According to the Ricardian ideas held by British officials in the 19th century, why was the Permanent Settlement considered a failure?

The correct option is It turned zamindars into rentiers who did not invest in land improvement.

Explanation

The question pertains to the influence of David Ricardo’s on British administrative policy in India during the 19th century. While the Permanent Settlement was introduced by Lord Cornwallis in 1793 based on the hope of creating an improving landlord class, later officials influenced by classical economics (specifically Ricardo and James Mill) critiqued this system.

Detailed Analysis:

• Ricardian Theory of Rent: According to Ricardo, "rent" is the surplus income derived from land after the costs of cultivation and normal profits on capital are met. He argued that this surplus belongs to the state (as the supreme landlord) rather than private individuals.
• Critique of Permanent Settlement:
  • Under the Permanent Settlement, the state's revenue demand was fixed forever. As cultivation expanded and agricultural prices rose, the income from land increased.
  • Because the state's share was fixed, this entire increase (the surplus or rent) went into the pockets of the zamindars.
  • Ricardian critics observed that instead of investing this surplus back into the land to improve agriculture (as Cornwallis had hoped), the zamindars became rentiers-a leisure class living off the rent without contributing to production. They merely leased out land and collected the surplus, depriving the state of its legitimate revenue and failing to improve agricultural productivity.
• Conclusion: Consequently, British officials considered the Permanent Settlement a failure because it prevented the state from capturing the increasing value of the land and fostered a parasitic class of landlords rather than capitalist farmers. This thinking heavily influenced the shift toward the Ryotwari and Mahalwari systems, which allowed for periodic revision of revenue assessments.

Key Takeaway:
The Ricardian critique argued that the Permanent Settlement resulted in a loss of revenue for the state and created idle rentiers (zamindars) who did not invest in land improvement, contrary to the original expectations of the policy.