The Permanent Settlement Act of 1793 or the Permanent Settlement of Bengal was introduced by Lord Cornwallis, which was basically an agreement between the East India Company and the landlords to fix the land revenue. First enacted in the states of Bengal, Bihar and Odisha, the Permanent Settlement Act of 1793 was later followed in northern Madras Presidency and the districts of Varanasi. The system eventually spread all over northern India by a series of regulations dated 1st May 1793. These regulations remained in place until the Charter Act of 1833.

Lord Cornwallis thought of this system as an inspiration from the prevailing system of land revenue in England where the landlords were the permanent masters of their holdings and they collected revenue from the peasants and looked after their interests. He envisaged the creation of a hereditary class of landlords in India. This system formed one part of a larger body of legislation enacted, known as the Cornwallis Code. The Cornwallis Code of 1793 divided the East India Company"s service personnel into three branches: revenue, judicial, and commercial.

History of Permanent Settlement Act of 1793
Before the arrival of the British in India, there were a class of Zamindars in Bengal, Bihar and Odisha who collected revenue from land on behalf of the Mughal Emperor or his representative, the Diwan. It was after the Battle of Buxar in 1764, the East India Company was granted the Diwani of Bengal. But due to a lack of understanding of the local laws and customs, the Company found itself not able to collect revenue from the innumerable number of farmers in rural areas. The severe Bengal famine of 1770 was partly due to this negligence of the Company.

It was after this that Warren Hastings, the then governor general of Bengal tried to bring in some reforms like the 5 yearly inspections and the temporary tax farmers. Hastings thought of this system of auction where any man who promised to collect the largest amount of revenue from an area, was given that land for 5 years. That man collected land revenue from villagers and paid to the district authorities. This system proved to be dangerous since those who promised to pay the maximum, tried to collect as much as possible by oppressive means. The people suffered badly because of this. Hastings also experimented with an annual settlement of lands, which too, failed.

Overview of Permanent Settlement Act of 1793
In the Permanent Settlement Act of 1793, the landlords or zamindars were recognised as the owners of the land. They were given hereditary rights of succession of the lands under them and could sell or transfer the land as they wished. The Zamindars" proprietorship would stay as long as he paid the fixed revenue at the said date to the government. If they failed to pay, their rights would cease to exist and the land would be auctioned off. The amount to be paid was fixed by the landlords, which would not increase in future. The fixed amount was 10/11th portion of the revenue for the government and 1/10th was for the Zamindar. This tax rate was way higher than the prevailing rates in England. In the Permanent Settlement Act of 1793 the Zamindar also had to give the tenant a patta which described the area of the land given to him and the rent he had to pay the landlord.

The Permanent Settlement Act had definitely some objectives in view, which can be summarized as:

Earning revenue could be made certain.
Ensuring a minimum amount of revenue
The system needed less supervision, so officials could be engaged in other spheres of administration
Forging an alliance between Zamindar class and British Colonial rulers.

There was some obvious influence of Permanent Settlement Act. The company hoped that Zamindar class would be their revenue generating machine as well as they would serve as intermediaries for the political aspect of their rule and would protect British Government in all their interests. However, in course of time it acted both ways. Zamindars were the natural protectors of the British rulers but when the British policy changed during mid -19th century that interfered with social reform, some Zamindars put themselves in opposition.

The agreement of permanent Settlement Act only included the revenue earning but there was no mention of the use of the land. Thus to earn more money from the land, the Company officials and Zamindars insisted on planting Indigo and cotton rather than wheat and rice. This was the cause of many worst famines of the Bengal. Another disadvantage was creation of absentee Zamindar class who did not pay attention in the improvement of land.

Thus, by Permanent Settlement Act of 1793, Zamindar class became more powerful than they were in the Mughal period.