The Ryotwari Settlement was based on the ideas of :

David Ricardo

The correct answer is Option (2) → David Ricardo

As British rule expanded from Bengal to other parts of India, new systems of revenue were imposed. The Permanent Settlement was rarely extended to any region beyond Bengal.

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. Many British officials in India thought that the history of Bengal confirmed Ricardo’s theory. There the zamindars seemed to have turned into rentiers, leasing out land and living on the rental incomes. It was therefore necessary, the British officials now felt, to have a different system.

The revenue system that was introduced in the Bombay Deccan came to be known as the ryotwari settlement. Unlike the Bengal system, the revenue was directly settled with the ryot. The average income from different types of soil was estimated, the revenue-paying capacity of the ryot was assessed and a proportion of it fixed as the share of the state. The lands were resurveyed every 30 years and the revenue rates increased. Therefore the revenue demand was no longer permanent.