18. Provisions regarding resumption for personal cultivation could be abused if medium-sized owners were to act malafide and transfer their lands to relatives or others and so come within the definition of small owners. With a view to ensuring that the provi- sions for resumption are observed, legislation in Gujarat and Maha- rashtra was amended in 1957 so as to restrict resumption in respect of such land as stood in the name of a land holder or any of his ances- tors in the record of rights on the 1st day of January, 1952. In the legislation in Kerala which includes special provision for small holders, it has been provided that any transfers or partitions carried out after the 18th day of December, 1957, shall not entitle the land holder or the transferee to the benefit of the provisions for small holders. A condition on these lines would be generally desirable.
RIGHTS OF OWNERSHIP FOR TENANTS 19. Security of tenure and reduction of rents are the first stage in tenancy reform; the goal is to confer rights of ownership on as. large a body of tenants as possible. In the Second Plan it was suggested that each State should have a programme for converting tenants of non-resumable areas into owners and putting an end to vestiges of the landlord-tenant relationship. It was urged that instead of optional rights to tenants to purchase lands cultivated by them, all tenants of non-resumable areas should be brought into direct relationship with the State. For owners with holdings equivalent to a family holding or more, a period of five years within which the right of resumption could be exercised was proposed, and it was suggested that on the completion of this period, rights of ownership should be conferred on their tenants. Finally, as it was difficult to obtain precise information regarding the progress made in the transfer of ownership rights to tenants, the recommendation was made that States should arrange to compile regular annual returns.
20. In the course of the Second Plan, some progress has been made in the direction of providing ownership rights to tenants. In a few States as in Punjab, only optional right to purchase has been given to tenants. This is an unsatisfactory approach, for, as was observed in the Second Plan, where rights of purchase are optional, they are scarcely exercised. In a number of States, legislation provides for bringing tenants of non-resumable lands into direct rela- tionship with the Government. This may be achieved in one of the three ways :
(1) by declaring tenants as owners and requiring them to pay compensation to owners in suitable instalments, responsibility for recovering unpaid instalments as arrears of land revenue being accepted by Government;
(2) through the acquisition by Government of the rights of ownership on payment of compensation and transfer of ownership to tenants, compensation being recovered from them in suitable instalments; and
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(3) through the acquisition by Government of the landlord's rights and bringing tenants into a direct relationship with the State, option being given to tenants to continue as such on payment of fair rent to the Government or to acquire full ownership on payment of the prescribed compensation.
21. The first of these courses has been followed in Gujarat, Maharashtra, Madhya Pradesh and Rajasthan, the second in Delhi and in respect of under-raiyats (without payment of compensation) in West Bengal, and the third in Kerala and Uttar Pradesh. In Madras, steps in favour of ownership rights for tenants have not yet been initiated. In Assam and Bihar, the right of ownership will be available only to the tenants of land-holders holding more than the ceiling area. As much of the legislation is quite recent. exact information regarding the extent to which ownership rights have been conferred on tenants is not available. It is understood that in Gujarat and Maharashtra, under legislation enacted by the former Bombay State, rights of owner- ship would accrue to 1.3 million tenants over an area of about 2.4 million acres. In Uttar Pradesh, about 1.5 million sub-tenants and tenants of home-farm lands, holding about 2 million acres, were brought into direct relationship with the State. In the Union Terri- tory of Delhi ownership of about 25,000 acres was transferred to about 18,000 tenants and subtenants.
22. It is recommended that in the course of the Third Plan, steps should be taken to complete the programme for conferring rights of ownership on the tenants of non-resumable lands. With the enforce- ment of ceilings on agricultural holdings, tenants of owners with lands above the limit of ceiling will. in the ordinary course, become owners of land. It has been suggested earlier that owners holding land exceeding a family holding, as prescribed in different States, should have no further rights of resumption. Tenants of such owners should also become owners of lands held by them. With this object, according to its legislation and other conditions, a State may either acquire the rights of ownership and transfer them to tenants or de- clare tenants as owners and require them to pay for their rights in instalments on terms prescribed by legislation. On the whole, it would be desirable for payments by tenants for acquisition of owner- ship to be made directly to Government rather than to the owners. This will ensure more effective implementation and will end the land- lord-tenant nexus.
23. The question arises whether Tights of ownership should also be conferred upon the tenants of small owners. This would be desira- ble, in principle to the extent of non-resumable lands held by such tenants. However, in view of the large number of petty owners in- volved. a uniform approach might not be feasible. The problem should be studied by States in the light of their conditions with a view to determining the action called for in this direction.
CEILING ON AGRICULTURAL HOLDINGS 24. In the course of the Second Plan, there has been legislation for placing ceiling on agricultural holdings in Andhra Pradesh, Assam, Gujarat, Kerala, Madhya Pradesh, Maharashtra, Orissa, PEPSU territory in the Punjab, Rajasthan, Uttar Pradesh and West Bengal and in, the Union Territories. Bills proposing, ceilings are at present before the State legislatures in Bihar, Madras and Mysore. In Punjab, out- side the area of the former PEPSU territory, the existing legislation permits the Government to utilise land in excess of the permissible area for the purpose of resettling tenants who have been ejected or may be ejected. Annexure I of this Chapter sets out in summary form information relating to the levels at which ceilings have been pre- scribed or proposed in different States. With the completion of legislation, essential task must be that of ensuring speedy and effec- tive implementation.
