CHANGE IN LAND REVENUE SYSTEMS AND ITS EFFECTS ON LAND MARKETS

IN COLONIAL INDA

Garima Nadar

INTRODUCTION

India is a country where agriculture has always been the main source of livelihood for a major
chunk of the population. The diverse climate, abundant land and huge supply of agricultural
labor (farmers) make this country able to produce sufficient not just for the consumption of its
population but also to export to other nations in huge quantities. However, the miserable
condition of the farmers even in the twenty first century makes one question the efficiency and
effectiveness of the measures taken to ensure that they also lead a decent livelihood. The
government has been trying to solve the issues and tackle the problems relating to farmers well
being using various plans, policies land reforms etc. Such efforts were also made during the
colonial period. The main motive of the rulers then was not farmers well being but a steady and
increasing supply of the land revenue that they could use for their own nations welfare. The
present paper tries to look deeper into the issue of land settlement systems during the colonial
period. We try to seek answers to some questions such as: what were the policies that the British
government took to address the agrarian problems of the country? What was the real motive
behind their interest in the agricultural development of India? Was their interference beneficial at
any point for the farmers too? In other words, did the British rulers contribute something towards
improvement of the farmers conditions and agricultural development? The main question that
the paper addresses is that of land settlements, that is, what were the different forms of land
settlements that were introduced during the colonial period? How effective were they in dealing
with the agrarian problems of those times and how did those land settlement systems affect the
land market of Indian subcontinent? The paper includes the analysis of the steps taken by the
British government to address the agricultural issues of the Indian economy during the colonial
period. The paper carries out a detailed analysis of land settlements in some of the major
provinces of India including Bengal, Northern India and Madras that would help us answer the
questions raised above.

LAND SETTLEMENTS BENGAL

With the advent of the British rule in India roughly in 1757-1771, the East India Company took
over Bengal as an administrator. Clive won Bengal in the Battle of Plassey in 1757. Right after
this, the companys servants took charge of governance of all the provinces as well as all the land
belonging to the provinces. In order to earn as much land revenue as possible for themselves and
to ensure steady and maximum possible flow of it, many new land settlement systems were
introduced in India since then. The revenues were used by the companys servants for covering
all their expenditures.

The East India Companys administration over India was granted a parliamentary status by the
Regulation Act of 1773. Lord Clive made sure that a legal status be granted to the East India
Company. Following which, every position holder of the company got the post of governor
general in different provinces of the country. The Nawabs were already the rulers of the
provinces who were collecting revenue from the peoples lands for carrying out their
administration in the country. The companys position holders joined the administration as
governor generals who also demanded land revenue from the people. The farmers were now
paying almost double the revenues that they paid initially. The hardships for the then farmers
were therefore augmented. The British, as it comes out were never really interested in raising the
welfare o the country or in sincere administration of any province including Bengal. All they
cared for was the good source of profit that a province like Bengal could turn out to be for them.
The reason that we discus Bengal in the beginning and so much in detail here is that this was the
very first province that the East India Company took charge of. The company had such an
influence over the rulers that it made the acting ones act like mere puppets of it and used these
rulers in order to fetch as much revenue as possible from the farmers.

Initially, the landlords, also called the zamindars had the customary rights to the lands and held
all of them. The Ryots were the hereditary owners of those very lands. The ryots used to pay the
zamindars some customary rents out of which a proportion was paid to the state by the
zamindars. The land in reality was the property of the states who received rents from the
cultivators. The cultivators or the farmers were allowed by the state to use the land for
cultivation and hence used to pay the rent o it.

