Do you agree that the idea of permanent fixation of land revenue of 1793 in Bengal was highly influenced by the Physiocratic school of thinking? Discuss.

Understanding the Permanent Settlement of 1793

The Permanent Settlement was a significant land revenue system introduced by Governor-General Lord Cornwallis in 1793. Its key features included:

• Fixed Land Revenue: The land revenue to be paid by the Zamindars to the East India Company was fixed permanently, ensuring a stable and predictable income for the Company.
• Zamindars as Landowners: Zamindars were recognized as the proprietors of the land, granting them hereditary rights of succession. They were responsible for collecting rent from the cultivators.
• Hereditary Rights: The ownership rights of Zamindars were made hereditary, transferable, and saleable, resembling a Western-European style of landed property.
• Sunset Law: A strict "Sunset Law" was enforced, under which Zamindaris were liable to be sold by auction if the Zamindars failed to pay the fixed revenue by the stipulated date.
• No Direct Dealings with Cultivators: The Company's direct dealings with cultivators ceased, placing the Zamindar as the intermediary.

The Physiocratic School of Thinking

Physiocracy was an 18th-century economic theory developed by French economists like François Quesnay. Its core tenets included:

• Agriculture as the Sole Source of Wealth: Physiocrats believed that only agriculture (and land development) could produce a "net product" or surplus, making it the sole source of national wealth. Manufacturing and commerce were considered "unproductive" or "sterile."
• Natural Order and Laissez-faire: They advocated for a "natural order" in which economic activities should operate without government intervention, a concept encapsulated by "laissez-faire, laissez-passer" (let do, let pass).
• Importance of Landlords: Landlords were seen as crucial for investing in land improvements to enhance agricultural productivity and thus national wealth.
• Single Tax on Land: Given that land was the only source of wealth, Physiocrats proposed a single tax (impôt unique) on the net product of land.

Arguments for Physiocratic Influence on the Permanent Settlement

Several aspects of the Permanent Settlement align with Physiocratic thought, suggesting a degree of influence:

• Emphasis on Land as the Source of Revenue: The very premise of the Permanent Settlement was to derive a stable and significant revenue from land, mirroring the Physiocratic emphasis on land as the primary source of wealth. The Company's financial stability was heavily reliant on land revenue.
• Creation of a Landed Proprietor Class: By recognizing Zamindars as absolute proprietors with hereditary rights, the British aimed to create a class of landowners who would have an incentive to invest in agricultural improvements. This resonated with the Physiocratic idea that landlords were essential for agricultural development and the generation of a net product. Thomas Law, an influential British official in Bengal, explicitly articulated ideas that reflected Physiocratic thinking, advocating for the creation of secure private property rights in land to encourage investment.
• Fixed Revenue and Predictability: The permanent fixation of revenue was intended to provide Zamindars with the certainty needed to make long-term investments in their estates, thereby increasing agricultural output. Physiocrats believed in minimal state intervention in the economy and a predictable taxation system that would encourage production.
• Limited Government Intervention in Agrarian Economy: While the Company fixed the revenue, it largely delegated the management of land and collection of rents to the Zamindars, aiming for reduced direct administrative involvement in the day-to-day agrarian economy, which aligns with the laissez-faire principles of Physiocracy.

Arguments Against Direct and Exclusive Physiocratic Influence

While connections exist, it is crucial to recognize that the Permanent Settlement was not solely, or even primarily, a direct application of Physiocratic theory:

• Revenue Maximization and Political Stability: The primary motivations for the British East India Company were to ensure a steady and maximized revenue stream to fund its administration and military, and to create a loyal class of intermediaries (Zamindars) for political stability. These pragmatic considerations often overshadowed purely economic ideologies. The Company needed funds to purchase Indian goods for trade and finance its expansion and administration.
• Practical Challenges and Administrative Efficiency: The Company had experimented with various land revenue systems (like annual and quinquennial settlements) after gaining Diwani rights in 1765, which proved inefficient and led to widespread corruption and economic instability. The Permanent Settlement was also a response to these administrative challenges, aiming for simplicity and efficiency in revenue collection.
• Mercantilist Background: The East India Company operated fundamentally within a mercantilist framework, focused on extracting wealth from India for Britain. While some Physiocratic ideas might have seeped into the discourse, the overarching economic policy of the British Empire was geared towards benefiting the 'mother country' through trade and resource extraction, not necessarily fostering the intrinsic wealth of India through agriculture for its own sake.
• Influence of English Landlordism: Many British administrators were also influenced by the English system of landlordism, where landlords played a role in agricultural improvement. The Permanent Settlement sought to replicate aspects of this system in Bengal, creating a class of improving landlords.

Synthesis of Influences

The idea of permanent fixation of land revenue was a product of multiple influences. While Physiocratic ideas contributed to the intellectual climate of the late 18th century, particularly emphasizing the importance of agriculture and landed property, they were intertwined with the practical imperatives of colonial administration, revenue generation, and the desire for political control. British officials like Philip Francis, a vocal advocate for a fixed settlement, were indeed influenced by Physiocratic ideas, seeing land as the ultimate source of economic and political power. However, Lord Cornwallis, while influenced by the idea of creating a stable landed class, also prioritized the Company's revenue demands and administrative convenience. The fixed revenue demand, which was initially very high (10/11th of the total revenue), often left Zamindars with little incentive or capital for investment, especially in the early years, demonstrating that pure Physiocratic ideals of investment-led agricultural prosperity were secondary to revenue extraction.

The Permanent Settlement can be seen as a colonial experiment that borrowed selective elements from contemporary European economic thought, including Physiocracy, to serve the specific needs and objectives of the British East India Company in India.