Land Revenue System during British rule in India

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Mains: GS I- Modern Indian history from about the middle of the eighteenth century until the present- significant events, personalities, issues.

Land revenue
  • Land revenue is tax or revenue levied on agricultural production on land.
  • The Indian state had since time immemorial taken a part of the agricultural produce as land revenue.
  • It has been the major source of revenue for empires.
  • It is either collected as a percentage of the share of the total crop or a monetary value is fixed on the land to be paid by the farmer.
  • It had done so either directly through its servants or indirectly through intermediaries, such as zamindars, revenue farmers, etc., who collected the land revenue from the cultivator and kept a part of it as their commission.
  • These intermediaries were primarily collectors of land revenue, although they did sometimes own some land in the area from which they collected revenue.
Land Revenue System Under British rule
  • Since the acquisition of Diwani rights (right to collect taxes on behalf of the Emperor) for Bengal, Bihar, and Orissa in 1765, a major concern of the Company was to increase the land revenue collection, which historically was the major source of revenue for the state in India. 
  • Nearly all the major changes in the administration and judicial system till 1813 were geared to the collection of land revenues.
  • The main burden of providing money for the trade and profits of the Company, the cost of administration, and the wars of British expansion in India had to be borne by the Indian peasant or ryot.
  • British could not have conquered such a vast country as India if they had not taxed the peasant heavily.
  • They introduced the policy of revenue collection by abandoning the age-old system of revenue administration
  • Their policies were aimed at getting maximum income from the land without caring about its consequences on cultivators and peasants.

Three major systems of land revenue collection existed in India. 

Permanent Settlement System


  • In 1773, the company decided to manage the land revenues directly.
  • Warren Hastings auctioned the right to collect revenue to the highest bidders.
  • But his experiment did not succeed.
  • Though the amount of land revenue was pushed high by zamindars, the actual collection varied from year to year and seldom came up to official expectations.
  • This introduced instability in the Company’s revenues at a time when the Company was hard-pressed for money.
  • Moreover, neither the ryot nor the zamindar would do anything to improve cultivation when they did not know what the next year’s assessment would be or who would be the next year’s revenue collector.
  • It was at this stage that the idea first emerged of fixing the land revenue at a permanent amount.

Regions under Permanent settlement

  • Permanent Settlement was introduced in Bengal and Bihar in 1793 by Lord Cornwallis.
  • It was later extended to Orissa, the Northern Districts of Madras, and the District of Varanasi.
  • In parts of Central India and Awadh, the British introduced a temporary zamindari settlement under which the zamindars were made owners of land but the revenue they had to pay was revised periodically.
  • Another group of landlords was created all over India when the government started the practice of giving land to persons who had rendered faithful service to the foreign rulers.

Features of Permanent settlement

  1. Zamindars and revenue collectors were converted into landlords.
    • They were not only to act as agents of the government in collecting land revenue from the ryot but also to become the owners of the entire land in their zamindaris.
    • Their right of ownership was made hereditary and transferable.
    • On the other hand, the cultivators were reduced to the low status of mere tenants and were deprived of long-standing rights to the soil and other customary rights.
    • This was done so that the zamindars might be able to pay in time the exorbitant land revenue demand of the Company.
  2. Fixation of revenue
    • Zamindars were to give 10/11th of the rental they derived from the peasantry to the state, keeping the only 1/11th for themselves.
    • But the sums to be paid by them as land revenue was fixed in perpetuity.
    • If the rental of a zamindar’s estate increased he would keep the entire amount of the increase.
    • The state would not make any further demand upon him.
    • At the same time, the zamindar had to pay his revenue rigidly on the due date even if the crop had failed for some reason; otherwise, his lands were to be sold.
    • The initial fixation of revenue was made arbitrarily and without any consultation with the zamindars.
    • The officials attempted to secure the maximum amount and hence, the rates of revenue were fixed very high.
    • John Shore, the man who planned the Permanent Settlement and later succeeded Cornwallis as Governor-General, calculated that if the gross produce of Bengal is taken as 100, the government claimed 45, zamindars and other intermediaries below them received 15, and only 40 remained with the actual cultivator.
    • One result of this high and impossible land revenue demand was that nearly half the zamindari lands were put up for sale between 1794 and 1807.

Comparison of the revenue system in Britain and India

  • The landlord in Britain was the owner of land not only to the tenant but also according to the state.
  • But in Bengal, while the zamindar was the landlord over the tenant, he was himself subordinate to the state.
  • He was reduced virtually to the status of a tenant of the East India Company.
  • In contrast to the British landlord, who paid a small share of his income as land tax, zamindar had to pay as tax 10/11th of his income from the land of which he was supposed to be the owner; and he could be turned out of the land unceremoniously and his estate sold if he failed to pay the revenue in time.

Why were zamindars recognized as the proprietors of land?

Before 1793 the zamindars of Bengal and Bihar did not enjoy proprietary rights over most of the land. Historians think that the decision to recognize the zamindars as the proprietors of land was determined by political, financial and administrative expediency:

  1. The need to create political allies
    • The British officials realized that as they were foreigners in India, their rule would be unstable unless they acquired local supporters who would act as a buffer between them and the people of India.
    • This argument had immediate importance as there were a large number of popular revolts in Bengal during the last quarter of the eighteenth century.
    • So they brought into existence a wealthy and privileged class of zamindars that owed its existence to British rule and would be compelled to support it.
    • This expectation was, in fact, fully justified later when the zamindars as a class supported the foreign government in opposition to the rising movement for freedom.
  2. Financial security
    • Before 1793 the Company was troubled by fluctuations in its chief source of income, the land revenue.
    • Permanent Settlement enabled the Company to maximize its income as land revenue was now fixed higher than it had ever been in the past.
    • Collection of revenue through a small number of zamindars seemed to be much simpler and cheaper than the process of dealing with lakhs of cultivators.
  3. To increase agricultural production
    • Since the land revenue would not be increased in the future even if the zamindar’s income went up, the latter would be inspired to extend cultivation and improve agricultural productivity as was being done in Britain by its landlords.