25. The question whether ceilings should apply to the holding of an individual owner or to the aggregate area held by the members of a family was considered in the Second Plan. As is to be expected, practice in this respect differs. In several States, as in Andhra Pradesh, Jammu and Kashmir, Orissa, Punjab, Uttar Pradesh and West Bengal the ceiling applies to individuals without any special provi- sion being made for joint Hindu families. In Madhya Pradesh, while the ceiling applies to individuals, in the case of a joint Hindu family each co-sharer is entitled to a separate ceiling area. In Assam, Gujarat, Kerala and Rajasthan, the ceiling applies to the aggregate area held by a family. the expression 'family' being defined in the" legislation. A similar approach has been adopted in the legislation now under consideration in Madras and Mysore. Thus dif- ferent States have applied ceiling to individuals or families as they considered appropriate to their conditions.
26. Once legislation has been enacted, amendments should aim primarily at eliminating deficiencies and facilitating implementation rather than at introducing fundamental changes in the principles underlying the legislation. In this context, the most important issue for consideration is the treatment of transfers of land on the part of land owners subject to ceilings. On the whole, it would be correct to say that, in recent years, transfers of lands have tended to defeat the aims of the legislation for ceilings and to reduce its impact on the rural economy. The question as to whether or not transfers should be disregarded and, if so, from what date, has been debated at length in every State. In the majority of States a date prior to the enact- ment of the legislation has been indicated. This may be the date of, the introduction of the
120 THIRD FIVE
Bill providing for ceilings or of its publication or other specified date. In several States transfers subsequent to this date are disregarded as in Assam, Gujarat, Kerala, Madras, Maharashtra, Rajasthan, Uttar Pradesh and West Bengal. In a few States, there is no such provision at all, as in Andhra Pradesh. In Madhya Pradesh and Orissa, legislation allows the owners of surplus lands to dispose of them to persons belonging to, certain prescribed categories even after the enactment of the legislation.
27. Since many of the transfers are apt to take place between members of the family, it has been suggested that the ceiling should apply invariably to the aggregate area held by a family rather than to individuals. However, in view of the fact that ceiling have been applied in several States to individual holdings and in others to the aggregate area held by a family, any attempt to remove deficiencies or weaknesses would have to fit into the pattern of the prevailing legis- lation. The question of transfers could perhaps be dealt with in the following manner :
(1) Where legislation does not contain a provision for disregarding transfers, in view of the fact that trans- fers have taken place on a considerable scale, a suit- able date subsequent to which transfers are disregarded may be proposed, if necessary, through an amending legis- lation. This date may be the date of the publication of the ceiling proposals or an earlier date as may be prescribed in view of the local conditions.
(2) In respect of transfers made after the specified date, a distinction may be made between (a) transfers among the members of a family, (b) benami transfers and other transfers which have not been made for valuable consideration and through a registered document, and (c) transfers made for valuable consideration through a registered document. Transfers coming under (a) and (b) can be disregarded. Transfers falling under (c) may need to be dealt with differently in view of the fact that the transferees may be small owners or landless persons who may have purchased some land. It may be necessary to protect such transferees, at any rate, upto a prescribed limit, say, a family holding.
(3) There should be provision for a review of trans- fers by a competent authority on the lines suggested above.
EXEMPTION FROM CEILING 28. The Second Plan envisaged exemption from ceilings for the following categories of farms :
(1) tea, coffee and rubber plantations;
(2) orchards where they constitute reasonably compact areas;
(3) specialised farms engaged in cattle-breeding, dairying, wool-raising, etc.;
(4) sugarcane farms operated by sugar factories; and
(5) efficiently managed farms which consist of compact blocks, on which heavy investment or permanent structur- al improvements have been made and whose breakup is likely to lead to a fall in production.
This recommendation was based on three main considerations. Firstly, in undertakings like plantations, industrial and agricultural work had to be closely integrated. Secondly, in certain specialised branches of agriculture such as horticulture, cattle-breeding, dairying, etc. investment has to be made on a long-term basis and several years elapse before the output could be realised. In the third place, it was thought that in safeguarding efficiently managed farms which consisted of compact blocks on which heavy investment or permanent structures had been made, risk of fall in production would be avoided.
