HIDAYATULLAH NATIONAL LAW UNIVERSITY

RAIPUR (C.G)

PUBLIC POLICY PROCESS

PROJECT ON
LAND REFORM LAWS IN INDIA A CRITICAL ANALYSIS

SUBMITTED TO

DR. AVINASH SAMAL

BY

Prateek Pandey

SEMESTER VI

SECTION- B

ROLL NO.118

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 INTRODUCTION

Land reform usually refers to redistribution of land from the rich to the poor. More broadly, it
includes regulation of ownership, operation, leasing, sales, and inheritance of land (indeed, the
redistribution of land itself requires legal changes). In an agrarian economy like India with great
scarcity, and an unequal distribution, of land, coupled with a large mass of the rural population
below the poverty line, there are compelling economic and political arguments for land reform.
Not surprisingly, it received top priority on the policy agenda at the time of Independence. In the
decades following independence India passed a significant body of land reform legislation. The
1949 Constitution left the adoption and implementation of land and tenancy reforms to state
governments. This led to a lot of variation in the implementation of these reforms across states and
over time, a fact that has been utilized in empirical studies trying to understand the causes and
effects of land reform. In this essay, we will briefly discuss the economic and political arguments
in favour of land reform, and review the Indian evidence on the effects of land reform on
agricultural productivity and poverty, and economic and political determinants of the speed and
intensity of implementation of land reforms.

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 Chapter 1. Economic Arguments in favour of Land Reforms

The most obvious argument in favour of land reform is equity. In a land-scarce country with a
significant section of the rural population below the poverty line, the case for ensuring that
everyone has access to some minimum amount of land seems compelling from this point of view.
However, this is a general argument in favour of redistribution, not necessarily redistribution in
kind (i.e., land). To make that case, one needs to understand the economic forces that govern the
allocation of land. We begin with two empirical observations. First, small farms tend to be more
productive than large farms. This inverse farm-size productivity relationship is widely documented
(see Banerjee, 1999 for a review of the literature). Another empirical regularity is that owner-
cultivated plots of land tend to be more productive than those under sharecropping tenancy
(Shaban, 1987). Given these observations, one could make an argument in favour of land reform
based not only on equity considerations, but also on efficiency considerations. For example, the
inverse relationship between farm size and productivity suggests that land reform could raise
productivity by breaking (less productive) large farms into several (more productive) small farms.
Also, lower productivity under sharecropping suggests that land reform could raise productivity by
converting sharecroppers into owner-cultivators. But this raises the question as to what prevents
market forces from getting rid of the asymmetry and the resultant inefficiency? Saying that the
inverse farm-size productivity relationship is driven by diminishing returns is not satisfactory,
since that assumes that land cannot be sold or leased. For example, if a small farmer is more
productive, and a large farmer less productive, then the latter would be better off leasing some
land to the former. Similarly, if sharecropping is inefficient relative to owner-cultivation, a
landlord should sell the land to the sharecropper to make him an owner-cultivator, and get a share
of the resulting productivity gains. Clearly, an explanation of these facts must be based on some
frictions in the operation of the land market, or some other input relevant for agricultural
production. A leading explanation of both these facts is based on incentives. A small farmer
cultivates his land with own and family labour, while a large landowner uses hired labour who
have lower incentives to put in effort. Similarly, a sharecropper effectively faces an income tax of
50% (the most commonly observed sharing rule in the absence of tenancy legislation being 50:50)
and naturally puts in less effort. This however, raises a deeper question: why cannot these parties
design contracts that would get rid of the incentive problem? A key assumption here is that some
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inputs, such as effort, care and maintenance of land, are inherently difficult to monitor. As a result,
unless the party that is supplying these inputs are full residual claimants (i.e., retain 100% of the
profits) they will undersupply these inputs. A landowner can offer a contract that has this property:
a fixed rent contract. This says the landlord simply gets a fixed fee, and the tenant keeps all the
residual earnings. If everyone lived for one period, this would be equivalent to selling the land to
the tenant. However, if the tenant is poor, then even though this contractual arrangement would be
efficient, it might not be in a landlord’s interest to do so. Consider a simple example. Suppose
given the scarcity of land, the fixed rent that would induce the landlord to lease out a given plot of
land is Rs. 100. However, since the tenant is poor and does not have enough liquid wealth, he may
not be able to pay this rent up front, or guarantee to pay it irrespective of whether the output is
high or low. He may be able to pay a guaranteed fixed rent of only Rs. 50. It is in the landlord’s
interest then to ask for a share of output, even though that would reduce effort, since he gets a
higher expected rent. He would not ask for too high a share of output though, since at some point
reduced effort would start reducing his expected rent (this is like the Laffer curve in the context of
income taxes: if tax rates are too high, cutting taxes may actually raise revenue via increased
labour supply). This rent extraction vs. incentives trade-off (see Banerjee, Gertler and Ghatak,
2002 for a formal analysis) can explain the persistence of inefficiency in the land market. This
would explain both the stylized facts mentioned above, and why market forces will not necessarily
get rid of the implied productivity losses. An alternative form of friction that can explain these
facts is that, due to an imperfect legal system, the market for land does not operate well. For
example, if leasing out land entails a risk that it might be hard to evict the tenant if the landowner
wishes to withdraw land for owner-cultivation at some later point, then the land leasing market
would not work well. Indeed, in their cross-state analysis of tenancy laws in India, Conning and
Robinson (2005) show that tenancy laws, though designed with the aim of helping tenants,
actually reduced the extent of tenancy. So far we did not consider the issue of heterogeneity of
farmers in terms of ability, and of and in terms of soil quality. For example, a key econometric
concern is whether the empirical observations mentioned above control for unobserved
heterogeneity. If these observations are purely driven by unobserved variations in farmer quality
or land quality then the efficiency case for land reform is weakened. For example, if higher ability
farmers prefer to cultivate smaller plots of land (as opposed to being constrained to do so) or
landowners prefer to lease out lower quality plots to sharecroppers, then in the absence of any
other frictions such as those mentioned above, land reform will not raise average productivity.
However, there is some evidence (e.g., Rosenzweig and Binswanger, 1993 on farm size and
productivity, and Shaban, 1987 on sharecropping) to suggest that these empirical facts are not
purely driven by heterogeneity in farmer quality or land quality. For example, Shaban (1987)

