In 1793, Governor-General Lord Cornwallis introduced the Permanent Settlement in Bengal, fixing land revenue in perpetuity (permanently):
A. The British Rationale:
- The Company hoped that fixing the state's revenue demand forever would incentivize landlords (Zamindars) to invest capital in improving agricultural land (clearing jungles, building irrigation), since any surplus produce above the fixed revenue would remain with the zamindar as profit.
- It created a loyal, conservative class of wealthy Indian landowners committed to preserving British colonial rule.
B. Why Zamindars Failed to Pay & The Sunset Law:
- 1. Exorbitantly High Initial Demand: Anticipating that revenue would be fixed forever, the British set the initial tax rate at an artificially crushing level.
- 2. Depressed Agricultural Prices (1790s): Agricultural prices were low, so peasants could not pay their rents.
- 3. The Inflexible "Sunset Law": Revenue was fixed regardless of crop failure, flood, or famine. If payment was not deposited in the treasury by sunset on the specified date, the zamindari estate was seized and auctioned off! Over 75% of zamindaris changed hands in the first thirty years.
C. How Zamindars Resisted Auctions (The Burdwan Strategies):
At the 1797 public auction of the Raja of Burdwan's estates, the Raja deployed clever counter-strategies:
- Fictitious / Benami Sales: The Raja's own servants and agents bought the estates under fake names. They paid the initial 10% deposit, refused to pay the remainder, forcing a re-auction. The property was repeatedly sold and bought back by the Raja at rock-bottom prices!
- Mother's Estate Exemption: The Raja transferred vast properties to his mother, because British law prohibited the confiscation of women's property.
- Armed Lathiyals: If an outsider bought an estate, the Raja's club-wielding enforcers (lathiyals) attacked the new buyer's agents, while village peasants refused to let new owners enter.