Colonial Land Revenue Systems

How British rule reorganised land taxes through the Permanent Settlement, ryotwari and mahalwari systems, and how these choices shaped Indian agriculture for generations.

Land revenue was the largest source of income for British rule in India. How it was collected shaped rural society, and its effects can still be seen today.

The Permanent Settlement, 1793

Under Governor-General Lord Cornwallis, the British introduced the Permanent Settlement in Bengal, Bihar and Orissa in 1793:

Zamindars, landlords, were recognised as owners of the land.
They paid a fixed revenue to the government forever.
They collected rent from cultivators, keeping the difference.

The British hoped zamindars would invest in land improvement. Instead, many became absentee landlords, and tenants faced high rents and insecurity. The government also lost out when land values rose, since revenue was fixed.

The ryotwari system

In much of the Madras and Bombay presidencies, officials such as Thomas Munro introduced the ryotwari system from the early 19th century:

Revenue was assessed directly on individual cultivators, called ryots.
Assessments were revised periodically.

This removed landlords as intermediaries, but revenue demands were often heavy.

The mahalwari system

In parts of northern India, including areas of today’s Uttar Pradesh and Punjab, the mahalwari system assessed revenue on a village or estate, called a mahal, collectively.

Long-term effects

Economists Abhijit Banerjee and Lakshmi Iyer studied these systems in 2005. They found that districts where landlords controlled revenue collection had lower agricultural investment and productivity, and less spending on schools and health, even decades after independence, compared with districts where cultivators paid revenue directly.

After independence

India abolished zamindari after 1947 through land reform laws in many states, with varying success.

Two districts

Two neighbouring districts have similar soil and rainfall. One was under a landlord system, the other under direct cultivator settlement. Decades later, the cultivator district has more irrigation, higher yields and more schools. Historical institutions left lasting differences.

Thinking colonial policies stopped mattering after 1947

Research shows land revenue systems affected investment, productivity and public services long after independence.

Key takeaways

The Permanent Settlement of 1793 made zamindars owners paying fixed revenue.
The ryotwari system assessed revenue directly on cultivators.
The mahalwari system assessed villages or estates collectively.
Landlord areas had lower investment and productivity even after independence.