Passage-1
In introducing the Permanent Settlement, British officials hoped to resolve the problems they had been facing since the conquest of Bengal. By the 1770s, the rural economy in Bengal was in crisis, with recurrent famines and declining agricultural output. Officials felt that agriculture, trade and the revenue resources of the state could all be developed by encouraging investment in agriculture. This could be done by securing rights of property and permanently fixing the rates of revenue demand. If the revenue demand of the state was permanently fixed, then the Company could look forward to a regular flow of revenue, while entrepreneurs could feel sure of earning a profit from their investment, since the state would not siphon it off by increasing its claim. The process, officials hoped, would lead to the emergence of a class of yeomen farmers and rich landowners who would have the capital and enterprise to improve agriculture. Nurtured by the British, this class would also be loyal to the Company. Which of the following statements best reflect the most logical and rational inferences that can be made from the passage?

1. Bengal's agricultural revenue system earlier involved fluctuating revenue demands and insecure property rights, which discouraged long-term investment in agricultural development.
2. Refusal of local entrepreneurs to collaborate with the East India Company on any terms was one of the problems faced by British officials .

Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question

Passage-1
In introducing the Permanent Settlement, British officials hoped to resolve the problems they had been facing since the conquest of Bengal. By the 1770s, the rural economy in Bengal was in crisis, with recurrent famines and declining agricultural output. Officials felt that agriculture, trade and the revenue resources of the state could all be developed by encouraging investment in agriculture. This could be done by securing rights of property and permanently fixing the rates of revenue demand. If the revenue demand of the state was permanently fixed, then the Company could look forward to a regular flow of revenue, while entrepreneurs could feel sure of earning a profit from their investment, since the state would not siphon it off by increasing its claim. The process, officials hoped, would lead to the emergence of a class of yeomen farmers and rich landowners who would have the capital and enterprise to improve agriculture. Nurtured by the British, this class would also be loyal to the Company. Which of the following statements best reflect the most logical and rational inferences that can be made from the passage?

1. Bengal's agricultural revenue system earlier involved fluctuating revenue demands and insecure property rights, which discouraged long-term investment in agricultural development.
2. Refusal of local entrepreneurs to collaborate with the East India Company on any terms was one of the problems faced by British officials .

Select the correct answer using the code given below:
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: The passage mentions, "This could be done by securing rights of property and permanently fixing the rates of revenue demand. If the revenue demand of the state was permanently fixed, then the Company could look forward to a regular flow of revenue, while entrepreneurs could feel sure of earning a profit from their investment". This strongly implies that, prior to it, property rights were insecure and revenue demands were not fixed, creating uncertainty that disincentivized investment.

Statement 2 is not correct: The passage implies a lack of the desired type of entrepreneurial investment due to systemic disincentives, not necessarily a blanket "refusal to collaborate" on any terms. The policy aimed to create conditions for such collaboration and investment.

British Colonial Rule in India

Permanent Settlement in Bengal

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M Question 1	⏱ 0
Passage-1 In introducing the Permanent Settlement, British officials hoped to resolve the problems they had been facing since the conquest of Bengal. By the 1770s, the rural economy in Bengal was in crisis, with recurrent famines and declining agricultural output. Officials felt that agriculture, trade and the revenue resources of the state could all be developed by encouraging investment in agriculture. This could be done by securing rights of property and permanently fixing the rates of revenue demand. If the revenue demand of the state was permanently fixed, then the Company could look forward to a regular flow of revenue, while entrepreneurs could feel sure of earning a profit from their investment, since the state would not siphon it off by increasing its claim. The process, officials hoped, would lead to the emergence of a class of yeomen farmers and rich landowners who would have the capital and enterprise to improve agriculture. Nurtured by the British, this class would also be loyal to the Company. Which of the following statements best reflect the most logical and rational inferences that can be made from the passage? 1. Bengal's agricultural revenue system earlier involved fluctuating revenue demands and insecure property rights, which discouraged long-term investment in agricultural development. 2. Refusal of local entrepreneurs to collaborate with the East India Company on any terms was one of the problems faced by British officials . Select the correct answer using the code given below: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2