Which of the following statements are TRUE about Ricardian ideas?
(A) A landowner should have a claim only to "average rent".
(B) The state needed to tax the "average rent" of landowner.
(C) If tax was not levied, cultivators were likely to turn rentiers.
(D) The state needed to tax the surplus yield of the land.
(E) If tax was not levied, the surplus income was likely to be productively invested in the improvement of the land by the peasants.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A), (C), (D) only
(A) A landowner should have a claim only to “average rent”. Correct. According to Ricardian ideas, a landowner should have a claim only to the “average rent” that prevailed at a given time.
(B) The state needed to tax the “average rent” of landowner. Incorrect. The average rent was the landowner’s due. What the state needed to tax was the surplus – what the land yielded over and above this average rent.
(C) If tax was not levied, cultivators were likely to turn rentiers. Correct. If tax was not levied, cultivators were likely to turn into rentiers, living on rental incomes.
(D) The state needed to tax the surplus yield of the land. Correct. When the land yielded more than the average rent, the landowner had a surplus that the state needed to tax.
(E) If tax was not levied, the surplus income was likely to be productively invested in the improvement of the land by the peasants. Incorrect. The idea was the reverse: untaxed, the surplus income was unlikely to be productively invested in the improvement of the land.
NCERT (2026-27): “3.2 A new revenue system … There were other reasons too. When officials devise policies, their thinking is deeply shaped by economic theories they are familiar with. 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.…” |