David Ricardo's theory led to the introduction of Ryotwari Land Revenue Settlement in the Bombay Deccan.
Which of the following is NOT true about Ricardo's theory?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → The surplus income was likely to be productively invested by the state in the improvement of the land.
Option (1) A landowner should have claim only to the average rent. — Correct statement. According to Ricardian ideas, a landowner should have a claim only to the “average rent” that prevailed at a given time.
Option (2) The state needed to tax the surplus yield from the land. — Correct statement. When the land yielded more than this average rent, the landowner had a surplus that the state needed to tax.
Option (3) The cultivators were likely to turn into rentiers if the state did not levy the tax on surplus yield. — Correct statement. If the tax was not levied, cultivators were likely to turn into rentiers, people who live on rental income from property.
Option (4) The surplus income was likely to be productively invested by the state in the improvement of the land. — Incorrect statement. The theory said the opposite: without the tax, the cultivators’ surplus income was unlikely to be productively invested in the improvement of the land. The theory speaks of the cultivators’ surplus, not of the state investing it.
NCERT (2026-27): “3.2 A new revenue system … By the 1820s, the economist David Ricardo was a celebrated figure in England. Colonial officials had learnt Ricardian ideas during their college years. In Maharashtra when British officials set about formulating the terms of the early settlement in the 1820s, they operated with some of these ideas. According to Ricardian ideas, a landowner should have a claim only to the ‘average rent’ that prevailed at a given time. When the land yielded more than this ‘average rent’, the landowner had a surplus that the state needed to tax. If tax was not levied, cultivators were likely to turn into rentiers, and their surplus income was unlikely to be productively invested in the improvement of the land.…” |