The new settlement of the 1760s:

By 1769, the rulers as well as supervisors both were receiving revenue from these farmers.
Burdwan and Midnapur became the first places where the new land settlement was introduced.
Warren Hastings in 1772 took under him, Bengal along with four more members of the
committee. In order to ensure that the company earns higher land revenue, he took away the
rights of hereditary Zamindars and auctioned those very lands to the cooperatives. This was done
in 1776. The revenues were also increased for the same reason. This brought hardships and
sufferings for the farmers. The table below provides some statistical details of the amount of
revenue and disbursements for eight years:

Source: DUTT, R. C. (1950). The economic history of India under early British rule, from the
rise of the British power in 1757 to the accession of Queen Victoria in 1837. London, Routledge
& K. Paul.
The destruction of the industries pushed even more people into agriculture. These manufacturers
were no longer allowed to produce silk clothes. The farmers were now being forced to grow
silk. A fixed fraction of the revenue from these lands was used by the companys servants to pay
for the huge imports from Britain.

Permanent settlement in Bengal:

In the famine of 1769, one-third of the population is believed to have perished. This famine was
a result of the rigorous and ever increasing revenue collection, absence of monsoon and absence
of a sincere effort by the then government towards peoples miseries. Philip Francis then made
permanent settlements in Bengal so as to make situations a little better and also to raise the
prosperity of the people. Zamindars were finally given their lands back only for a year after the
end of a five-year settlement. The big zamindars lands were given to speculators and
moneylenders again and this led to failure of revenue one more time. Even though the revenue
rose by a little fraction, it could not do anything to improve the farmers conditions as all of it
was being drained out of the country into the British economy.

There was one more famine in 1784. The main reason was again a lack of monsoon and over
assessment of the revenue that left the farmers with merely nothing out of their own produce.
People tried to flee and escape the place since it was becoming impossible for them o survive in
such conditions. Things became even worse for them when they were not allowed to go
anywhere and those who got caught while trying to run away were being executed mercilessly. A
sort of a rebellion had taken place. The conditions were so much bad that people were being
forced to sell their kids in order to clear their debts. Mr. Shore thought that it would be best to
work the settlement out with the zamindars as a best option. The work for which began in 1789.
By early 1790s, the amendment was complete. The settlement, as was decided was now a ten
years settlement. 1783 is the year when the permanent settlement act was passed in Bengal
following the orders of Lord Cornwallis. This act has proved to be the most successful measure
taken by British ever in India. This increased welfare of the people along with raising the
revenue of the British government. The contribution of Cornwallis in the form enforcement of
this land settlement system is appreciated to this day.

The Bengal rent act of 1859:

Lord Canning in 1859 introduced the Bengal Rent Act in order to overcome the issues of
protecting the cultivators and finding a proper basis of legislation. This was following the
shortcomings of the permanent settlement system including still a very high rate of land revenue.
The division of the settled cultivators into three classes was done. The people who had held and
since 1793 would have to pay unaltered rent. The other two classes of landlords, the one that
held land for twenty years and those that held them for twelve years had to pay unaltered rent
unless any new provision or rule came up. This created a revolution in Bengal. Farmers were
more resourceful and prosperous there anywhere else in India owing to, first a control on state
demand from landlords in 1793 and then a control on landlords demand for rent. A similar act,
The Tenancy Act of 1885 also gave the needed protection to cultivators by expanding their
occupancy rights.

LAND SETTLEMENTS - NORTHERN INDIA

North India in the colonial period consisted of Oudh, Allahabad, Delhi, Agra, and Benares
among others. After Lord Wellesley acquired the ceded districts and took charge of
administration, his brother Henry Wellesley made five year land settlements with zamindars and
farmers in the year 1803. Soon there was a war with Mahrattas in the year 1803 following which
the northern region was hit by famine. In the year 1807, it was decided to fix the Jumma forever.
Between 1807 and 1818, the ceded provinces and the conquered provinces experienced a steady
rise in the land revenue. The following figures show the changes in the revenue in both the ceded
and the conquered provinces:

Source: DUTT, R. C. (1950). The economic history of India under early British rule, from the
rise of the British power in 1757 to the accession of Queen Victoria in 1837. London, Routledge
& K. Paul

Lord Hastings appeal for a permanent settlement either determinable by a fixed jumma or an
assessment determinable by a fixed and invariable rate was refused by the court of directors.

