Permanent Settlement

The Permanent Settlement, also known as the Permanent Settlement of Bengal (Bengali: Chirosthayi Bandobasto (চিরস্থায়ী বন্দোবস্ত)), was an agreement between the East India Company and Bengali landlords to fix revenues to be raised from land, with far-reaching consequences for both agricultural methods and productivity in the entire Empire and the political realities of the Indian countryside. It was concluded in 1793 by the Company administration headed by Charles, Earl Cornwallis, also known as Lord Cornwallis. It formed one part of a larger body of legislation enacted, known as the Cornwallis Code. The Cornwallis Code of 1793 divided the East India Company's service personnel into three branches: revenue, judicial, and commercial. Revenues were collected by Zamindars, native Indians who were treated as landowners. This division created an Indian landed class that supported British authority.

Permanent Settlement introduced first in Bengal and Bihar; and then to North district of Madras and district of Varanasi. The system eventually spread all over Northern India by a series of regulations dated 1 May 1793. These regulations remained in place until the Charter Act of 1833.

The other two systems prevalent in India were The Ryotwari System and The Mahalwari System.

Earlier zamindars in Bengal, Bihar and Odisha had been functionaries who held the right to collect revenue on behalf of the Mughal emperor and his representative, the diwan, in Bengal. The diwan supervised the zamindars to ensure they were neither lax nor overly stringent. When the East India Company was awarded the diwani or overlordship of Bengal by the empire following the Battle of Buxar in 1764, it found itself short of trained administrators, especially those familiar with local custom and law. As a result, landholders were unsupervised or reported to corrupt and indolent officials. The result was that revenues were extracted without regard for future income or local welfare.

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