The British needed the land revenue to pay for purchase of Indian handicrafts, to meet the cost of conque3st of whole of India, to pay for employment of thousands of Englishmen in superior administrative services and to meet the costs of economic and administrative charges.
To meet the revenue requirements, the British introduced different types of land tenures in India. Under the Permanent Settlement, the zamindars and revenue collectors was converted into the hiany landlords. They were not only to act as agents of the Government in collecting land revenue from the royal, but also to become the owners of entire land in their zamindaris.
Their right by ownership wax made hereditary and transferable. On the other hand, the cultivators were reduced to the status of mere tenants and were deprived of longstanding rights to the soil and other customary rights.
Several major factors were responsible in shaping the British Land Revenue Policy in India. Financial factors were one set of factors. The permanent settlement and other settlements seemed a fixed and stable income for the state and the state could depend upon that income.
Further, it saved the Government the expenses that had to be spent in making collections and arrestments. Economically, it was claimed that the land tenures would encourage agricultural enterprise and prosperity. It was thought that waste land would be reclaimed and the soil under cultivation would be improved.
The zamindars would introduce new methods of cultivation like better rotation of crops, use of manures etc. Thus, the settlements would create conditions for the development of the fullest power of the soil. This in turn would create a contented and resourceful peasantry.
The another major consideration was that the Permanent Settlement would create a class of loyal zamindars who would be prepared to defend the company at all costs because their rights were guaranteed by the British. Thus, the Permanent Settlement secured for the Government the support of an influential class in the same way as the Bank of England had for William III.
The zamindars of Bengal stood loyal to British divining the great rebellion of 1857. Further, it was hoped that under the Permanent Settlement, the zamindars would act as the natural leaders of the riots and show their turbid spirit in helping the spread of education and other charitable activities.
Further, under the Permanent Settlement, the company was a financial loser in the long run. This is because the revenue to be paid by the zamindar was fixed in perpetuity. So, when the British conquered South India and Northern and Western India, they went for periodic settlements.
They adopted the Ryotwari and the Mahalwari system of land revenues in which settlements were made directly with the ryots or the village community subject to the paying that requisite amount in revenue for the British.
The overall impact of the British Land Revenue Policy and the excessive demand coaled with the new judicial and administrative set up was that it turned India rural economy upside down with the village panchayats deprived of their two main functions – land settlements and judicial and executive functions- and the Patel acting merely as a Government official charged with the duty of revenue collection, the old politico-economic-social framework of village communities broke down.
The introduction of private property in land turned land into a market commodity. Changes came in social relationship. New Social Classes like the landlord, trader the moneylender and the landed gentry shot into importance. The class of rural proletarian the poor peasant proprietor, the sub tenant, and the agricultural labour multiplied in number.
The climate of cooperation gradually gave place to the system of competition and individualism. The prerequisites of the capitalist development of agriculture were created. Further, new modes of production, introduction of money economy, commercialization of agriculture, better means of transport and hostage with the work market added a new dimension to Indian agriculture and rural economy.
Further, the British land Revenue Policy led to improvement of the peasantry. The peasant was progressively improvised. Although he was now free from internal wars, his material condition deteriorated and he steadily sank into poverty. The British policy of extorting the largest possible land revenue had led to such devastation that one-third of Bengal, obsessed Cornwallis had been transformed into a jungle inhabited by only wild beasts.
In both the permanently settled areas, and the areas of ryotwari settlements, the lot of peasants was unenviable. They were left to the mercies of the zamindars who raised rents to unbearable limits, compelled them to pay illegal dues and to perform forced labour and oppressed them in devise other ways.
In the areas of roytwari and mahalwari settlement, the Government took the place of the zamindars and raised excessive land revenue. The extreme poverty of the overwhelming
Majority of peasants left them without any resources with which to improve agriculture by using better cattle and seeds, more man wise and fertilizers and improved techniques of production. Nor did the cultivator sack rented by the Government or the zamindar had any incentive to do so.
The overall impact of the all this was steady stagnation and deterioration of agriculture. The poverty of the people found expression in a series of famines which merged all parts of India in the record half of the 19th century.