The Mahalwari settlement:

The intention of the rulers was to make settlement with Zamindars in places where they were
present and with communities of village in their places of their existence. For the purpose of
settlement of land revenue in ceded and conquered provinces, Regulation VII of 1822 was
introduced. The Mahalwari settlement from village to village was carried out by Lord Minto and
Lord Hastings. The first comprehensive lands act of the North India had in it a few provisions.
They have been mentioned below:

1. No upsurge in the revenue demands from the landlords until and unless profits augmented to
more than one-fifth of the revenue demand.
2. Conditional leaves to the cultivators by the revenue collectors
3. The 95% upsurge in demand for rent in places where land was under common tenancy.
4. Revenue collector would be responsible for solving problems between tenants and landlords.
This new system swept all the rents away from the cultivators and the landlords and left them
impoverished. Lord William Bentinck broke the settlement in 1833 for a new one. Till 1822,
there was no progress in the economy. Moreover, there was a system failure. The rent collected
then was 80% of the total produce. Bentinck suggested a reduction in it. By 1831, he had come
up with two suggestions: 1. Long leases: For raising incentive for improvement among the
tenants and landlords. 2. Modest revenues: To put down with them assured share of profits from
the soil. He passed the Regulation act of 1833 which came to be known as true basis of the land
settlement in North India. The estimates of rents and produces were simplified. A system of
average rent for different classes of soil was introduced. The rent was reduced to two-thirds of
the total. These changes were made for 30 years. Lord Martins Bird gave directions to these
operations. Even though bird levied 66% of the land tax, the village communities assessed them
by guess work. There was so much uncertainty to agriculturalists due to this that it left no chance
of prosperity or wealth accumulation for the farmers. Though the high rents were not there
anymore but too much interference with the landlords and village communities was still there.

Birds settlement plan was completed in 1849 by James Thomson. He completed the first land
settlement code in 1844. The settlement work completed in 1849 was very much appreciated and
applauded by the court of directors. It was realized after 1851, after the directors had signed the
dispatch that the revenue demanded from the farmers was still very high and left them resource
less. This rule of Thomson, that land tax would be 66% of the produce prevented the land from
becoming invaluable property His rules were revised and new ones were devised in 1855. The
new rules were in association with re-settlement of the Saharanpur district came to be known as
the Saharanpur rules. Rule XXXVI of the Saharanpur rules that states reduction of the land tax
from 66% to 50 % has been the most considerable one. This rule has become the foundation of
land assessments in India in the present times as well. The British Government decided that the
rental would remain one-half of the total yields. This constraint of one-half revenue was
eventually extended to all parts of the Indian economy including Central Provinces of India, and
to Oudh and the Punjab where the Land Revenue was not permanently settled.

The land Revenue Act of 1873 in North-western provinces:

Under the administration of Lord Northbrook, this involved repealing and revising of the older
regulation acts. The methods of survey and the rental thus collected were changed. The famine of
1860 was the most severe calamity that hit the people of North India. Colonel Baird Smith was
brought in by Lord Canning to look into the matters and provide people with some relief. He
found out two main facts about Indian famines: the first one being that people who were starving
could not obtain the food and also the staying power that depended greatly on the land system
under which they lived. Since all his claims were true, Colonel Baird Smith recommended
permanent settlement of land revenue in North India. According to him, this would raise the land
revenue and also would do away with the worst effects of famine in the future. He also suggested
increasing of the irrigation facilities and improvement of roads and railways. However, some
reports in 1869 claimed that this kind of land settlement system would cause losses to the
government even after all the conditions had been fulfilled. In the same year, it was decided that
permanent settlement should be postponed as long as the land continued to improve in value.
There was a change in the spirit of the Government policy. The permanent settlement was first
dictated by a desire to improve the material condition of the people and to help people in the
years of distress as put by Lord Lawrence. These benevolent objects were lost sight of by a new
generation of administrators. As R.C. Dutt puts it 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 for 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. By 1887, it was made
clear that rather than just a guess, the actual rental would be used in order to collect the
revenues. One-half of the actual rentals were supposed to be levied on the people. Sadly, this
rule was not followed strictly even after 1890 (DUTT, R. C. Vol. II. From the Accession of
Queen Victoria in 1837 to the Commencement of the Twentieth Century)

