Meanwhile, the condition of the Bengali peasantry became increasingly pitiable, with famines becoming a regular occurrence as landlords (who risked immediate loss of their land if they failed to deliver the expected amount from taxation) sought to guarantee revenue by coercing the local agriculturalists to cultivate cash crops such as cotton, indigo, and jute, while long-term private investment by the zamindars in agricultural infrastructure failed to materialise.
When the East India Company was awarded the diwani or overlordship of Bengal by the empire following the Battle of Buxar in 1764, it found itself short of trained administrators, especially those familiar with local custom and law.
In 1786, the East India Company Court of Directors first proposed a permanent settlement for Bengal, changing the policy then being followed by Calcutta, which was attempting to increase taxation of zamindars.
[citation needed] The main aim of the Permanent Settlement was to resolve the problem of agrarian crisis and distress that had resulted in lower agricultural output.
The British officials thought that such a process would lead to the emergence of yeomen class of farmers and rich landowners who would invest their capital to generate further surpluses.
[citation needed] In 1819, the Governor-general of India, Francis Rawdon-Hastings, observed that "[the Permanent Settlement,] fashioned with great care and deliberation has....subjected almost the whole of the lower classes throughout these provinces to most grievous oppression.
"[3] In 1829, Lord Bentinck, however, noted that the scheme did succeed in one important respect, saying, "If, however, security was wanting against extensive popular tumult or revolution, I should say that the Permanent Settlement....has this great advantage at least, of having created a vast body of rich landed proprietors deeply interested in the continuance of the British Dominion and having complete command over the mass of the people.
Incentivisation of zamindars was intended to encourage improvements of the land, such as drainage, irrigation and the construction of roads and bridges; such infrastructure had been insufficient through much of Bengal.
Cornwallis made the motivation quite clear by declaring that "when the demand of government is fixed, an opportunity is afforded to the landholder of increasing his profits, by the improvement of his lands".
The Court of Directors also hoped to guarantee the company's income, which was constantly plagued by defaulting zamindars who fell into arrears, making it impossible for them to budget their spending accurately.
In addition, the government tax demand was inflexible, and the British East India Company's collectors refused to make allowances for times of drought, flood or other natural disaster.
[5] The Company hoped that the Zamindar class would not only be a revenue-generating instrument but also serve as intermediaries for the more political aspects of their rule, preserving local custom and protecting rural life from the possibly rapacious influences of its own representatives.
There was a tendency of Company officials and Indian landlords to force their tenants into plantation-style farming of cash crops like indigo and cotton rather than rice and wheat.
Once the salient features of the Permanent Settlement were reproduced all over India, and indeed elsewhere in the Empire, including Kenya, the political structure was altered forever.
In Pakistan, where land reform was never carried out, elections in rural areas still suffer from a tendency towards oligarchy, reflecting the concentration of influence in the hands of zamindar families.
This is because[citation needed] once Pakistan became separated from India, and the two began to fight over Kashmir, the goal of the government was revenue extraction to fund the military.