LAND REFORM AND AGRARIAN REORGANISATION
PLACE OF LAND REFORM IN THE PLAN POLICIES and programmes which are to be followed in different sectors of the economy during the second five year plan represent a balanced and combined approach to the central problems of economic development and social justice. Among these, measures of land reform have a place of special significance, both because they provide the social, economic and institutional framework for agricultural development and because of the influence they exert on the life of the vast majority of the population. In(teed, their impact extends much beyond the rural economy. The principles of change and reorganisation on which the scheme of land reform is based are part of a wider social and economic outlook which must needs apply in. some degree to every part of the economy. They have therefore to be viewed in a somewhat larger context than that of effecting adjustments between the interests of different sections of the population which depend on land.
2. In setting out the land policy for the period of the first five year plan, while a proper emphasis was placed on the social aspect, it was pointed out that the increase of agricultural production represented the highest priority in planning over the next few years, and that the agricultural economy had to be diversified and brought to much higher levels of efficiency. These considerations have a special importance during the period of the second five year plan. In the First place, the ambitious programme of idustrial development which is now being undertaken, implies large and steadily increasing claims both on raw materials and on food production. Increase in the supply of raw materials was the principal factor behind the growth of industrial production achieved during the first plan. India's ability to produce a range of agricultural commodities for which there is world-wide demand, such as tea, Jute, cotton, oilseeds, and others is an element in her industrial potential which must be developed to the greatest possible extent. In recent years imports of food-have been on a much smaller scale than before, but food production has yet to reach levels at which nutrition can be improved and domestic requirements are fully assured under all circumstances, and, at the same time, a margin remains to pay for imports of machinery and of industrial raw materials needed for rapid industrialisation. Moreover, with increase in population, growth of towns, cities and industrial centres, and improvement in incomes and standards of living, the internal demand for food is already increasing in volume and becoming more diverse. Equally, as explained in earlier chapters, the large outlay to be undertaken in the second five year plan can only be sustained if internal production, especially of food and cloth, is rapidly stepped up. Thus, the need to enhance the capacity of Indian agriculture to provide the surpluses needed to support industrial development and the wider economic considerations on which the fulfilment of the plan depends both lead to the same conclusion, namely, that a substantial increase in agricultural production, diversification of the agricultural economy, and the building up of an efficient and progressive system of agricultural production are among the most Urgent tasks to be accomplished during the second five year plan.
3. Against the background of these considerations, the objectives of land reform are twofold: firstly, to remove such impediments upon agricultural production as arise from the character of the agrarian structure; and secondly, to create conditions for evolving, as speedily as may be possible, an agrarian economy with high levels of efficiency anti productivity. These aspects are interrelated, some measures of land reform bearing more directly on the first aim others to a greater extent on the second. This, the abolition of intermediaries and the protection given to tenants are intended to give to the filler of the soil his rightful place in the agrarian system and, by reducing or eliminating burdens he has borne in the past, to provide him with fuller incentives for increasing agricultural production. Similarly, to bring tenants into direct relation with the State and to put an end to the tenants landlord nexus are essential steps in the establishment of a stable rural economy. In the conditions of India large disparities in the distribution of wealth anti income are inconsistent with economic progress in any sector. This consideration applies with even greater force to land. The area of land available for cultiva-
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tion is necessarily limited. In the past rights in land were the principal factor which determined both social status and economic opportunity for different groups in the rural population. For building up a progressive rural economy, it is essential that disparities in the ownership of land should be greatly reduced. In view of the existing pattern of distribution and size of agricultural holdings, redistribution of land in excess of a ceiling may yield relatively limited results. Neverthless, it is important that some effective steps should be taken in this direction during the second five year plan so as to affored opportunities to landless sections of the rural population to gain in social status and to feel a sense of opportunity equally with other sections of the community. Reduction of disparities in the ownership of land is also essential for develop- ing a co-operative rural economy, for, co-operation thrives best in homogeneous groups in which there are no large inequalities. Thus, programmes for abolishing intermediary tenures, giving security to tenants and bringing tenants into direct relationship with the State with a view to conferring ownership upon them are steps which lead to the establishment of an agrarian economy based predominantly on peasant ownership.