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finds, after controlling for land quality, that the same farmer puts in less effort in plots of land that
he cultivates as a sharecropper compared to plots of land that he cultivates as an owner-cultivator.
To sum up, incentive problems and imperfect property rights are the leading explanations for the
distortions in the allocation of land. These arguments imply that land reform will raise
productivity as well as serve the goal of equity. As a matter of fact, redistributive policies that fall
short of full-scale land reform can also have positive productivity effects. These include policies
that increase- the wealth or income of the rural poor or their bargaining power vis-à-vis
landowners (Banerjee, Gertler, and Ghatak, 2002 refer to these as empowerment strategies). Given
that the loss of efficiency is due to the trade-off between rent extraction and incentive provision,
any strategy that reduces the ability of landowners to extract rents will raise efficiency, even if
they fall short of land reform, and will also serve the goal of equity. However, some of these
strategies, such as regulation of tenancy, might have a negative effect from the point of view of
reducing the incentive of landowners to lease out land. This is likely to be a particularly important
concern for poorly-implemented tenancy reform legislation: the presence of the tenancy law
would have the negative effect on the land lease market as described above, and at the same time
the positive incentive effect on tenants may only be partially realized. We will return to this point
in our discussion of empirical work on land reform in India. The above arguments also suggest
that even if equity is the only consideration, there may be a case for redistribution of land as
opposed to any other form of redistribution. For example, if, because of imperfect property rights
the market for land sales and rental is very thin, then a direct intervention in the land allocation
method may be required to improve the conditions of the rural poor. This would typically require a
combination of reforming property rights in land (e.g., formalization of land records and legal
protection of ownership rights) and redistribution (stipulating a land ceiling and redistributing
surplus land).

CHAPTER 2: INDIAN EVIDENCE ON THE CAUSES AND EFFECTS OF

LAND REFORMS
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The two key empirical questions are: what is the effect of land reform on productivity and poverty,
and what are the factors that drive its success? These are clearly interdependent: factors that affect
the success of land reform are also likely to affect productivity and poverty. For example, if a left-
wing administration comes to power, as it did in Kerala and West Bengal, it will implement land
reforms more actively and also implement other reforms (e.g., empowering local governments)
that might have a direct effect on productivity and poverty. The challenge is to isolate the effect of
land reforms. Land reform legislation in India consisted of four main categories: abolition of
intermediaries who were rent collectors under the pre-Independence land revenue system; tenancy
regulation that attempts to improve the contractual terms faced by tenants, including crop shares
and security of tenure; a ceiling on landholdings with a view to redistributing surplus land to the
landless; and finally, attempts to consolidate disparate landholdings.3 Abolition of intermediaries
is generally agreed to be one component of land reforms that has been relatively successful. The
record in terms of the other components is mixed and varies across states and over time.
Landowners naturally resisted the implementation of these reforms by directly using their political
clout and also by using various methods of evasion and coercion, which included registering their
own land under names of different relatives to bypass the ceiling, and shuffling tenants around
different plots of land, so that they would not acquire incumbency rights as stipulated in the
tenancy law. The success of land reform has been driven by the political will of specific state
administrations, the notable achievers being the left-wing administrations in Kerala and West
Bengal. Besley and Burgess (2000) have used state-level data for the sixteen major Indian states
from 1958 to 1992 and exploited the variation across states and over time in land reform
legislation to identify the effect of land reform on productivity and poverty. They generate a
cumulative variable that aggregates the number of legislative reforms to date in any particular
state. Controlling for state and year fixed effects, and a number of time varying economic and
policy variables, they find that the lagged version of their cumulative land reform variable has had
a negative and significant effect on poverty. Interestingly, they find that this is due primarily to the
tenancy reform component of land reform. However, this also seems to have had a negative effect
on agricultural productivity, suggesting an equity-efficiency trade-off. Abolition of intermediaries
had a negative effect on poverty, but no effect on productivity. Imposing a ceiling on landholdings
does not seem to have had much effect on either poverty or productivity, while land consolidation
had a positive effect on productivity without having any effect on poverty. The authors conclude
that land reforms did not have much effect on the distribution of land and seems to have operated
mainly through altering the contractual relations in agriculture. The previous study takes land
reform legislation as the measure of land reform, and not its implementation. Given the widely