Impact of Land Revenue System Under Permanent Settlement

  • As the land revenue was going to be permanently fixed, the company fixed the rates arbitrarily high (10/11th of total collection) much higher than the past rates. This placed a high burden on the zamindars which were ultimately borne by the peasants.
  • The tenantry of Bengal and Bihar was left entirely at the mercy of the zamindars.
  • It led to the growth of a system of absentee landlordism. These zamindars were interested only to maximize their revenue collection and had no interest in investments in agriculture.
  • High revenue demand and harsh methods of collection, eventually led to frequent land transfers which didn't benefit zamindars either. The company's revenue collection also fell as agricultural output declined. By the 1770's Bengal witnessed famines.
The Ryotwari Settlement

Regions under ryotwari settlement

  • The Ryotwari Settlement was introduced in parts of the Madras and Bombay Presidencies at the beginning of the nineteenth century.
  • It included states of Malabar, Coimbatore, Madras, Assam, and Madurai and later it was extended to Maharashtra and East Bengal. 
  • It was introduced on the recommendations of British officials Reed and Sir Thomas Munro

Features of ryotwari settlement

  • Under this system, the taxes were directly collected by the government. It established a direct relationship between the government and the ryot (cultivator)
  • The cultivator is to be recognized as the owner of his plot of land subject to the payment of land revenue
  • The settlement under the Ryotwari system was not made permanent. It was revised periodically after 20 to 30 years when the revenue demand was usually raised.
  • Farmers had the right to sell, mortgage, and lease the land but had to pay their taxes on time. If they failed to pay taxes, they were evicted from the land. 

Reasons for the Adoption of the Ryotwari System

  • The British officials believed that there are no zamindars or feudal lords with large estates in south and south-western India. So it was difficult for the British to implement the zamindari system.
  • The government revenues were fixed in the permanent settlement so it could not gain from the rise in prices.
  • Moreover, the government felt that the revenue was being unnecessarily shared with the zamindars which reduced its profits.
  • The zamindari system was oppressive for the peasants and led to frequent agrarian revolts. The government wanted to avoid these situations.
  • It also hoped that by introducing the ryotwari system, the purchasing power of peasants would increase, which would increase the demands for British goods in India.

The ryot’s rights of ownership of his land were negated by the following factors:

  1. The government openly claimed that land revenue was rent and not a tax
  2. In most areas the land revenue fixed was exorbitant
  3. The government retained the right to enhance land revenue at will
  4. The ryot had to pay revenue even during the famines and floods otherwise they were forced to evict the land.

Impact of Land Revenue System Under Ryotwari System

  • The peasants did not benefit from this land revenue system and felt that smaller zamindars we are replaced by one giant zamindar, the British government.
  • High land revenue led the impoverishment of farmers
  • A major drawback of this system was over the assessment of crop yields.
  • The system of tenancy and landlordism still existed as the artisans who were now unemployed, worked as tenants for rich farmers.
  • In several districts, more than two-thirds of the total agricultural land was leased.
  • The government insisted the peasants grow cash crops which required higher investments. It led to the indebtedness of farmers and when prices declined they suffered the most. For example, when the prices of cotton declined after the end of the American Civil War the peasants suffered the most. This created conditions ripe for a rebellion that came in the form of Deccan Agrarian riots in 1875.
The Mahalwari System

Regions under the Mahalwari system

  • It is a modified version of the zamindari settlement, introduced in the Ganga valley, the North-West Provinces, parts of central India, and Punjab.
  • In Punjab, a modified Mahalwari System known as the village system was introduced. 
  • In these areas, more than often there was a system of collective landholdings by the heads of the families or the landlords.
  • The village community mainly included a group of elders, mainly from the higher castes.

Features of mahalwari system

  • The revenue settlement was to be made village by village or estate (mahal) by the estate with landlords or heads of families who collectively claimed to be the landlords of the village or the estate.
  • The taxes were distributed between the individual farmers who paid their share in the tax revenue.
  • However, the ownership rights of lands were with the individual peasants, who could mortgage or sell his land.
  • The land revenue was periodically revised.

Impacts of Land Revenue System Under Mahalwari System

  • As the areas covered under the Mahalwari system in Northern India were fertile, the government put the revenue demands between 50% to 75% of the crop production.
  • Within subsequent generations, the lands were fragmented, but the revenue demand was still high which had to be paid in cash. This led to their indebtedness in the hands of money lenders.
  • Further, this system led to the eviction of farmers from the land. Due to this sub-leasing of land was more common in Mahalwari areas.

British revenue systems, therefore, led to the impoverishment of peasantry. By making land a transferable property, the British facilitated the rise of absentee landlords, oppressive moneylenders and pushed the peasant further into misery.

The British by making land a commodity that could be freely bought and sold introduced a fundamental change in the existing land systems of the country. The stability and continuity of the Indian villages were shaken. The entire structure of rural society began to break up.

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