Describe permanent settlement as a problem.​

The revenue that had been fixed was so high that the zamindars found it difficult to pay. Anyone who failed to pay the revenue lost his zamindari. Numerous zamindaris were sold out auctions organised by the company.

To improve agriculture and to improve investment in land the Company introduced the Permanent Settlement in 1793. By the terms of the settlement, the rajas and taluqdars were recognized as zamindars. They were asked to collect rent from the peasants and pay revenue to the Company. The amount to be paid was fixed permanently, that is, it was not to be increased ever in future.

The Permanent Settlement, however, created problems. Company officials soon discovered that the zamindars were in fact not investing in the improvement of land. The revenue that had been fixed was so high that the zamindars found it difficult to pay. Anyone who failed to pay the revenue lost his zamindari. Numerous zamindaris were sold off at auctions organized by the Company.

By the first decade of the nineteenth century the situation changed. The prices in the market rose and cultivation slowly expanded. This meant an increase in the income of the zamindars but no gain for the Company since it could not increase a revenue demand that had been fixed permanently.