This ryotwari system introduced by Thomas Munro in in the south and South Western parts of India. This system was introduced because the Britishers believed that these parts of the country did not have any local big Zamindar with whom they can make settlement. So in this system sir Thomas Munro announced that the cultivator on the ryot was the sole owner of his land. And Britishers directly made a settlement with them.

This system was basically introduced because under the permanent settlement system the company had to face huge losses as the revenue demand from the cultivator and the Zamindar was fixed. In the permanent settlement system if the crops failed then also the cultivators had to pay the same amount but if the crops produce was high and rich then also the cultivator had to pay the same amount. This system cost losses to the British because if the crops were good then the cultivator was able to keep the larger share of profit. Therefore under the ryotwari system the demands for revenue were revised periodically, depending upon the yield of the season. Although the demand was never lowered but was always increased. This system of ryotwari was later introduced in parts of Madras and Bombay Presidency as well. The demand for revenue was revised in every 20 to 30 years.

If the ryot failed to pay the taxes then his land was sold. The key features of this system that burden the peasants were:

1. The land revenue that was fixed was very high and after periodic revision it always got raised even more.

2. The peasants had to pay full amount of revenue even if their crops failed due to natural reasons.

3. The government did nothing to enhance the land quality and therefore the land qualities soon began degrading.