Question

How did David Ricardo’s ideas influence British revenue policies in India?

• A. Adoption of fixed revenue demands for Ryots
• B. Taxing landowners’ surplus income based on average rent
• C. Widespread implementation of Permanent Settlement
• D. Rejection of revenue in favour of village development

Hint:

David Ricardo’s theory of rent played a key role in shaping British land tax policies in India, where landowners were taxed based on their income from land rather than the land itself.

Answer 1

The Correct Option is B

David Ricardo, a prominent British economist, is known for his theory of rent, which argued that rents are determined by the difference in land fertility and the surplus income generated from land. This idea influenced British revenue policies in India, particularly in terms of taxation.
1. Ricardo's Theory of Rent:
Ricardo's theory suggested that landowners' income or rent is based on the difference between the potential productivity of land and the cost of bringing it into cultivation. This idea influenced the British policy of taxing landowners' surplus income based on average rent, which was seen as a way to increase revenue without directly burdening the peasantry.
2. Other Options:
- Option (A): The adoption of fixed revenue demands for Ryots was not directly influenced by Ricardo's ideas. This policy was more a result of the British administrative need for stable revenue collections. - Option (C): The Permanent Settlement, introduced by Cornwallis, was also not directly influenced by Ricardo's theories, although it was a major revenue reform. - Option (D): Rejection of revenue in favour of village development was not a part of Ricardo's ideas or British policies in India.
Conclusion:
The correct answer is (B), as Ricardo's ideas about surplus income and rent influenced the British practice of taxing landowners based on average rents, leading to policies such as the one mentioned in the question.