Economic Policy and the True Believer: The Use of Ricardian Rent Theory in the Bombay Survey and Settlement System

Abstract

The classical political economists, especially James Mill, had a major role in shaping British land tax policy in India. Only in Bombay Presidency did the men who administered the land tax share Mill's view of rent as the legitimate and appropriate source of revenue for government expenditure. These men created a land tax of considerable complexity in their desire to collect only a part of the rent from each field and thereby to foster economic development in the region. Even with their cadastral survey completed, however, they were compelled to use circumstantial evidence to determine whether any particular level of taxation was less than or greater than the rent. Agriculture in the Deccan and the Karnatak did improve after the implementation of the survey and settlement system, but available evidence suggests that rising prices for agricultural goods may have been as or more important than careful adherence to the finer points of Ricardian rent theory.