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acknowledged gap between the two, one concern is that, as discussed in the previous section, a
poorly implemented tenancy reform may have a net negative effect on productivity by freezing up
the land lease market even though it might improve the productivity as well as the income of some
tenants. Indeed, a study by Banerjee, Gertler and Ghatak (2002) that focuses on West Bengal, a
state where tenancy reforms were implemented very thoroughly, yields very different conclusions:
tenancy reforms improved agricultural productivity. Within a year of being elected in 1977, the
left-wing administration launched Operation Barga, a program designed to implement and enforce
the long-dormant agricultural tenancy laws that regulated rents and security of tenure of
sharecroppers. Under these laws, if tenants registered with the Department of Land Revenue, they
would be entitled to permanent and inheritable tenure on the land they sharecropped as long as
they paid the landlord at least 25 percent of output as rent. In the decade following the launching
of Operation Barga, there was a significant improvement in the terms of tenants’ contracts and
more secure tenure. The authors use two different approaches to estimate the effect of this reform
on agricultural productivity. Their first approach is to compare the growth in productivity in West
Bengal districts with that in the districts in the neighboring country of Bangladesh. Except for
religion and political boundaries, the two regions are very similar in most respects. This includes
agro-climatic conditions, prevalence of tenancy, and agricultural technology and so we can expect
technological shocks to agricultural yields to be similar between these two regions. Indeed, during
this period agricultural productivity in both regions (and much of Eastern India) grew in part due
to the belated arrival of the Green Revolution permitted by the spread of a locally suited high yield
variety (HYV) of rice, a fall in the price of fertilizers, and an increase in small scale private
irrigation. However, the authors find that even though the rate of adoption of HYV rice was faster
in Bangladesh than in West Bengal, the rate of growth in rice productivity was higher in West
Bengal. They attribute this difference to the implementation of tenancy reform. There are two
concerns with this approach: first, there are some concerns that the date collection method
concerning agricultural production underwent some changes under the new administration that
could have inflated West Bengal’s growth performance relative to Bangladesh. Also, during this
period a number of other policy reforms were undertaken in West Bengal, such as decentralization
of certain public programs, and this approach could be picking up the effects of these other
policies. The second approach utilizes the fact that this reform was implemented in different
districts of West Bengal at different rates due to bureaucratic frictions. The authors use inter-
district variations in the rate of implementation of this program (captured by the fraction of
sharecroppers who were registered under this program) as exogenous changes in the availability of
a new contractual regime. That is, districts that received the program earlier are the "treatment"
districts and the districts that received it later are the "control" districts. The resulting changes in

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productivity are attributed to the reform, after controlling for a number of other policy and
economic variables that also changed during the period when the program was implemented.
Since this approach studies inter-district variation in agricultural productivity, it is not likely to be
affected by concerns about any possible upward bias in the level of agricultural productivity due to
changes in the data collection methods. Also, since it looks at variation in the intensity of
implementation of tenancy reform, its less likely to pick up the effect of other programs. This
approach yields similar results regarding the effect of tenancy reform on agricultural productivity
as the previous one, suggesting that tenancy reform did have a positive effect on agricultural
productivity. To sum up, it seems likely from the above studies that tenancy reform had a direct
positive effect on tenants who were directly affected by it, but the indirect effects of this reform on
the rural land market as a whole are less clear. This explains why Besley and Burgess (2000) find
a negative effect of tenancy reform on rural poverty and Banerjee, Gertler, and Ghatak (2002) find
a positive effect on agricultural productivity. However, both the above studies are based on
aggregate data (state or district level) and cannot distinguish between the direct and indirect effects
of land reform. Only micro-level studies can throw more light on this question. So far we
discussed the effects of land reform. Now we turn to the question of what determines its success.
Besley and Burgess (2000) find that political factors had a significant effect. In particular,
Congress administrations had a negative effect on the passing of land reform legislation,
especially tenancy reform. In contrast, left-wing administrations had a significant positive effect.
Besley and Burgess use these political variables as instruments for their land reform measure to
address the concern that land reform is endogenous and could be driven by factors that also affect
the dependent variables of interest. Conning and Robinson (2005) pursue further the investigation
of determinants of land reform and find that, after controlling for other variables including state
and year effects, the likelihood of reforms increases when land inequality is higher and where
peasants have greater political power. Bardhan and Mookherjee (2005) study village-level data
from West Bengal and find that land reform activity is highest where left-wing parties hold a
larger number of seats in the state legislature and, interestingly, where they faced greater political
competition. To sum up, land reform is clearly driven by political factors. One important
ingredient is the strength of left-wing parties in the state. We can think of the support for left-wing
parties as “demand” for land reform. The “supply” of land reform seems to depend on the electoral
success of left-wing parties, as well as how tight the electoral competition is.

