LAND POLICY
THE LAND PROBLEM The future of land ownership and cultivation constitutes perhaps the most fundamental issue in national development. To a large extent the pattern of economic and social organisation will depend upon the manner in which the land problem is resolved. Sooner or later, the principles and objectives of policy for land cannot but influence policy in other sectors as well.
2. In the three preceding chapters, we have set out at some length the state of the agricultural economy, the approach to agricultural development in relation to the process of national development as a whole, and, finally, the practical implications of the food problem. In this chapter and the next we consider what may be described as the social policy for bringing about those changes in the pattern of production and distribution and in the structure of the rural economy which will serve to establish increasing equality of status and opportunity and, at the same time, help fulfil the targets of agricultural production which are central to the success of the Five Year Plan. In other words, from the aspect of the national economy as a whole, the conclusions to be emphasised are:-
(1) increase of agricultural production represents the highest priority in planning over the next few years; and
(2) the agricultural economy has to be diversified and brought to a much higher level of efficiency.
From the social aspect, which is not less important than the economic, a policy for land may be considered adequate in the measure in which, now and in the coming years, it reduces disparities in wealth and income, eliminates exploitation, provides security for tenant and worker and, finally promises equality of status and opportunity to different sections of the rural population.
3. The achievement of these economic and social aims is as much a part of the purpose of the Five Year Plan as the fulfilment of targets in industry or transport or agriculture. While broad principles and direction of policy can be indicated, it is necessary to remember that the form and manner of their application and the adaptations to which they are subject will differ widely in different parts of the country. In the main, land policy has to be worked out in terms of local needs and conditions. The texture of relationships concerning land, conditions of economic life, the social, composition of rural communities and the pattern of occupational distribution differ widely, so that no generalisation can have more than a limited
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value. Nevertheless, developments in one State are often significant enough to exert influence elsewhere. On account of the abolition of feudal tenures, which is in progress in many States, the system of land holding over the greater part of the country is beginning to approximate in substance to the ryotwari system. Proposals for land reform raise important questions of policy and finance which call for close co-operation and consultation between the Central and State Governments. Even though the pace of land reform and of economic development cannot be the same all over the country, it is desirable that as between different States there should be a broad, common approach in land reform programmes and, as an essential aspect of the implementation of the Five Year Plan, the stages in which land reforms are to be carried out should be worked out by the Central Government and the States.
4. Problems of land,reform may be viewed in two ways, namely, (i) from the point of view of agricultural production and (ii) from the point of view of different interests in the land. The first aspect is the subject of land management legislation, the second of land reform legislation. To fulfil its braoder objectives, land policy should include both elements, for, it is only in an economy in which production and employment expand that the community can realise fully the benefits of changes in the social and economic structure. Although, between the two aspects of policy, there is no conflict of principle, land reform will be fruitful in the measure, in which each step is marked by a balance of emphasis. The main outlines of policy have to be conceived in terms of different interests in land and, at the same time, the effects on production of each measure that may be proposed hive to be foreseen and provided for. The interests in question are: (1) intermediaries, (2) large owners, (3) small and middle owners, (4) tenants-at-will and (5) landless workers. These different interests cannot be considered in isolation from one another, for, any action affecting one interest must either give something to or take something away from one or more of the other interests. As social and economic adjustments affecting individual interests come into effect, a new social structure takes the place of the old. It is best that the period of transition and uncertainty should be short, so that the new social pattern can develop its own organic unity and can begin to evolve from within.
INTERMEDIARY RIGHTS 5. The abolition of intermediary rights has been the major achievement in the field of land reform during the past few years. In varying degrees these rights had a long history behind them and, until quite recently, in some States, they were the essential elements of power in the feudal structure. As a result of the elimination of these rights, in States which had zamindari, jagirdari or other similar tenures, the State has now come into direct contact with the occupier of the land. Zamindari has been abolished in Uttar Pradesh, Madhya Pradesh and Madras and is in the process of abolition in Bihar. Legislation already enacted in Assam and Orissa is shortly expected to be enforced, and West Bengal, which has had serious problems to reckon with since Partition, is engaged in framing legislation for the abolition of zamindari. Legislation for the abolition of jagirdari has been enacted in Rajasthan, Madhya Bharat, Hyderabad and Saurashtra and also in some of the smaller States in Central
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India. It has not yet come into effect, however, except in Hyderabad and Saurashtra. In States such as Bombay, Punjab and PEPSU, elements of superior rights which existed have been eliminated or are in the process of being eliminated. The amendment of Article 31 of the Constitution in 1951 cleared the way for the completion of these reforms
6. Although the abolition of intermediary rights can be described as the completion of one important phase of land reform, two principal problems have not yet been fully solved. These relate to (1) payment of compensation to zamindars and jagirdars, and (2) establishment of the necessary revenue administration. In a number of States compensation is expected to take the form of non-negotiable bonds carrying a rate of interest and repayable within a period which may extend to 40 years. The question arises whether the compensation to be paid could serve to some extent as a source of investment in public enterprises. One suggestion which has been made is that the bonds issued to zamindars, while they remain non-negotiable for periods to be indicated, might be made convertible into shares in projects undertaken by the State Governments concerned or even by the Central Government. The arrangement may have certain advantages both from the side of Government and from the side of the person who converts his compensatory bonds into shares in public enterprises. The suggestion, however, needs to be further examined with reference to conditions in the principal States in which Zamindari has been or is expected to be abolished.
