The Permanent Settlement was established as a land revenue system in Bengal in 1793. According to this, the East India Company would fix the revenue that each zamindar had to pay. The estates of those who failed to pay were auctioned. Many Zamindaris were auctioned after the Permanent Settlement as the zamindars regularly failed to pay the revenue. Some of the reasons for this are:
• The company felt that if the revenue was permanently fixed in the initial years, the Company would never be able to extract a portion of the improved income from land with the rise in prices rose and expanding cultivation. To ensure that this situation does not arise, the Company fixed the revenue high from the initial years itself stating the argument that the excessive burden on the zamindars would consequentially decline with the expansion of agricultural production and rise in prices. The zamindars were not able to pay this excessive revenue.
• This high revenue was fixed at a time when the prices of agricultural produce were down. Thus it was difficult for the ryots to pay their rents to the zamindars. This made the collection of rent impossible and thus the zamindars were not able to pay the revenue.
• The revenue was permanently fixed. It did not change with the changes in the harvest. Also, it had to be paid punctually. According to the Sunset Law, if payment of the revenue was not made by the sunset of the specified date, the zamindari could be auctioned. This also acted as a hindrance for the payment of revenue.
• The introduction of the Permanent Settlement had limited the power of the zamindars to the collection rent from the ryots and the overall management of his zamindari. Their activities were controlled and regulated, their powers and authority subdued and their autonomy was restricted. Their troops were dispersed, customs duties ended, and their cutcheries (courts) was under the supervision of a Collector appointed by the Company. Thus, they lost their power to engage in local justice and the local policing. The collectorate emerged as an alternative to their activities. This created discontent among the zamindars thus prevented them from paying the revenue.
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