The correct option is option-1, which means that statements 1, 2, 3, and 4 are correct. Let`s dissect each statement:

1. It conferred proprietary rights to peasants: This statement is correct. The Permanent Settlement introduced by the British East India Company in 1793 allowed peasants to have permanent and hereditary rights over the land they cultivated. It provided them with a sense of ownership and security.

2. The Zamindars were recognized as the proprietors of land: This statement is not included in option-1, so it is incorrect. In the Permanent Settlement system, the Zamindars were intermediaries between the government and the peasants, but they were not recognized as the proprietors of the land.

3. The government permanently fixed the land revenue demand: This statement is correct. Under the Permanent Settlement, the government fixed a permanent amount of land revenue that would be collected from the peasants. This eliminated the uncertainty and arbitrary increases in revenue demand.

4. The Zamindars acted as the middlemen between the peasants and the government: This statement is correct. The Zamindars were responsible for collecting land revenue from the peasants and passing it on to the government. They acted as intermediaries and had a significant role in the revenue