7. The question of revenue records and revenue administration in Zamindari and jagirdari areas is of paramount importance. From information which has been collected from a number of States, it is apparent that the subject needs urgent attention. In the temporarily settled areas, there has long been a framework of revenue administration which, if strengthened, will be capable of assuming new responsibilities consequent upon the abolition of zamindari. In most of the permanently settled areas and in the jagirdari areas, however, there is scarcely any revenue administration on behalf of the Government and the effective implementation of land reforms becomes a matter of some doubt. The responsibilities which a Government assumes with the abolition of zamindari are not confined to the collection of rent, for, important obligations relating to waste lands, forests, fisheries and other miscellaneous rights have to be accepted. We have referred to this aspect already in the chapter on the administration of district development programmes and suggest that the States concerned should give high priority to the solution of administrative problems which arise from the abolition of zamindari and, in particular, to the building up of sound revenue administrations.
8. A revenue administration depends, in the last resort, upon a good system of village records. In States like West Bengal, Bihar, Orissa, Rajasthan and Ajmer, there are scarcely any village records. In Hyderabad and certain other areas, over large tracts, there existed a system of village records maintained by zamindars and jagirdars through their own petty employees. These records were seldom of adequate quality and could not be fully relied upon. Records of rights and other land records become even more important at a time when rapid changes affecting land have become a normal feature of legislative activity. It would not in fact be too much to say that in some States because of defective revenue records the implementation of reforms already enacted will remain incomplete and may even raise new problems which will come in, the way of good administration.
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SUBSTANTIAL OWNERS OF LAND 9. The growth of population and repeated sub-division have led to a system of distribution in land in which large estates are an exception and the vast majority of holdings are relatively small in size. Legislation for the abolition of zamindari and for the protection of tenants has already reduced to some extent the degree of disparity which existed in the distribution of land.
10. Information concerning the distribution and size of holdings is available only to a meagre extent. As a result of an enquiry addressed to State Governments, a certain amount of information which was readily available has been obtained and is given in the annexure to this chapter. Even in States which have an adequate system of land records, the data have to be corrected for the changes which have taken place during recent years on account of the abolition of intermediary rights or the merger of new territories. The data are also defective in that they do not distinguish between cultivated and uncultivated land and, in respect of land under cultivation, between irrigated and unirrigated land. Secondly, they do not indicate the effects of the tenancy legislation of the past few years. Under this legislation large numbers of tenants have acquired either rights of occupancy or of protected tenants and, at the very least, have obtained greater security of tenure. In considering the distribution of land as it exists at present for purposes of policy, it is important to know how much land is under the direct management of owners as distinguished from that held on lease by tenants. Before making other proposals on the subject, the first recommendation which we have to make is that during 1953 all States in India should cooperate in undertaking a census of land holding and cultivation. The lines on which this census should be held and the details of the information which should be secured should be worked out by an expert group and the operations should be so planned that they do not place excessive burden on revenue administrations in the States. In this connection, it may be observed that areas in which village records and the revenue administration are not adequate will present special problems. Unless the preliminary step that we have recommended is taken, we believe that it will be difficult to give practical effect to a number of other steps which remain to be taken in the field of land reform.
11. If allowance is made for factors such as quality of land, area under tenants and the elimination of zamindari and jagirdari rights, the general picture is one of numerous small holdings, a large proportion of them being uneconomic, a small number of middle peasants and a sprinkling of substantial owners. For reasons mentioned above, it is not possible at this stage to indicate the approximate numbers in each group. It is safe to suggest, however, that substantial owners who are directly engaged in managing their land without the intervention of tenants constitute a very small number.
12. If it were the sold object of policy to reduce the holdings of the larger owners with a view to providing for the landless or for increasing the farms of those who now have uneconomic fragments, the facts at present available suggest that these aims are not likely to be achieved in any substantial measure. The question whether some limit should not be placed on the amount of land that an individual may hold has, therefore, to be answered in terms of
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general principles rather than in relation to the possible use that could be made of land in excess of any limit that may be set. We have considered carefully the implications of the various courses of action which are possible. It appears to us that, in relation to land (as also in other sectors of the economy) individual property in excess of any norm that may be proposed has to be justified in terms of public interest, and not merely on grounds of individual rights or claims. We are, therefore , in favour of the principle that there should be an upper limit to the amount of land that an individual may hold.