4. Small and uneconomic agricultural holdings have long been the most difficult problem in the development of the rural economy. There is general agreement that it is through reorganisation along co- operative lines that Indian agriculture can become efficient and productive. During the second five year plan it is proposed to take a series of measures which will lay the foundations for co-operative reorganisation of the rural economy. Once the vast majority of cultivators become owners or virtual owners of land in their own right, programmes for the consolidation of holdings asssume a great deal of urgency both in themselves and as a stage in the development of cooperation. In carrying out these programmes sufficient experience has been gained in several parts of the country for marked progress to be achieved in this field during the second five year plan. Closely associated with consolidation is the adoption of improved land management practices. It is one of the primary aims of the national extension and community projects to help the people of cacti village and each area to organise themselves for greater production, to bring them technical guidance and other assistance and in particular, to assist weaker and underprivileged sections of the rural community in raising their standards. Conditions have to be created in which an increasing number of activities in rural economic life, both non-agricultural and agricultural, are undertaken through cooperative organisations. As the village is the most convenient unit for rural community development, various measures to be undertaken for developing co-operatives and panchayats and for strengthening rural economic life through the organisation of national extension services, credit marketing and processing and village and small industries are intended to lead to the development in each area, according to its conditions, of suitable systems of cooperative, village management. Co-operation in one field stimulates and supports co-operation in others. Co-operative development is a vast and growing field of constructive endeavour and, for cooperation to evoke a degree of sustained enthusiasm and effort, it is important that it should be organized with the utmost attention to efficiency in management.
5. As different phases of the land reform programme are implemented, care has to be taken to ensure that the positive aspects are especially stressed, and measures of land reform worked out with a view to increased agricultural production. From this aspect the national extension and community development programmes, and programmes for agricultural development, rural credit and marketing and others are as vital to the success of land reform as land reform is vital to their success. Naturally, while the direction may be clear, the pace and the precise content of land reform programmes have to be related closely to the conditions prevailing in each State. Land reform imposes upon the machinery of the Government large administrative responsibilities and, as pointed out later in this chapter, tasks of great complexity, to which many State administrations may not yet feel equal, have to be undertaken in the course of a few years. Almost all of them demand a vide measure of public support and understanding and much mutual adjustment within the community. There are also many intangible factors which each State has necessarily to, take into account These considerations have been kept in view during the first five year plan in the work of the Central Committee for Land Reforms, which includes members of the Planning Commission and the principal Central Ministers concerned, and reviews from time to time the progress of land reform in different parts of the country. They have also been kept in view by the Panel on Land Reform, which has assisted the Planning Commission during the past year in the study of various problems connected with tenancy reform, size of holdings, reorganisation of agriculture and Bhoodan. The proposals for land reform and cooperative development set out in the plan are therefore in the nature of a broad common approach which has to be adapted and pursued in each State as part of the national plan with due regard to local conditions and in response to local needs.
LAND REFORMS
ABOLITION OF INTERMEDIARIES 6. A few years ago intermediary tenures prevailed over half the country. In some States, legislation for the abolition of intermediaries was enacted before
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1951. Most of the work relating to the enactment of laws and the acquisition of intermediary areas has, however, been undertaken during the period of the first.plan. Intermediaries have been almost entirely abolished. A few small pockets remain where further action for abolition is necessary, such as temporarily settled estates in Assam, zamindaris in Rajasthan, minor intermediary tenures such as service inams and other minor inams in a number of States, and intermediary areas in some Part `C' States such as Coorg, Kutch and Tripura. In the early stages the implementation of some of the laws was held up on account of writ petitions filed by intermediares challenging the constitutional validity of the legislation. The Constitution was amended in 1952 with a view to resolving this difficulty.
7. The abolition of intermediaries is an essential step, but it imposes a heavy strain upon the administrative resources of State Governments. The tasks to be undertaken include the determination and payment of compensation to intermediaries, arrangements. for the preparation or revision of records showing the names and holdings of tenants and the rent or revenue which they are liable to pay to the State Government as a result of the abolition, establishment of agencies for collection of rent or revenue and for maintenance of records. Areas which intermediaries are entitled. to retain have to be demarcated and arrangements made for the management and development of common lands which become the property of the State.
8. Progress was comparatively easy in the temporarily settled areas, such as Uttar Pradesh and Madhya Pradesh, where adequate records and administrative machinery existed. In the permanently settled areas of Bihar, Orissa, and West Bengal and in areas under Jagirdari settlements such as Rajasthan and Saurashtra, land records and revenue administration had to be built up almost from the begin- ning. Nevertheless, laws abolishing intermediary tenures have been given effect to in most of the States.
9. The general pattern of abolition of intermediaries comprises the following measures:-
(1) Common lands such as waste lands, forests, abadi- sites etc., which belonged to intermediaries were vested in the State Government for purposes of management and development.
