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This system was introduced by Cornwallis in 1793 through Permanent Settlement Act. It was introduced in provinces of Bengal, Bihar, Orissa and Varanasi, which roughly covers 19% of British India.
In 1765, the revenue administration was taken up by English East India Company. From 1765 to 1772, dual government was carried in Bengal. From 1772 to 1793, the entire administration of Bengal was under the control of East India Company and at this point of time a new kind of economic system was introduced called `Annual Bidding System`. Under this system the land was divided into estates. The powers to collect taxes from these estates were sold in bidding. The agreement was, the whole revenue has to be paid after winning the bid. This system led to administrative confusion as the collector of taxes changes regularly. The person involved in collecting taxes involved in grabbing huge amounts from the lands. A huge corruption was involved. To overcome the problems involved in `Annual Bidding System`, a new system called `Zamindari System` was introduced. It was also called as `Permanent Settlement System`.
Provisions of Zamindari System
- Zamindars were recognized as owner of the lands.
- Zamindars were given the rights to collect the rent from the peasants.
- The realized amount would be divided into 11 parts. 1/11 of the share belongs to Zamindars and 10/11 of the share belongs to East India Company. The amount to be paid to the company was called as `Peshwash`.
- The agreement was for ten years. The agreement was subjected to renewal after ten years. The kins of the Zamindars can inherit the same.
- The amount to be collected from the peasants was completely decided by the zamindars.
Advantages to the Britishers
- Burden of tax collection was totally done by natives.
- Stable and fixed amount of revenue was earned.
- The system was framed as a permanent structure.
- It was a flexible and easy system to transfer.
- Loyal and powerful class of zamindars was created and as a result British have got more support to continue their reign.
Dis-advantages to the Indians
- The amount of tax was left to the discretion of zamindars in this system and huge taxes were collected by them from peasants.
- Tenants – at – will: The position of peasants was not secured.
- Absentee – landlordism: The owner never involves in the production but he will have the share in the production.
Carver said, “Next to war, famine and pestilence the worst thing that can happen to agriculture is absentee-landlordism.”
- No one acted responsible during famines; neither British nor zamindars took interest to support the peasants during the famines.
- Ryotwari System
Ryotwari System was introduced by Thomas Munro in 1820 in Madras, Bombay, parts of Assam and Coorgh provinces of British India.
- Mahalwari System
Mahalwari system was introduced in 1833 during the period of Warren Hastings. It was introduced in Central Province, North-West Frontier, Agra, Punjab, Gangetic Valley, etc of British India.