29. In the legislation which has been enacted in the States, plantations have invariably been exempted from ceilings. There are provision also in favour of specialised farms. There has been some measure of variation in the approach to sugarcane farms operate by sugar factories and to efficiently managed farms. Legislation in several States (Andhra Pradesh, Assam, Gujarat, Madhya Pradesh, Orissa, Punjab and Rajasthan) and proposals under consideration in some others (Bihar and Mysore) provide for the exemption of efficient- ly managed farms from ceilings. Where the exemption exists, by and large it has still to be implemented, In Kerala, Madras, Maharashtra and Uttar Pradesh, exemption of efficiently managed farms from ceil- ings has not been envisaged. In Uttar Pradesh, the Government has taken power to operate the surplus lands of mechanised farms as State farms and to appoint suitable persons as managers on terms and condi- tions to be prescribed, preference being given to the existing holders of these farms if they are otherWise qualified.
30. As regards sugarcane farms operated by sugar factories, legislation in several States exempts them from the operation of ceilings, as in Andhra Pradesh, Assam, Madhya Pradesh, Orissa, Rajas- than and PEPSU area of Punjab and in the Bills at present under con- sideration in Bihar and Mysore. In three States, however, a different approach has been adopted. In Madras legislation provides for the setting up of a Sugar Factory Board to review whether individual factories should or should not be exempted from ceilings. considera- tions such as the requirements of the sugar factory and its financial structure have to be taken into account before final decisions are taken. In Uttar Pradesh, while there is no exemption from ceilings, provision relating to
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mechanised farms mentioned above would also apply to sugarcane farms operated by sugar factories. In Maharashtra, sugarcane farms of the sugar factories are not exempted from ceilings but provision is made for maintaining the integrity of the farms in one or more compact blocks, for full and continued supply of raw material to sugar facto- ries at a fair price, and for grant of surplus land to joint farming societies consisting, as far as possible, of persons who had previous- ly leased their lands to the sugar factory, agricultural labourers employed on the farm, technical and other staff engaged by the factory for work on the farm, adjoining land holders who are small holders and landless workers.
31. The considerations urged in the Second Plan and the recommen- dations regarding the exemption from ceilings of efficiently managed farms and of sugarcane farms operated by sugar factories remain generally valid for the Third Plan and there are advantages in fol- lowing the course proposed. On the other hand, where a State, because of practical difficulties or other considerations, wishes to adopt a different course, certain conditions should be assure. These are, firstly, that the integrity of the farms should be maintained and their levels of efficiency ensured and, secondly, in the case of sugar factory farms satisfactory and continuous supply of the raw material to the factory concerned should be secured.
SCHEMES OF RESETTLEMENT 32. Proposals to set ceilings on agricultural holdings were intended to serve two objects-firstly, to bring about reduction in disparities and pave the way to the development of a progressive cooperative rural economy and, secondly, to provide land for redistri- bution to the landless sections of the rural population. Far-reaching legislation has been enacted and although precise estimates are diffi- cult to make, it would appear that the total area of surplus lands likely to be available for distribution to the landless might be considerably less than what had been hoped for at one time. At the present stage in land reform the most important consideration is that such lands as can be made available by each State as a result of the implementation of its ceilings legislation should be allotted with lest possible delay. Along with these lands, waste lands and, where possible, land available through Bhoodan should be pooled and system- atic schemes of resettlement speedily implemented. In providing land care should be taken to make available the necessary credit and other facilities, so that those settled on the land may develop high stand- ards of cultivation. It was contemplated in the Second Plan that in the settlement of land acquired in consequence of the application of ceilings, tenants displaced as a result of resumption of land for personal cultivation, farmers with uneconomic holdings and landless workers should receive preference. It was also proposed that settle- ments should be made, as tar as possible, on cooperative lines. Generally, the legislation which has been enacted follows these recom- mendations. It was also proposed in the Second Plan that farmers with uneconomic holdings should be admitted into cooperatives constituted with surplus lands if they also agreed to pool their lands. In taking action along these lines the necessary financial and technical assist- ance should be provided as envisaged in the programme for the develop- ment of cooperative farming proposed for the Third Plan.
CONSOLIDATION OF HOLDINGS 33. Progress in the consolidation of holdings has been recorded in Punjab, Uttar Pradesh, Maharashtra, Gujarat and Madhya Pradesh. In other States, there has been comparatively little advance during the Second Plan. By the end of 1959-60 about 23 million acres had been consolidated and work was in hand over another 13 million acres. According to indications given by States, the total area likely to be taken up for consolidation in the Third Plan is about 30 million acres. With a view to making experience in consolidation of holding available to all States, two special studies were prepared by the Planning Commission four years ago. One of these explained the meth- ods which had been developed in different parts of the country and the problems which had been encountered . The second study set out sugges- tions for speedy execution of the programme of consolidation. Al- though consolidation of holdings has been regarded as an integral part of the agricultural production programme, in practice the two pro- grammes are not always co-ordinated. Except where consolidation of holdings is already being undertaken on a large scale, in view of the limitations of trained personnel, it would appear desirable to concen- trate consolidation work in areas which are already receiving irriga- tion or are likely to come under irrigation. The Planning Commission propose to study more closely how best the factors which come in the way of extension of the consolidation programme in the southern and eastern parts of the country can be over-come and what changes and adaptations in the present methods and system of consolidation are called for in these areas.