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 CHAPTER 3: LAND REFORM MEASURES AFTER INDEPENDENCE

1. Abolition of Intermediateries

Intermediaries like Zamindars, Talukdars, Jagirs and Inams had dominated the agricultural sector

in India by the time the country attained independence. Quite naturally top priority was accorded

to the abolition of intermediary tenures. Congress had long ago been committed to the idea of the

removal of intermediaries between the peasant and State.

Soon after independence, measures for the abolition of the Zamindari system were adopted in

different states. The first Act to abolish intermediaries was passed in Madras in 1948. Since then,

state after state passed legislation abolishing Zamindari rights. The Orissa Estates Abolition Act

was passed in 1951. By 1955, the progress for the abolition of intermediaries had been completed

in almost all the states.

The abolition of intermediaries has both advantages and disadvantages.

Advantages:

(a) As a result of the abolition of intermediaries, about 2 crore tenants are estimated to have come
into direct contact with the State making them owners of land.

(b) The abolition of intermediaries has led to the end of a parasite class. More lands have been

brought to government possession for distribution to landless farmers.

(c) A considerable area of cultivable waste land and private forests belonging to the intermediaries

has been vested in the State.

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Disadvantages:

(a) Abolition of intermediaries has resulted in a heavy burden on the state exchequer .The ex-

intermediaries have been given a compensation amounting to Rs. 670 crores in cash and in bonds.

(b) It has led to large-scale eviction. Large-scale eviction, in turn, has given rise to several

problems – social, economic, administrative and legal.

(c) Instead of the abolition of the official land-lords, absentee land-lords as a class have emerged.

Hence the claim of the official documents pertaining to the abolition of intermediaries has no

logical foundation. The truth is that it changed only its garb.

2. Tenancy Reforms:

Rural India witnesses three types of tenants. They are- (a) permanent or occupancy tenants, (b)

temporary or non-occupancy tenants, and (c) sub-tenants. The permanent tenants have the

permanent ownership right over the land. The rent for permanent tenants is fixed. The right to

cultivate land goes from generation to generation so long as they pay rent. Hence land is

inheritable. Because of such security of holding, the occupancy tenants make improvement on

their land. They are almost the owners of land, as they can mortgage or sell their land.

There is hardly any difference between the peasant-proprietors or the owners of land and

occupancy tenants. The only difference is that while the owners pay the rent to the government,

the occupancy tenant pays it to the land-lord.

Temporary or non-occupancy tenants have no right to cultivate the land permanently. They can be

evicted from land on minor pretexts. In their case, rent is too high. It may be increased

arbitrarily. They do not make any improvement on the land for the fear of eviction.

Sub-tenants are the tenants who cultivate the land of the big land owners. They cultivate land only

on lease basis. The leases are rather oral. These can be changed at will. They pay rent either in

cash or in share of the product. In any case the rent is exorbitant.

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There is no security of tenure. Their position is not only weak and insecure but also pitiable.

According to the National Sample Survey (8th round) 20 per cent of land is under the tenancy-at-

will and sub-tenancy.

It is not at all possible to put an end to the tenancy system. But it can be mended so as to be

acceptable from the social as well as economic point of view. The tenancy reforms in various

states have three important features, though the provisions are not similar in all cases.

These are- (i) security of tenure for the tenants, (ii) fixation of fair rent and (iii) grant of ownership

rights to certain types of tenants.

(i) Security of tenure:

Sir Arthur Young rightly observed: “Give a man the secure possession of a bleak rock and he will

turn it into a garden; give him a nine years lease of a garden and he converts it into a desert.” This

remark very pithily sums up the need for providing security of tenure. Security of tenure creates

interest among the cultivators for improving their land. Further, it helps in attaining two basic

objectives of land reforms namely increase in productivity and promotion of social justice.

To protect tenants from ejectment and to grant them permanent rights on lands, laws have been

enacted in most of the states. They have three essential features.

(a) Tenants cannot be evicted without any reason. They can be evicted only in accordance with the

laws.

(b) Land can be resumed by the landlord only on the ground of personal cultivation. But the land-

lord can resume the land only up to a maximum limit.

(c) The landlord should leave some area to the tenant for his own cultivation. The tenant in no case

should be made landless.

However, tenancy legislations in India are not uniform throughout the country. Each state has its

own legislation. In Orissa, a limit has been imposed on the landlords for resuming land for

personal cultivation.

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(ii) Regulation of Rent:

In Pre-Independent India rents were high for obvious reasons. A number of factors such as

defective land tenure systems, pressure of population on land, absence of non-farm employment

opportunities and the apathetic and lukewarm attitude of the government towards the tenants’

interest were responsible for the continuous rise in rents. Fifty per cent of the total produce was

paid as rent.

In some areas the rent was as high as 70 per cent. In addition to such high rent, the tenant had to

provide certain free services to landlords. This was called Bethi and Beggary in Orissa. So at the

beginning of the First Plan, the Central Government insisted on the regulation of high rent by State

Governments. It was laid down that the rent to be paid to the landlord should not be more than 20

to 25 per cent.

