<P> Earlier zamindars in Bengal, Bihar and Odisha had been functionaries who held the right to collect revenue on behalf of the Mughal emperor and his representative, the diwan, in Bengal . The diwan supervised the zamindars to ensure they were neither lax nor overly stringent . 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 . As a result, landholders were unsupervised or reported to corrupt and indolent officials . The result was that revenues were extracted without regard for future income or local welfare . </P> <P> Following the devastating famine of 1770, which was partially caused by this shortsightedness, Company officials in Calcutta better understood the importance of oversight of revenue officials . They failed to consider the question of incentivisation; hence Warren Hastings, then governor - general, introduced a system of five - yearly inspections and temporary tax farmers . </P> <P> Many appointed as tax farmers absconded with as much revenue as they could during the time period between inspections . The British Parliament took note of the disastrous consequences of the system, and in 1784, British Prime Minister William Pitt the Younger directed the Calcutta administration to alter it immediately . In 1786 Charles Cornwallis was sent out to India to reform the company's practices . </P> <P> 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 . Between 1786 and 1790, the new Governor - General Lord Cornwallis and Sir John Shore (later Governor - General) entered a heated debate over whether or not to introduce a permanent settlement with the zamindars . Shore argued that the native zamindars would not trust the permanent settlement to be permanent and that it would take time before they realised it was genuine . </P>

Who suffered the most from the decennial settlement