food of the people.

Discussing the three possible methods of land settlements in Bengal, viz., a settlement with Ryots, a settlement with farmers of the revenue, and a settlement with Zemindars, Mr. Shore proves conclusively that the last one was the only one consistent with good government and the improvement of the country.

“We have admitted the property in the soil to be vested in the Zemindars. . . . The mere admission of the right, unless followed by the measures that will give value to it, will operate but little towards the improvement of the country. The demands of a foreign dominion like ours ought certainly to be more moderate than the impositions of the native rulers; and to render the value of what we possess permanent, our demands ought to be fixed. Removed from the control of our own Government the distance of half the globe, every practicable restriction should be imposed upon the administration in India, without circumscribing the necessary power, and the property of the inhabitants be secured against the fluctuations of caprice or the license of unrestrained control.“¹

The State demand was fixed at nine-tenths of the actual rental, in the hope that Zemindars would succeed by the improvement of their estates to gradually increase the scanty one-tenth left to them.

“A proportion of nine-tenths of the zemindari receipts is surely as much as our Government ought to demand, if it means to regard the welfare of their subjects by zemindari receipts; I mean that proportion of the gross produce which comes to the Zemindar after deducting immediate profits and charges. I should hope that the profits of the Zemindar would in time exceed this proportion by a due attention to the improvements of their lands and the encouragement of their Ryots.“¹

Farther on, Mr. Shore describes clearly and forcibly what he understood to be the rights of the Zemindars of Bengal.

“I consider the Zemindars as the proprietors of the soil, to the property of which they succeed by right of inheritance, according to the laws of their own religion, and that the sovereign authority cannot justly exercise the power of depriving them of the succession, nor of altering it, when there are any legal heirs. The privilege of disposing of the land by sale or mortgage is derived from this fundamental right, and was exercised by the Zemindars before we acquired the Dewani.”

“Despotism could extend its claims to the subversion of the rights of the Zemindars without an avowed and direct infringement of them, but its practice, generally speaking, has been in favour of them. The Zemindars of Bengal were opulent and numerous in the reign of Akbar, and they existed when Jaffer Khan was appointed to the administration under him and his successors. Their respective territorial jurisdictions appeared to have been greatly augmented; and when the English acquired the Dewani, the principal Zemindars exhibited the appearance of opulence and dignity.“²

So far with regard to the Zemindars. With regard to the Ryots or cultivators, Mr. Shore is equally emphatic.

“In every district throughout Bengal, where the licence of exaction has not superseded all rule, the rents of the land are regulated by known rates called Nirik, and in some districts each village has its own. These rates are formed, with respect of the produce of the land, at so much per bigha [a third of an acre]; some soil produces two crops in a year of different species, some three; the more profitable articles, such as mulberry plant, betel-leaf, tobacco, sugarcane, and others, render the value of the land proportionably great.”

“Pattahs [leases] to the Khod-Khast Ryots, or those who cultivate the land of the village where they reside, are generally given without any limitation of period, and express that they are to hold the land paying the rents from year to year. Hence the right of occupancy originates.”

“Pykast Ryots, or those who cultivate the land of villages where they do not reside, hold their lands upon a more indefinite tenure. The Pattahs to them are generally granted with a limitation in point of time; where they deem the terms unfavourable, they repair to some other spot.”

Towards the conclusion of his Minute, Mr. Shore gives a summary of his proposals.

“The leading principles upon which I shall ground my propositions for the ensuing settlement are two.”

“The security of Government with respect to its revenues, and the security and protection of its subjects.”

“The former will be best established by concluding a Permanent Settlement with the Zemindars or proprietors of the soil, the land, their property, is the security of the Government.”

“The second must be ensured by carrying into practice, as far as possible, an acknowledged maximum of taxation. The tax which each individual is bound to pay ought to be certain, not arbitrary. The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor and every other person.”

“The settlement is then to be made for a period of ten years certain, but with a view to permanency.”¹

The above is a bare outline of the exhaustive Minute of Mr. Shore, in which he supported the proposal of a Permanent Settlement, first advocated by Philip Francis. In a second Minute, submitted in the same year, Mr. Shore, however, suggested the omission of the proposed notification to Zemindars that the settlement made for ten years would be eventually made permanent. Lord Cornwallis objected to this omission, which might indicate some uncertainty as to the policy of the Government; and some of the remarks recorded by his Lordship are so clear, so cogent, and so forcible, that it is impossible to omit them even in this brief narrative.