Accordingly, different State Governments passed tenancy legislations to regulate rent. The main

objective of such Acts was to make the rent fair and reasonable. However, the maximum rent

differs from state to state. For example, while in Orissa and Bihar the rent is fixed at l/4th of the

gross produce, in Punjab it is one third and in Rajasthan it is one-sixth of the gross produce. The

rates also vary within the state because of the difference in the fertility of land.

(iii) Right of ownership:

So far as right of ownership is concerned, tenants have been declared as the owners of the land

they cultivate. They have to pay compensation to the owners. The amount of compensation should

not exceed the level of fair rent.

In some states provisions have been made allowing the tenant to purchase the leased land on

payment of a price to the landlord. If any dispute arises between the tenant and the landlord over

the payment of price, this may be referred to a land tribunal. The tribunal will decide the price to

be paid by the tenant to the landlord.

As a result of these measures about 40 lakh tenants have already acquired ownership rights over

37 lakh hectares of land. They have become better-off economically and socially.

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In several states, in the matter of tenancy reform, legislation falls short of the accepted policy.

What is even worse, the implementation of the enacted laws has been half-hearted, halting and

unsatisfactory in part of the country. The legal protection granted to tenants has often been

ineffective.

3. Ceiling on land holdings:

The third important step of land reforms relates to the imposition of ceiling on land holdings.

Ceiling on land holdings implies the fixing of the maximum amount of land that an individual or

family can possess. Land ceiling has two aspects: one, the fixation of ceiling limit and two, the

acquisition Ma of surplus land and its distribution among the small farmers and landless workers.

The imposition of ceiling on agricultural holding is preeminently a redistributive measure. Prof.

Gadgo rightly observes, “Among all resources, the supply of land is the most limited and the

claimants for its possession are extremely numerous. It is, therefore, obviously unjust to allow the

exploitation of any large Q surface of land by a single individual unless other overwhelming

reasons make this highly desirable”.

The almost compelling case of land ceiling arises from the absolute and permanent shortage of

land in relation to the population dependent on it, the limited prospect of transfer of population to

non-agricultural occupations or and the need to step up production along with increase in

employment.

Economic Rationality of Land Ceiling:

According to some economists small farms are more efficient than large farms. Prof. C. H.

Hanumatha held the view that small farms provide more employment opportunities. They require

less capital compared to the large farms. He further added that small farms can be made into large

farms through cooperative effort so as to have scale economies.

Social Rationality of Land Ceiling:

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In a poor country like India the supply of land is limited and number of claimants is large. Hence

it is socially unjust to allow small number of people to hold large part of land. Such condition is

against the justice, equality and prosperity of the majority of the people.

It is socially justifiable to impose ceilings on land and distribute it to the actual users of land,

making the tenants as the owners. In this way, ceilings on land holdings can go a long way in

raising income and bringing prosperity of the toiling masses in the country.

Ceiling legislations in India have been enacted and implemented in all states in two phases. The

first phase continued upto 1972. The second phase started from 1972. The important provisions of

ceiling legislations constitute (a) unit of application; (b) upper limit for land holdings; (c)

exemption and (d) availability of surplus land and its distribution.

(a) Unit of application:

In the first phase, i.e., prior to 1972, the basis of ceiling fixation was an individual as a unit instead

of a family.

Since 1972, a family has been accepted as the unit of application of ceilings. The family is defined

as a unit consisting of husband, wife and children.

(b) Upper limit for land holding:

In the first phase there were wide variations in the ceilings on land holdings. Different states fixed

different upper limits for land holdings. For example, in Andhra Pradesh, the limit of ceiling

varied from 27 to 216 acres. In Rajasthan it varied from 22 to 366 acres.

Under the new revised policy, the upper limit of ceiling has been lowered. For example, for lands

which have assured supply of water and where at least two crops are raised, the upper limit has

been fixed at 10 to 18 acres depending on the productivity of the land. In areas where there is

irrigation provision only for one crop, the ceiling has been fixed at 27 acres. However, for the

remaining types of land, the ceiling limit is fixed at 54 acres.

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(c) Exemptions:

Certain types of land were exempted from ceiling laws. Among the types of land exempted were

orchards, grazing lands, sugar-cane fields of sugar” factories, cooperative farms etc.

(d) Surplus land and its distribution:

The progress in respect of surplus land and its distribution has been quite unsatisfactory. The sixth

plan target was that the entire surplus land was to be taken possession of and distributed by 1982-

83. But this is far from being achieved still.

A number of factors such as illegal transfer of land, judicial interventions, loopholes in ceiling

laws, non-availability of land records, inefficient administration, political pressure etc. account for

the failure of the land ceiling. Prof. M.L. Dantwala rightly observed, “By and large, land reforms

in India enacted so far ……. are in the right direction, and yet due to lack of implementation the

actual results are far from satisfactory.”