(2) Home-farm lands and lands under the personal cultivation of intermediaries were generally left with them and lessees of home-farms continued as tenants under them. In some States, however, tenants of home- farms of intermediaries were also brought into direct relation with the State and the rights of intermediaries over their tenancy lands were abolished. These include Uttar Pradesh, Madhya Bharat (jagirdari areas), Delhi Ajmer and Bhopal. In Rajasthan and Madhya Bharat (zamindari areas) an optional right to purchase ownership was given to such tenants. In most of the States, intermediaries were not allotted any land for personal cultivation over and above lands already in their cultivating possession and included in their own home-farms. In a few States,however, such as Hyderabad and Mysore (in the case of Inams), Rajasthan, Saurashtra, Ajmer, Bhopal and Vindhya Pradesh, inter- mediaries were allotted lands for personal cultivation if the area already held by them was less than that specified in the legislation.
(3) In most of the States tenants-in-chief holding land directly from intermediaries were brought into direct contact with the State with some exceptions such as Bombay (in respect of several classes of intermediaries) and in Hyderabad and Mysore (in the case of some inams). In these States, intermediaries were in some cases allotted lands held by tenants. In some States tenants possessed permanent and transferable rights and it was not necessary to confer further rights upon them. These included Assam, West Bengal, Bihar, Orissa, Bhopal and Vindhya Pradesh. There were other States such as Bombay, Uttar Pradesh, Madhya- Pradesh, Hyderabad, Mysore and Delhi where tenants were required to make payments in order to acquire rights of ownership. In a few States, such as Andhra, Madras, Rajasthan, Saurashtra (barkhali areas), Madhya Bharat, Hyderabad (jagir areas) and Ajmer, either larger rights were conferred upon tenants or their rents were reduced without any direct payment being required of them.
10. The total amount of compensation and rehabilitation assistance payable to intermediaries is estimated to be in the neighbourhood of Rs.450 crores. Uttar Pradesh and Bihar together account for about 70 per cent. of the total amount of compensation. As a rule, the rate of compensation has been fixed as a multiple of the net income of the intermediaries from their estates. In most States, higher multiples were allowed to persons in the lower income groups. Abolition of intermediary rights leads to increase in the amount of revenue accruing to the State. Compensation pay-
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ments are financed out of such increases. Compensation is payable sometimes in cash but generally in the form of bonds which are transferable and negotiable and are also redeemable over a period which may vary from 10 to 40 years. The assessment of compensation and the issue of bonds in lieu of compensation to a large number of intermediaries has been a task of considerable magnitude. In most States, the administrative machinery had to be reinforced with a view to expediting this work. Considerable work relating to the determination and payment of compensation, however, still remains to be done. In particular, it is necessary to speed up the payment of compensation to small intermediaries and to widows and minors.
RIGHTS OF OWNERS 11. With the abolition of intermediaries the existing tenures may be broadly classified into two main categories, namely, owners who hold land directly from the State and tenants who hold land from owners. Their rights and obligations had generally been regulated under tenancy laws enacted in the various States from time to time. The bulk of the tenants had acquired security of tenure and their rents had been regulated. In many States they had also obtained considerable rights of transfer. There-were, however, differences in the quantum of rights enjoyed by the various classes of tenants and often a large variety of tenures existed. On abolition of inter- mediaries, the multiplicity of tenures has been greatly reduced and for the most part tenants holding land under intermediaries have become owners of land. It is desirable that a fairly uniform pattern of ownership should be evolved which conforms to certain commonly agreed rights and obligations.
12. Ownership of land entails certain obligations. The most important of these concerns the use and management of land. This aspect is considered in a later section of this chapter.
In a number of States, as part of legislation relating to consolidation of holdings, measures for preventing fragmentation have been adopted. It frequently happens, however, that such measures are not adequately enforced. Provisions against the creation of fragments or their further splitting up by transfer or partition and regulation of the transfer of existing fragments are essential in the interest of agricultural development.
13. In some States, over a considerable area persons who hold land directly from the State do not possess the right of transfer. Such owners can obtain Short-term loans on the security of the crop but in the absence of alternative security, they may not be able to avail of facilities offered by co-operative credit institutions for medium and long-term loans. It is, therefore, desirable that every individual who holds land directly from the State should have the right to mortgage land in order to obtain loans from Government and from co-operatives on the security of land.
14. In some States the right to lease land has been limited to persons who suffer from some disability such as widows, minors, persons serving in the Armed forces, etc. Experience suggests that complete prohibition of leases introduces a degree of rigidity in the rural economy and is difficult to enforce administratively. It was visualised in the First Five Year Plan that, to the extent leases of land are permitted, in principle it would be desirable that they should be made through the village panchayat. The practice should be encouraged whenever possible. In any event when leases are made directly they should be for minimum periods of 5 to 10 years.