Land Revenue System, Download PDF

By Brajendra|Updated : August 23rd, 2022

Land Revenue System: Land revenue is tax or revenue levied on agricultural production on land. The Indian state had since time immemorial taken a part of the agricultural produce as land revenue. Since the acquisition of Diwani rights (right to collect taxes on behalf of the Emperor) for Bengal, Bihar, and Orissa in 1765, a major concern of the Company was to increase the land revenue collection, which historically was the major source of revenue for the state in India.

Here, we are giving the complete study material of ‘ Land Revenue System’ that will ease the journey of aspirants to crack the competitive examinations like BPSC and other state-level examinations.


In 1793, Lord Cornwallis introduced the Permanent Settlement system for fixing the land revenue at a permanent amount. It was introduced in areas of Bengal and Bihar. It was later extended to Orissa, Northern Districts of Madras and Districts of Varanasi. In this system, zamindars were recognised as the owner of lands. Its provisions are:

  • Zamindars and revenue collectors were converted into landlords. They acted as agents of government in collecting land revenue from ryots.
  • The right of ownership of land made hereditary and transferable.
  • The attempt of the official was to secure the maximum amount. Hence rent of revenue was fixed very high.
  • Zamindars were to give 10/11th of the rental they derived, keeping the only 1/11th for themselves.
  • If rental of zamindar’s estate increased as a result of the extension of cultivation and improvement in agriculture, he would keep the entire amount of the increase.
  • On the other hand, even if the crop had failed, he had to pay his revenue rigidly on the due date; otherwise, his lands were to be sold.

Impact of Zamindari system:

  • Amid rising freedom movements, class of zamindars was created as a supporter who owed its existence to British rule and compelled by its own basic interest to support it.
  • Financial security for British administration as land revenue was the chief source of income.
  • This Newly created system acted as security of stable income.
  • The government started giving land to persons who had rendered faithful service to British rule.
  • However, over the years income declined, the number of intermediaries kept increasing.
  • The system triggered more agrarian revolts.

Demerits of the system:

  • Cultivators were reduced to the status of mere tenants at the will of zamindars.
  • Cultivators were deprived of the right to the soil and customary rights.
  • This much high and impossible demand for land revenue resulted in the sale of land. Between 1794 – 1807, nearly half of zamindari lands were sold.
  • No efforts were made to improve the conditions of cultivation and agriculture productivity.
  • The permanent settlement system added distress to agriculture.

This system was introduced on the recommendation of Reed and Thomas Munro by Waren Hasting. It was considered to be a continuation of the state of affairs that existed in the past. It was introduced in parts of Madras and Bombay Presidencies at the beginning of the nineteenth century. Its provisions were:

  • The cultivator was to be recognised as the owner of his land. So the payment of land revenue was direct to be done by him.
  • It was not a permanent system and was revised periodically after 20 to 30 years when revenue demand was raised.
  • Cultivators could sale, mortgage and lease land on the condition that they pay taxes regularly.


  • The Ryotwari settlement did not bring the system of peasant ownership.
  • The land rights of ryots were negated as land revenue was fixed at a very high rate that left them with a bare minimum amount at hands. Eg: Madras government had rate 45% to 55% of grass production as land revenue to be paid by ryots.
  • The enhancement of inland revenue was to be done at the will of the government.
  • Even in the condition of extreme drought and floods, ryots had to pay revenue partially or wholly.
  • As revenue was demanded in the form of cash, farmers started cultivating cash crops instead of food crops that could give them immediate cash.
  • At the time of the American Civil war, the export of cotton decreased, but the government refused to cut down revenue. This resulted in loan default and land was given to moneylenders.
  • In this system, one giant zamindar that states replaced a large number of zamindars. So if the lands of ryots would be sold they will remain mere as government tenets.
  • The loss of job resulted in widespread of landlordism and tenancy.
  • In some district, about two-third of land was leased.

The system of Mahalwari was introduced by Holt Mackenzie and was mainly centralised in Ganga valley, the North West province, parts of Central India and Punjab. This was a modified form of the zamindari system. This was in congruence with the traditional system of joint land rights on the villages in the said provinces. Its provisions were:

  • The village was taken as a unit for assessment of land revenue.
  • On the whole community in the village, taxation was imposed as its rights were common.
  • The landlord or head of the family claimed to be the landlord of the village or the estate (mahal) with whom the settlement was taken place.
  • There was a periodic revision of land revenue.
  • The collection target was to be divided among cultivators.
  • So everyone was responsible to meet the target of revenue.
  • The farmer was given the right to sell or mortgage the respective property.


  • Land revenue was as high as 50 to 75% of the gross produce.
  • Productivity declined because of the fragmentation of farmland.
  • As revenue was demanded in the form of cash, farmers started cultivating cash crops instead of food crops that could give them immediate cash.
  • Sale of land to moneylenders as a result of a failure in repaying the debt.
  • There were widespread land sub-leasing and landlessness.


British introduced a new form of private ownership of land so that cultivators do not get benefitted by innovation. For the sole purpose of protecting the government’s revenue, the land was made saleable, mortgageable and alienable. Britishers made the land as a commodity. This changed the existing traditional system of land fundamentally. This shaken the stability and continuity of villages. The whole ecosystem of village economy collapsed.

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