4. Consolidation of Holdings:

Consolidation of Holdings means bringing together the various small plots of land of a farmer

scattered all over the village as one compact block, either through purchase or exchange of land

with others. The average size of holdings in India is very small. The size of the holdings is

decreasing but number of holdings is increasing over time. This is due to the inheritance laws.

The inevitable consequence of this inheritance law is that farms are being subdivided and

fragmented with every passing generation. Further there is a decline of joint family system which

was prevailing in earlier period.

Nuclear family system is now leading to sub-division and fragmentation of holdings. Subdivision

and fragmentation of holdings results in several disadvantages such as wastage of land, difficulties

in land management, difficulty in the adoption of new technology, disputes over boundaries,

disguised unemployment, low productivity etc.

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Advantages of Consolidation of Holdings:

Consolidation of holdings has several advantages. They are as follows:

(a) It prevents the endless subdivision and fragmentation of land holdings.

(b) It saves the time and labour of a farmer.

(c)It effect improvement on land in the form of bunding, fencing etc.

(d) It promotes large-scale cultivation.

(e) It brings down the cost of cultivation and reduces litigation among farmers.

Attempts have been made in India for consolidation of holdings long before independence in some

areas. It formed an integral part of our land reforms policy since the inception of on the Planning

in 1951. However, as yet 15 of the 25 states in the comp country have passed laws in respect of

consolidation of holdings.

In Orissa, the Consolidation Act was passed in 1972. The work of consolidation has been

completed fully in Punjab and Haryana. Considerable progress has also been made in the states of

Uttar Pradesh, Bihar, Gujarat and Karnataka. So far 51.8 million hectares of land have been

consolidated in the country. This is about one- third of the total cultivated land.

There are various obstacles to the speedy implementation of the consolidation programme. These

are poor response from cultivators, wide variation in the quality of land, complicated process of

land consolidation, lack of enforcing machinery, lack of political will etc.

5. Co-operative farming:

It has been advocated to solve the problems of sub-division and fragmentation of holdings. In this

system, farmers pool their small holdings for the purpose of cultivation and reap benefits of large

scale farming. The advantages of scientific farming, adopting the new potential technologies can

be reaped; co-operative farming lays the foundation of strong democracy, self-help and mutual

help. In the Indian context joint co-operative farms and service co-operatives are mostly

observable.

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Co-operative farming in India has largely been a failure. The reason is not far to seek. The farmer

in India has not been properly socialised in the cooperative system. Again, the attitude of the

bureaucrats towards cooperative farming is not favourable.

6. Bhoodan Movement:

The Bhoodan Movement was spearheaded by Acharya Vinoba Bhabe. He collected land from the

rich landlords and distributed that to the landless. About 4.2 million acres of land were received

under Bhoodan, but so far only about 1.3 million acres have been distributed.

7. Compilation and updating of land records:

Compilation and updating of the land records are an essential condition for the effective

implementation of land reforms programme. In recent years the states have been urged to take all

measures for updating land records with the utmost urgency by adopting a time-bound

programme. Efforts are also being made to maintain the land records through computerization.

Causes of failure of land reforms:

There are a number of causes for the failure of the programmes of land reforms. They are as

follows:

1. Undue advance publicity and delay in enacting land laws:

Much publicity has been given in advance by the leaders of the ruling party to the proposed land

reforms after independence. Again, the time taken for a bill to become an Act in many states has
been unusually long.

This has enabled the landowners to make necessary adjustments so as to be able to evade various

provisions of land reform legislation. According to the World Bank, “We have, for an unduly long

time, continued to preach land reforms rather than practise them and this has proved

counterproductive.”

2. Loose definition of the term “personal cultivation”:

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The term “Personal cultivation’ is quite loose. One could resume land for personal cultivation

under the definition even while sitting at a distance of 200 miles. The Zamindars have been

permitted to possess substantial areas of land for cultivation. Again, the laws have provided for

many exemptions in the form of land awarded for gallantry, land under orchards, tea estates, well-

run farms etc.

There are instances when people have availed benefits from some of these concessions, e.g.,

exemption on the basic of the land being under orchard, by growing only a few berry trees in a

particular plot. In this way, loose definition of the term “Personal cultivation’ has given chances to

Zamindars to eject large areas of land by defying the law.

3. Optional nature of the laws:

Most of the laws granting ownership rights to tenants are not mandatory. They are rather optimal.

The tenants have to move the government for grant of ownership rights. They will not get them

automatically. On many occasions, tenants hesitate to approach the law courts for this purpose

merely out of fear of the landlords.

Cohen rightly observes, “The existing lower or weak position of the tenant would not have been a

handicap in the amelioration of his conditions if the law had been a bit kind to him. The law drags

him into the court on every occasion”.

4. Malafide transfer of land:

To escape the laws relating to land ceilings, the Zamindars have indulged in large scale transfer of

land to their family members or kinsmen. Such Malafide transactions do not make any change in

the operational aspect of agriculture.

5. Lack of social consciousness among the tenants:

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Prof. Khusro in his study entitled “Economic and Social Effects of Jagirdari Abolition’ has

emphasised the importance of social consciousness of the tenants as a factor responsible for the

successful implementation of land reforms.