“Mr. Shore has most ably, and, in my opinion, most successfully, in his Minute delivered in June last, argued in favour of the rights of the Zemindars to the property of the soil. But if the value of permanency is now to be withdrawn from the settlement now in agitation, of what avail will the power of his arguments be to the Zemindars, for whose rights he has contended? . . .

“When the landlord of the soil himself, the rightful owner of the land, is only to become a farmer for a lease of ten years, and if he is then to be exposed to the demand of a new rent, which may perhaps be dictated by ignorance or rapacity, what hopes can there be—I will not say of improvement—but of preventing desolation? . . .

“I may safely assert that one-third of the Company’s territory in Hindustan is now a jungle inhabited only by wild beasts. Will a ten years’ lease induce any proprietor to clear away that jungle, and encourage the Ryots to come and cultivate his lands, when at the end of that lease he must either submit to be taxed ad libitum for their newly cultivated lands, or lose all hopes of deriving any benefit from his labour, for which perhaps by that time he will hardly be repaid?…

“I cannot avoid declaring my firmest conviction that if those provinces are let upon lease for that period only, they will find, at the end of it, a ruined and impoverished country.”¹

In a subsequent Minute, Lord Cornwallis again recorded his statesmanlike views.

“If laws are enacted which secure to them [Zemindars] the fruits of industry and economy, and at the same time leave them to experience the consequence of idleness and extravagance, they must either render themselves capable of transacting their own business, or their necessities will oblige them to dispose of their lands to others, who will cultivate and improve them. This I conceive to be the only effectual mode which this or any other Government could adopt, to render the proprietors of the lands economical landlords and prudent trustees of the public interest….

“Twenty years have been employed in collecting information. In 1769 Supervisors were appointed; in 1770 Provincial Councils were established; in 1772 a Committee of Circuit was deputed to make the settlement, armed with all the powers of the Presidency; in 1776 Amins were appointed to make a Hastbood [rent-roll] of the country; in 1781 the Provincial Councils of revenue were abolished, and Collectors were sent into the several districts, and the General Council and management of the revenues was lodged in a Committee of Revenue at Calcutta under the immediate inspection of Government. Like our predecessors, we set out with seeking for new information, and we have now been three years in collecting it.

Voluminous reports have been transmitted by the several Collectors on every point which was deemed of importance. . . .

“The consequences of the heavy drain of wealth from the above causes, with the addition of that which has been occasioned by the remittances of the private fortunes, have been for many years past, and are now, severely felt, by the diminution of the current specie, and by the languor which has thereby been thrown upon the cultivation and the general commerce of the country. . . .

“A very material alteration in the principles of our system of management has therefore become indispensably necessary, in order to restore this country to a state of prosperity, and to enable it to continue to be a solid support to the British interests and power in this part of the world. . . .

“We are, therefore, called upon to endeavour to remedy evils by which the public interests are essentially injured, and by granting perpetual leases of the lands at a fixed assessment we shall render our subjects the happiest people in India.“¹

In November 1791 an amended and complete Code of Regulations was promulgated by the Government for a settlement of ten years, and the settlement was concluded in every district in Bengal in 1793. The whole amount of land revenue² obtained from the provinces of Bengal, Behar, and Orissa for the year 1790-91 was Rs. 26,800,989 (£2,680,000). The amount was nearly double the assessment of Jaffer Khan and of Suja Khan in the early part of the century; it was three times the collections of Maharaja Nandkumar in the last year of the rule of Mir Jafar (1764-65); and it was nearly double the collections made by Mahomed Reza Khan, under British super-vision, in the first year of the Company’s Dewani (1765–66). The assessment was, therefore, as severe as it could possibly be made; and it was possible to raise it so high because it was declared to be final and permanent.

The Directors, in their letter of the 29th September 1792, expressed themselves in high terms of approbation of what had been done, and gave their assent to the settlement of the land revenue in perpetuity. On receipt of these orders, Lord Cornwallis issued a proclamation on the 22nd March 1793, announcing the permanency of the settlement which had just been concluded or was still in progress, The first three articles of the proclamation run thus:

Art. I. “In the original regulations for the decennial settlement of the public revenues of Bengal, Behar, and Orissa, passed for these provinces respectively on the 18th September 1789, the 25th November 1789, and the 10th February 1790, it was notified to the proprietors of land with or on behalf of whom a settlement might be concluded, that the jumma assessed upon the lands, under those regulations, would be continued after the expiration of the ten years, and remain unalterable for ever, provided such continuance should meet with the approbation of the Honourable Court of Directors for the affairs of the East India Company, and not otherwise.”

