Lord Cornwallis implemented a new land tax policy in Bengal and Bihar regions, during 1793 in order to generate steady revenue per annum. This was called Permanent Zamindari System. Under this system, Zamindar became the land owner. The Zamindar was expected to pay the agreed land taxes to the company on a set date every year. He -was free to collect any amount of land taxes from the farmers and could retain the excess money collected. This benefited the Zamindar more. If the Zamindar was unable to collect land taxes due to floods and famine and pay the Company, the ownership of the lands was taken away by the Company. Both the Zamindar and the Company were benefitted by this system, but the farmers were the grave sufferers.
This system created a new social group that aided the British. The farmers, the farming labourers suffered due to irregular working opportunities in the farming lands. They were exploited and had to lead a life of insecurity. This system was extended to Bihar, Odissa, Andhra and Varanasi regions later. According to Charles Metcalf, “the Indian farmers were born in debt, lived in debt and **** in debt due to the land tax policies of the British”.