The capacity of the tenants to fight for their right also counts a lot in the context of land reforms.

M.L. Dantwala rightly observed, “Large holders, articulate and capable, organised pressure in

defence of their interests and the small cultivators and the landless were not only unorganised but

in most cases, ignorant of legal and constitutional process; the former were very often successful

in getting the land reforms modified or even nullified both at the stage of legislation as well as

implementation”.

6. State side with the big farmers:

N. C. Saxena has rightly observed that the state governments which control the land operations

have moved favourably towards the big farmers. The interests of the small farmers have been

vitally affected.

7. Lack of strong political will:

The programme of land reforms necessitates adequate political desire, zeal and support. But

unfortunately the political leaders only wear a mask of progressive socialistic outlook. In this

regard, the report of the Task Force on Agrarian Relations deserves mention. The report says

“Enactment of progressive measures of land reforms and their efficient implementation call for

hard political decisions and effective political support, direction and control”.

But in reality, this important factor is lacking and often standing in its way. The lack of political

will is amply demonstrated by the large gaps between policy and legislation and between law and

its implementation.

In no sphere of public activity in our country since independence has the hiatus between precept

and practice, between policy pronouncements and actual execution been as great in the domain of

land reforms.

8. Bureaucratic corruption:

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It is an acknowledged fact that whenever some honest officials implement the laws relating to land

reforms sincerely, they incur the wrath of the political leaders who ultimately put them in

unnecessary difficulties.

Land reforms provide a golden opportunity to the Patwari and other functionaries of the Revenue

Department to make money. Again in many cases the highly placed officials are themselves

landlords.

Moreover, the lands which are acquired to be distributed among landless farmers are engrabed by

the politicians and bureaucrats at cheap rate. Indian Rural Development Report (1999) rightly

observes, “It is paradoxical that a bureaucracy created to govern a colonial feudal system was

entrusted to implement agrarian reform and element of all those policies which were inherently

anti-feudal, progressive and democratic”.

9. Surplus land is fallow and uncultivable land:

The holders of surplus land manipulate the land data in such a way that the land in excess in their

possession is usually barren and uncultivable. Such a surplus land does not yield any benefit to the

landless peasants. In this way the very purpose of land reforms legislation is defeated.

10. Absence of records:

Absence of records regarding ownership and possession of land and about its actual cultivators
stands in the way of properly identifying the beneficiaries of land reforms.

11. Lack of uniformity in land reforms laws:

Land reforms laws are not uniform throughout India. They are different in different states. This

also accounts for the slow progress of land reforms measures.

12. Emergence of new agriculture technology:

The new seed-cum-fertilizer technology, for its successful adoption, needs ample resources and

dynamic entrepreneurship. Only large farmers can fulfill these conditions. Hence on this count

many economists have come out in favour of the abolition of ceiling on land holdings.

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A number of remedial measures have been made to remove the difficulties and structural

constraints pertaining to land reforms in India. They are as follows:

1. The definition of personal cultivation in land legislation should be changed keeping in view the

interests of landless farmers.

2. The residential qualification should be made compulsory for holding land.

3. Excess land taken over from big landholders should be distributed expeditiously. To assist the

land reform beneficiaries, there is a strong need to link them for timely supply of inputs and

investment to Jawahar Rozgar Yojana Prime Minister’s Rozgar Yojana.

4. Updating and computerization of land records should be accorded top priority. Necessary funds

should be made available to the states for this purpose. Certified extract of the record should be

issued in the form of updated ” Farmers Passbook’.

5. Special attention should be paid to tribals. All left out agricultural land held by the tribals should

be regularized at the earliest opportunity.

6. No transfer of agricultural land should be permitted to a non-agriculturist.

7. The state should identify wastelands, both public and private, and take up reclamation measures

in these wastelands and distribute them among the poor.

8. Loans should be granted to the farmers under easier terms and conditions so that they can

purchase the lands which are due to them.

9. Joint or community farm management among the marginal land holders and marginal farmers in

the country should be encouraged.

10. The administrative machinery should be kept free from unnecessary political interference and

harassment.

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11. The poor peasants should be provided legal aid upto the level of the Supreme Court. The Lok

Adalats should be empowered to dispose of land reform litigations along with prompt disposal of

cases by rural courts, i.e., Nyaya Panchayat/Rural Nyayalaya.

12. Strong political will should be created so that the government can achieve the goal of

egalitarian society through the instrumentality of land reforms.

13. Landless, small and marginal farmers’ representatives should be given representation in local

Panchayat bodies and ministries so that they are associated at each decision making level.

14. The rural peasants should be made conscious about their on rights through different educative

programmes and media.

15. Peasant organisations should be formed to protect the interests of small and marginal farmers.

Through such organisations they can file claims for conferment of ownership right and can fight

against exploitation.

16. Scientific studies of agrarian structure of different areas separately should be conducted at

regular intervals. Since the problems of one region differ from that of the other, the findings of

these studies should be utilised to bring about a change in desired direction.