Art. II. “The Marquis Cornwallis, Knight of the Most Noble Order of the Garter, Governor General in Council, now notifies to all Zemindars, independent Talookdars, and other actual proprietors of land in the provinces of Bengal, Behar, and Orissa, that he has been empowered by the Honourable Court of Directors for the affairs of the East India Company to declare the jumma which has been or may be assessed upon their lands under the regulations above mentioned, fixed for ever.”

Art. III. “The Governor-General in Council accordingly declares to the Zemindars, independent Talookdars, and other actual proprietors of land, with or on behalf of whom a settlement has been concluded under the regulations above mentioned, that at the expiration of the term of the settlement no alteration will be made in the assessment which they have respectively engaged to pay, but that they and their heirs and lawful successors will be allowed to hold their estates at such assessment for ever.“1

Regulation I. of 1793, making the Permanent Settlement, was accordingly passed. It is the one act of the British nation within the century and a half of their rule in India which has most effectually safeguarded the economic welfare of the people. It is an act which is in consonance with the modern policy of civilised nations to permit the people to profit by their own industries, instead of paralyzing their industries by an uncertain and increasing State demand. Agriculture has largely extended in Bengal within the last hundred years, and the land-tax of Bengal, which was fixed in 1793 at 90 per cent. of the rental, now bears a proportion of about 28 per cent. to the rental of landlords; and new taxes amounting to 64 per cent. on the rental have been added for roads and public works.

Since 1793 there has never been a famine in permanently settled Bengal which has caused any serious loss of life. In other parts of India, where the land-tax is still uncertain and excessive, it takes away all motives for agricultural improvements and prevents saving, and famines have been attended with the deaths of hundreds of thousands, and sometimes of millions. If the prosperity and happiness of a nation be the criterion of wisdom and success, Lord Cornwallis’s Permanent Settlement of 1793 is the wisest and most successful measure which the British nation has ever adopted in India.

We cannot conclude this account of the Permanent Settlement of the land-tax in Bengal without comparing it with the settlement of the land-tax which was made in England five years after, i.e. in 1798. The property-tax of William III., originally intended to bear on personal property and offices, was subsequently described as the annual land-tax, when personal property slipped out of the assessment. Raised for the war of the Spanish Succession to four shillings in the pound of annual value, i.e. 20 per cent. of the rental, it was reduced to two shillings, i.e. 10 per cent. of the rental, after the Peace of Utrecht in 1713. And down to the close of the eighteenth century it varied between four shillings and one shilling in the pound, i.e. between 20 per cent. and 5 per cent. of the rental.

Five years after the Permanent Settlement of Bengal, the great Minister, William Pitt, made the land-tax perpetual in England in the various districts specified in the Act, and landlords were enabled by this Act to redeem the tax altogether by the payment of a lump sum. £1,300,000 of the tax has been redeemed up to date, and over £1,000,000 remains yet unredeemed. This last is now regarded as a fixed charge upon estates, subject to which they are bought and sold.¹

There may be some doubt as to the wisdom of Pitt’s Permanent Settlement of the land-tax in England; there can be no doubt as to that of Cornwallis’s Permanent Settlement in Bengal. In England the settlement benefited the landed classes only; in Bengal the settlement has benefited the whole agricultural community; the entire peasant population shares the benefit, and is more prosperous and resourceful on account of this measure. In England the settlement limited the tax on one out of the many sources of national income; in Bengal it has afforded a protection to agriculture which is virtually the only means of the nation’s subsistence. In England it precluded the State from drawing a larger land-tax to be spent in the country for the benefit of the nation; in Bengal it has precluded the State from increasing the annual Economic Drain of wealth out of the country. In England it saved the landlord class from added taxation; in Bengal it has saved the nation from fatal and disastrous famines.

Footnotes

¹ Select Committee’s Fifth Report, 1812, p. 13.

¹ Paragraph 264.

¹ Paragraph 355.

² Paragraphs 370 and 382.

¹ Lord Cornwallis’s Minute, dated 18th September 1789.

1 Fifth Report, 1812, p. 21.

¹ Stephen Dowell’s History of Taxation and Taxes in England, 1884, vol. iii, pp. 97–101.