LAND SETTLEMENT MADRAS:

1763 marked the end of peace of Paris: the war between the British and the French. Mohammad
Ali, a very incompetent ruler of Karnatic did not fight to retain the rights of the land. He himself
allotted lands to his British creditors and eventually lost all the rights to his land. The company
had its influence over the land; they took the produce from the fields and sent it to England.
People had to pay both, the nawab and the company, both of which were strict and harsh. After
Pitts India Bill act was passed in 1784, the first land settlement in the Northern Circars took
place. Under this, the zamindars had to pay fixed land revenue to the government. The creditors
of nawab got all votes in their favor and thus became the masters of court. 1785 saw a
widespread and terrible famine which was the result of the wars, unrest, lack of monsoon and
bad governance by weak rulers. The table below gives an idea of the revenues collected from the
then farmers of Madras:

Source: DUTT, R. C. (1950). The economic history of India under early British rule, from the
rise of the British power in 1757 to the accession of Queen Victoria in 1837. London, Routledge
& K. Paul

Till 1778, lands were annually settled with zamindars. Three to five years settlement were
proposed by Thomas Rumbold who was later arrested on charges of corruption.
The permanent settlement was introduced in Northern Circars from 1802-1805. The cultivators
were asked to pay two-thirds of the gross collection from cultivation. Thomas Munro in the year
1798 introduced the famous Ryotwari settlement in the newly acquired Baramahal districts. The
revenue was collected directly from the cultivators. There was huge rise in the revenue. Not only
this, but the farmers were also very content with the settlement. This settlement was as good as
that of Cornwallis in Bengal. Tajnore and Malabar also saw the introduction of Ryotwari
settlement in their places while the old systems were done away with. The revenue would
fluctuate according to the fluctuation in the land produce according to Munro. There was one
more system introduced by Madras Board of Revenues known as Mauzwari settlement. This
included settlement with each village community. The ryotwari settlement still was very
oppressive due to the fact that the state demanded around one-half of the produce. Munro
proposed in 1807 that the demand be reduced to one-third of the produce. Ryotwari settlement
was finally introduced in 1820 by Thomas Munro and Captain Read.

The oppression was still there despite the revenue being low. The revenue collectors and
supervisors were paid low which compelled them to indulge in harsh and corrupt behavior.
Munros passing away led to worsening of the situations. Oppression, poverty, famines, misery
of the people continued for the next thirty years. The use of torture in order to realize the
revenues was a very common sight in the province. A commission was formed to look into the
matter but even it could not do much to help the people. They focused more on being careful to
cast no accusation on any of the European officers. The government did nothing to improve the
system. The system turned out to be nothing like the one that Munro had anticipated. The system
was fully exposed during a parliamentary enquiry in 1852 and 1853. Finally in 1855, the Madras
government took some remedial measures. They conducted surveys and changed settlement
systems. They anticipated the happiest results from the settlement.

According to R.C. Dutt, Sir Charles Wood, Secretary at State for India, similarly fixed one-half
the net produce as the limit of Land Revenue in Southern India 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. The regular survey settlement was commenced in 1861 (DUTT, R. C. Vol. II. From
the Accession of Queen Victoria in 1837 to the Commencement of the Twentieth Century) Even
though the settlement and survey of Madras did some good to the people, the required and
anticipated relief was hardly received from it. Firstly, there was equalization of the Land Tax in a
great measure. The second thing was that, the thirty years settlements saved those farmers and
cultivators from facing enquiries on an annual basis, harassment, humiliation and difficulty. In
the year 1875, farmers were being taxed more heavily than in 1860. This can be observed from
the state demand that was very high in relation to the aggregate produce and also to the price
level of the yield produced by the farmers. Ultimately, the fact that new settlement was not at all
helpful in solving security problems and issues of the farmers was clearly evident after the
occurrence of the Madras famine in the year 1877. If the rule of 1864 that was to limit the State-
demand to half of the nett produce of fields had been sincerely adhered to, better results might
have been secured.
So much rental was asked for on the presumption that the little that the cultivators were left with
would leave enough for them to cover their costs. Millions of acres of land was lost after the
1877 famine and was not regained till 1885.Within these eighteen years the revenue demand
went up by around 70%. This increase also included the cost of rising irrigation facilities that
were added to the land revenue while asking the cultivators to pay for them. After a lot of
debates and discussions, a law was passed in Madras. Instead of leaving the cultivators the
option of using and paying for canal water, a law was passed making the irrigation rate
compulsory on all lands supposed to be benefited by canals. And no option was left for
cultivators to appeal to Courts of Law to show that their lands were not benefited. The land tax
was pooled with the water tax. The irrigation facility that was supposed to and that actually did
save the farmers from lack of monsoon during the famines also added to their miseries when they
had to pay more than half the rent in the name of water tax. Later, the then Viceroy of India, the
Marquis of Ripon wanted to do away with this uncertainty. He made a rule that in districts where
surveys and settlements have already taken place, an augmentation of the Land Revenue cannot
be allowed there except when the upsurge in price is clearly evident. The Madras Government
acknowledged this rule.

