The ryotwari system, instituted in some parts of British India, was one of the two main systems used to collect revenues from the cultivators of agricultural land. These revenues included undifferentiated land taxes and rents, which were collected simultaneously. Under the Ryotwari system of land revenue settlement, every registered landowner were called proprietor. These proprietors were responsible for the direct payment of the land revenue to the state. The Proprietor had the right to sub let his land holdings, or to transfer, mortgage or to sell it. A proprietor holds the land till the government wanted him to be the Proprietor. In case if the Proprietor failed to pay the state demand of the land revenue, he was evicted from the office.
The company acquired the Brahamahal district in Madras in 1792, where they introduced the Ryotwari land revenue system. Capt. Read assisted by Thomas Munro fixed the state demand on the basis of the 50 % of the estimated produce of the fields. However this estimated rent was more than the whole economic rent. With the passage of time this system was extended to the other parts. As a result the terms and the condition of the Ryotwari system proved very miserable to the tenants and the farmers as well as the Proprietors.
However Thomas Munro realized the ill effects of the previous terms and conditions introduced by the Ryotwari system. Hence he extended the Ryotwari system to all parts of the province (except the permanently settled areas) and fixed a new rate. According to the new settlement introduced by Munro the land revenue was fixed on the basis of the one-third of the gross produce of the holdings. According to the Ryotwari system, the state revenue was affixed in terms of money. This state demand had no connection with the actual yield of the holding or the prevailing prices in the market.
The Ryotwari system of land revenue introduced by Munro operated for nearly thirty years. According to the historians though the Ryotwari system was flexible than the Mahalwari system, yet it caused oppression and agricultural distress. The peasantry was shattered and subjected to utter poverty. Hence they became the subjects of the chetty or the moneylenders to pay off the land revenue to the state. Thus the Ryotwari system of land revenue gave rise to a group of moneylenders, who were no less the oppressors. The machinery of collection of the land revenue or the return s of the moneylenders was too oppressive.
In 1855, again an extensive survey and the settlement plan were introduced. According to this new scheme, land revenue was fixed on the basis of the 30 % of the gross produce. Later the Rule of 1864 limited the state demand to 50 % of the rental. But these instructions laid down by the Rule of 1864 were more an affairs on paper and never became actual facts of administration.
The Company also introduced the Ryotwari Settlements in Bombay Presidency. Here, the Government eliminated the landlords and the village communities, which could intercept their profits.
In 1835 lieutenant Wingate was appointed as the superintendent of Survey. According to the reports, submitted by Wingate, the state land revenue demand for a district was first determined on the basis of the paying capacity of the people. Then the total district demands were distributed among the fields. Under the new scheme of the Ryotwari system, the earlier system of equitable amount of the gross produce was substituted. The previous system was replaced by a geological basis of assessment, which was placed on each field instead of the holdings of a cultivator. This new scheme of the Ryotwari System was more flexible. This system permitted a cultivator to give up any field he liked or take up another fields, which might have remained unoccupied. The settlement was made for thirty years.
The Resettlement work began after 30 years, which was taken up in 1866. Due to the commencement of the American civil war the demand for Bombay Cotton temporarily pushed up the prices. This temporary boom gave an opportunity to the Survey officers, to increase the land revenue by 66% to 100 %, without giving any right to the cultivators to appeal to the court of law.
The effects of the sudden increase of the land revenue proved disastrous. The Deccan witnessed the Agrarian riots in 1875. The Government responded by the enactment of the Decca Agriculturists Relief Act, 1879. Through this Act the Government provided relief against the moneylenders, but did nothing to restrain the excessive state demand. The condition of Bombay was equally appalling. Further there was no provision for an appeal to the courts of law against over assessment. Several new rules were introduced. The collector of the district declared that the if he cultivator wanted to retain his land according to the newly established rules, he could; if he did not chose he could throw it up.
Thus the Ryotwari system of land revenue proved extremely disastrous. The excessive state demand with the new judicial and administrative set up turned Indian rural economy upside down.