13 The idea of an upper limit for land has already been given effect to in two different ways, namely, (1) as a limit for future acquisition and (2) as a limit for resumption for personal cultivation. Uttar Pradesh has, for instance, prescribed 30 acres as the limit for future acquisition. Similarly, where land is held by tenants, a land-owner may be permitted to resume up to a prescribed limit for personal cultivation. In Bombay this limit is set at 50 acres, in the Punjab at 50 "standard" acres, in Hyderabad at five times an economic holding, and in Uttar Pradesh, where the tenancy problem and the course of legislation differ from those of ryotwari areas, the limit for resumption is a holding of 8 acres. Although a number of States have not yet imposed limits for future acquisition and for resumption for personal cultivation, We consider that the determination of these limits is an essential step in land reform. Certain areas may, however, present special problems. It may happen, for instance, that in some States there may be a great deal of land requiring reclamation. Reclamation programmes may necessitate long period leases of comparatively fair-sized blocks of land where schemes for State farming or cooperative colonisation may be highly uneconomical or prohibitive in cost. Whether the expression `future acquisition' should also include within its meaning the `right to inherit' needs to be considered from the point of view of legislation for the imposition of estate duties which is now before Parliament. On this subject, therefore, at present we do not make any recommendation.
14. The question how the limit for resumption for personal cultivation or for future acquisition should be determined needs to be considered. In theory, there are five possible criteria with reference to which the limit may be fixed. Thus, the limit may be a varying multiple of (i) land revenue, (ii) value of the gross produce of land, (iii) value of net produce (or income) of land, (iv) sale value of land and (v) lease value of land. Each of these criteria may prove useful in particular circumstances, but their limitations should be appreciated. Apart from the fact that in several parts of the country no land revenue assessment exists, different districts have been assessed at different times and on the basis of varying assumptions as to prices, yields and crop maturities. Comparisons of land revenue rates are, therefore, more valid as between different classes of land within a district than as between different districts assessed at different times and in varying circumstances. Statements about the value of gross produce of land are generally made on rough calculations and are sometimes misleading. The only satisfactory way of calculating the value of gross produce would be to prepare fresh estimates on the basis of a standard series of prices for commodities which go into the produce estimates prepared for different areas during settlement operations. This would be a laborious procedure which could hardly be commended and, frequently, the relevant basic information would not be available. The value of net
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produce for an acre of land is calculated after allowance for expenses of cultivation which may have to be borne by an owner of land as distinct from the tenant. In view of the rapid changes in tenancy conditions which have been and are taking place, it is not possible to use this criterion. On account of tenancy reforms and other factors, the average sale value of different classes of land is also a less useful criterion now than it was in the past. Moreover,a decade of high prices has somewhat distorted the picture. Similar considerations apply to the test of lease value which is further vitiated by the fact that little accurate statistical information covering a sufficient number of instances is, available and also because much of the land is leased on the basis of a share in the crop.
15. In the last analysis any particular method of determining a limit implies an average level of income or, in real terms, an average quantity of agricultural produce which it is proposed should become some kind of maximum for an individual agricultural family. It is sometimes suggested that the fair course would be to determine the maximum holding of land in terms of an average annual income. This would give an accurate measure of the change in the rural social structure which was sought to be brought about and would also ensure that widely different standards for reducing disparities in income were not adopted for the agricultural and nonagricultural sectors in the economic life of the country. There is force in these considerations. It has to be recognised however, that calculations of the amount of land of given quality in any area which may be expected on an average to yield a specified income are subject to so much guess-work that without much more statistical information than is at present available, there are real difficulties in applying the criterion of average income. In actual land reform operations, as the work of resettlement of displaced persons on evacuee agricultural lands shows, there must be considerable flexibility in approach and, considerations of theory apart, it becomes necessary to adopt those criteria which will serve best against the background of the tenures and revenue arrangements peculiar to a State. Within a State, of course, for its different regions, the same criteria have to be followed. As one method of determining a limit, which may often prove applicable in practical work and is fare used by way of illustration, it may be useful to apply a rough and ready criterion such as, for instance, a multiple in terms of what may be regarded as a "family holding" in any given area. A family holding may be defined briefly as being equivalent, according to the local conditions and under the existing conditions of technique, either to a plough unit or to a work unit for a family of average size working with such assistance as is customary in agricultural operations. Another possible method of indicating a limit may be to propose an average level of money income which the permissible holding may be expected to yield. The Emit which may be appropriate has to be determined by each State in the light of its own circumstances but, broadly speaking, following the recommendations of the Congress Agrarian Reforms Committee, about three times the family holding would appear to be a fair limit for an individual holding.