In fine, in a country like India characterized by a tradition of inequality and exploitation of the

poor, the land reform measures can “lead to a real burst of enthusiasm, a genuine release of energy

among the working peasantry”. What it needs is the proper implementation of land reforms. There

are two barriers that hinder proper implementation – (i) ignorance of the poor, and (ii) selfishness

of the rich.

In order to remove these hindrances the poor should be motivated through education and

persuasion and the rich should be compelled to cooperate through coercion, it certainly requires a

government with strong political will and a bureaucracy with commitment to achieve the desired

results.

An Overall Appraisal of Land Reforms:

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After more than 60 years of independence, one notices some achievements in the sphere of land
reforms. At the same time, our efforts in this direction have not yielded desired results. Most of the
planks of land reform measures are ambivalent and there are large gaps between policy and
legislation and between legislation and implementation. And “land reform measures were
conceived boldly but were implemented badly”—observed an expert.
The laws for the abolition of intermediaries had been implemented fairly well. As a result, 20
million cultivators were brought into direct relationship with the State. But this reform led to
large-scale ejectment of tenants from land which they had been cultivating for generations as the
laws failed to offer any protection to these masses.

Thus, the slogan “land to the tiller” virtually remained unfulfilled. A class of neo-zamindars or
absentee landlords has sprung up in rural India who grabs the produce of the earth as well as the
land!

It was hoped that tenancy reforms would ensure better results as far as the lot of tenants and
sharecroppers were concerned. Tenancy reforms devised so far have not brought to an end of the
system of absentee ownership of land nor have led to disappearance of tenancies.

Everywhere the immediate consequence was the ejectment of tenants on a massive scale. The
consequence of the tenancy policy was to push tenancies underground. Most of the tenancies that
still exist take the form of informal or concealed crop- sharing arrangements.

Again, there are reports of large-scale evasion of ceiling laws because of non-implementation of
the laws. For instance, in the district of Purnea of Bihar “there are several landowners who own,
and effectively control, at least 1,000 acres each, a few of them owning as many as 5,000
acres…………….. But land records show them to be owning not more than 15 acres—the upper
limit according to the ceiling laws—the rest of land being transferred to mostly benamis (fake
owners).” [C. H. H. Rao]

To sum up, land reform programmes implemented since 1948 have not led to any radical
distribution of land or removal of some of the obstacles to raising agricultural productivity.
Nevertheless, it should not be written off as a non- event’. It brought great changes. It did away
with the numerous layers of parasitic intermediaries in almost all the states.

All the measures listed above, however, have left untouched the bottom layer of the agrarian
structure consisting of agricultural labourers, sharecroppers, except in the states of West Bengal

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and Kerala where left-wing political parties changed the destiny of the poor peasantry vis-a-vis the
jotedars, are poor customers.

CHAPTER 4 : IMPACT OF THE LAND REFORM POLICY

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Land reforms are being attempted for twofold reason: to improve production and productivity and
the distribution of income/asset. Land reform measures are costless methods of increasing
production in the agricultural sector. It serves the purpose of social justice too. Let us see how far
land reform measures have improved productive efficiency of the agricultural sector and ensured
social justice.

i. On productive Efficiency:
So far as productive efficiency is concerned, the land reform measures adopted in recent years
have not made any significant impact. The probable reason is that the reforms have not been
effectively implemented.

The ownership of land has not yet been fully transferred to the tillers. The actual rents still rule
high. The consolidation of holdings has not been completed. Cooperative farming has not made
much headway. In the- absence of economical holding being in actual possession of the tiller, in
which he has a permanent interest, the modern techniques cannot be applied to land. Naturally,
productivity continues to be low.

ii. On Social Justice:

The objective of social justice has, however, been achieved to a considerable degree. The
intermediary rights have been abolished. India no longer presents a picture of feudalism at the top
and serfdom at the bottom. The tenancy laws have given the tillers protection from exploitation by
providing them security of tenure and fixing maximum chargeable rents.

It is true that the pace of implementation of land reform measures has been slow. Moreover, there
is a marked unevenness in respect of progress in various states. This does not, however, mean that
there has been no achievement at all in the sphere of land reform since independence.

But the progress has been slow and it needs to be accelerated. The manifold problems of our land
are to be solved through the introduction of a suitable land policy.

CONCLUSION

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In this paper we reviewed the economic arguments in favour of land reform and showed that they

are based on frictions in the allocation of land. These frictions could either be due to agency costs

or imperfect property rights. We then evaluated the evidence on land reforms in India. The

evidence suggests that land reforms had a negative effect on poverty, while the effect on

productivity is mixed. In states where these measures were strongly implemented, the effect of

land reform on productivity seems positive.

REFERENCES

Banerjee, A.V. (1999): “Prospects and Strategies for Land Reforms”, In B. Pleskovic and J.

Stiglitz (eds), Annual World Bank Conference on Development Economics 1999. Washington,

DC: World Bank, pp. 253-284.

Besley, T. and R. Burgess (2000): “Land Reform, Poverty Reduction, and Growth: Evidence from

India”, Quarterly Journal of Economics, Vol. 115, No. 2, pp. 389-430.

Mrunal.org

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