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present capabilities ; and it will be a question whether, when 

 the term of the present settlement expires, these lands will be 

 allowed to pay pepper corn assessments, if they should, in the 

 meanwhile, have been brought under cultivation. The same 

 considerations will apply to large estates containing waste 

 lands brought under the settlement now in progress in the 

 South Oanara and Malabar districts. Under the 2nd head, 

 increased produce due to improvements effected by Govern- 

 ment, such as the construction of irrigation works, will be 

 charged for by the imposition of a water-rate. The increased 

 produce arising from the improvements effected by the land- 

 owners at their own expense is, of course, to be left entirely 

 untaxed. These improvements consist chiefly of wells and 

 other works for irrigation, and the rule of freedom from 

 taxation as regards these, has indeed been scrupulously 

 observed in this Presidency since 1850 ; and reductions of 

 assessment amounting to several lakhs of rupees have been 

 granted on lands irrigated by works constructed prior to that 

 date. In Upper India and Bombay, however, a less liberal 

 policy appears to have prevailed till a very recent dat(^. It 

 further appears that in Upper India, the gradual enhancement 

 of value of land effected by improvement in the system of 

 cultivation and increased application of labour and skill to 

 the operations of tillage by the agricultural classes had formed 

 an important item in the increment of revenue obtained by 

 new assessments. The Government of India has relinquished 

 the right to tax improvements of this kind, being convinced 

 that it is false economy to discourage in any way the employ- 

 ment of such increased skill and labour. It is under the 8rd 

 head, viz., the rise in prices, that an enhancement of assess- 

 ments at periodical revisions of settlement is to be mainly 

 looked for. Even here it is not every rise of prices, however 

 small, that is to form a ground for enhancement ; nor is the 

 assessment to be enhanced in full proportion to the rise in 

 prices. There should be a substantial rise in prices to justify 

 an enhancement, and the Government of India has also 

 directed that at each periodical revision a margin, say 15 per 

 cent., of the profits arising from increase of prices, should be 

 left untouched " with the view both of raising the standard 

 of living among the agricultural classes, and of meeting the 

 increasing cost of labour, stock and implements." In cases 

 in which there is a fall in prices and the assessments fixed 

 become on this account really oppressive, remissions or sus' 

 pensions of revenue are to be granted at the discretion of 

 Government, as the circumstances of the case might require. 

 Under the 4th head, the most important consideration is the 