CONCLUSION:

The paper discussed in detail the land settlements introduced by the British government in India
and their impacts on the agriculture and the economy of India. The three major kinds of land
settlements thus introduced by the British in India were the Permanent land settlement system,
the Ryotwari settlement and the Mahalwari system. The detailed description and impacts of the
three settlements have been discussed using three major provinces of the then Indian economy as
examples. The Permanent land settlement of the Bengal province, the Ryotwari settlement of the
Madras province and the Mahalwari system of the Northern India have been discussed in detail.
The Ryotwari and the Mahalwari settlements were not permanent. The Land Systems of Madras,
like those of Northern India, were built up under the administration of the East India Company.
In this paper, I have tried to seek answers to the questions that I raised in the beginning of it. The
British government took various policies during its rule over the Indian subcontinent. Many new
economic and agricultural policies that had already been tried and tested and had been successful
in England were also introduced in India including the land settlement systems and proposals of
rent and land revenue collection. The purpose for which so many efforts were being made was
not at all development of the Indian economy. Despite there being good governance and a
sensitive attitude of a few governors like Thomas Munro and Lord Cornwallis, towards the
farmers of India, the purpose largely was to draw as much wealth as possible from the Indian
economy and use it for the Industrial development in their hometown England. The purpose for
which there was so much of interference on the part of British rulers was being fulfilled without
many problems. There may be instances such as providing people with irrigation facilities,
taking lands from zamindars and giving them to the direct cultivators that did some good to the
population. However, the policies at large resulted in widespread exploitation of the farmers. The
negligence of the British government towards people and the prevailing bad conditions took lives
of a lot of people in the form of famines, indebtedness, unbelievable high revenues etc.

The paper is a reflection of the sad state of the farmers who at the hands of British rulers were
exploited mercilessly on their own soil. The end of the British rule however did not bring an end
as well to the miseries and problems for the farmers. By the end of the British rule in 1947, the
political leaders of India were well aware of the farmers conditions and had in mind the steps,
programs and policies to be adopted for the benefit of the farmers. The struggle and miseries for
these farmers have not ceased even today as mentioned in the beginning of the paper. A much
needed drastic change not just in the governments policies but also in the effectiveness in
dealing with people-who find loopholes in the laws and keep on exploiting smaller farmers by
tricking them or making them indebted and ultimately snatching their land from them-is still
being awaited.

References

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the British power in 1757 to the accession of Queen Victoria in 1837 London, Routledge &
K. Paul.

DUTT, R. C. Vol. II, From the Accession of Queen Victoria in 1837 to the Commencement of
the Twentieth Century London, Routledge & K. Paul.

Ray, Ratnalekha, (1979), Change in Bengal agrarian society, c1760-1850. Publisher

Manohar,. Original from, the University of Michigan

Kumar, Dharma, (1965),Land and Caste in South India. Agricultural Labour in the
Madras Presidency during the Nineteenth Century Cambridge Studies in Economic History.
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