CA Foundation · Business Economics · Indian Economy

Which of the following was a key feature of colonial land revenue policy, such as the Permanent Settlement introduced in Bengal in 1793, that adversely affected Indian agriculture?

Under the Permanent Settlement, zamindars became landowners paying a fixed revenue to the state, while cultivators faced high rents and insecure tenure. Neither group had much incentive to invest in improving agriculture, which contributed to stagnation of agricultural productivity in colonial India.

ACultivators were given ownership rights and tax-free land to encourage investment
BThe zamindars were made landowners responsible for fixed revenue payment to the state, while cultivators faced high rents and insecurity, reducing incentives to invest in agricultureCorrect
CThe state directly purchased all crops from farmers at guaranteed prices
DLand revenue was abolished and replaced with an income tax on farmers

Explanation

Under the Permanent Settlement, zamindars were recognised as owners and paid a fixed revenue to the Company. They often extracted high rents from cultivators who had little security, and the zamindars did little for agricultural improvement. Cultivator ownership and guaranteed procurement did not feature in the policy.

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