UPSC IAS exam preparation - Fundamentals of the Indian Economy - Lecture 6

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Land reforms: the need and scope in India - Part 1

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1.0 introduction 

In India, since ancient times, land has been used as a source of social power and has always been distributed unequally. The practice of land grants (giving of land by the state to people who have helped the kings in some way) created a situation where the ownership of land was concentrated in the hands of a few.  During the Mughal period, peasants continued to enjoy customary rights over land they occupied and generally could not be evicted unless they failed to pay the required land revenue (land tax) to the state. The task of collecting land revenue was assigned to a class of agents called Zamindars.

Under the British East India Company, the system of land holdings became more exploitative. Under the Permanent Settlement introduced in 1793 the Zamindars to be proprietors of land in exchange for the payment of land revenue fixed in perpetuity who delegated this job to middlemen. This led to rise in the number of intermediaries. Large scale evictions due to non-payment of rent became a routine affair. The Bengal Rent Act of 1859 and the Bengal Tenancy Act of 1885 sought to protect long-term tenants but they proved ineffective. During the 1940s the system of land settlement gave rise to increased resentment against the British, especially in the state of Bengal and this led to the rise of Communism. 

When India got Independence, the matter of land reforms was given a lot of importance. The 1949 Constitution left the adoption and implementation of land and tenancy reforms to state governments. Today this has created great disparity in the effectiveness of land reforms in various states. 

2.0 AGRICULTURAL PRODUCTIVITY 

Agricultural productivity is dependent on two sets of factors: technological, and institutional. In this session, we will study this in some depth.

2.1 Technological factors

Factors like the use of agricultural inputs and methods such as improved seeds, fertilizers, improved ploughs, tractors, harvesters, irrigation, etc., which help to raise productivity, even if no land reforms are introduced, refer to technological productivity growth.

2.2 Institutional factors

Factors like the redistribution of land ownership in favor of the cultivating classes so as to provide them a sense of participation in rural life, improving the size of farms, providing security of tenure, regulation of rents, etc., refer to institutional factors in productivity.

In other words, the institutional factors, such as the existence of feudal relations, small size of farms, sub-division and fragmentation, insecurity of tenancy rights, high rents, etc., act as disincentives to the peasantry to raise production. They weaken the capacity of the farmers to save and invest in agriculture as also to enjoy the fruits of their labour. 

Earlier there were two schools of thought on how the problem of agricultural productivity should be solved in India based on what should be tackled first : institutional factors or technological factors. But now both the schools of thought are converging, and opinion has come to centre round the idea that land reforms and technological change are not mutually exclusive factors but are complementary in the process of agricultural development. It is held that technological change can work more effectively in a congenial agrarian structure and in this way the process of development can be accelerated.

3.0 Land Reform: meaning and scope

Land Reforms is a planned and institutional reorganisation of the relation between man and land in order to ensure a more equitable distribution of the same. Some definitions of land reforms are:

1. Land Reforms are deliberate changes introduced into system of land tenure and the farming structure.
2. Land reforms imply such institutional changes which turn over ownership of the farms to those who actually till the soil, and which raise the size of the farm to make it operationally viable.
3. Land reforms mean, such measures as, abolition of intermediaries, tenancy reforms, ceiling on land holdings, consolidation and cooperative farming etc.
4. Land reform is a process of improving land tenure and institutions related to agriculture.
5. Land reforms is a process of redistribution of property rights for the benefit of the landless poor.
6. Land reforms is an integrated program to remove the barriers for economic and social development which have been caused due to deficiencies in the existing land tenure system.

Land reforms try to achieve the following objectives:

1. Land reforms lead to a more rational use of the scarce land-resource by affecting condition of holdings, imposing ceilings and floors on holdings so that cultivation can be done in the most economical manner, i.e., without any wastage of labour and capital.
2. Land reforms are also a means of redistributing agricultural land in favour of the less privileged classes, and of improving the terms and conditions on which land is held for cultivation by the actual tillers, with a view to ending exploitation.

The Indian freedom fighters understood the necessity of land reforms in India very early. In fact, as early as 1935, the Indian Congress in its resolution had stated that  “There is only one fundamental method of improving village life . . . namely, the introduction of a system of peasant properietorship under which the tiller of the soil is himself the owner of it and pays revenues direct to the government without the intervention of any zamindar or taluqdar”.

3.1 Scope of land reforms

Land reforms aim at redistributing ownership holding from the viewpoint of social justice, and reorganising operational holdings from the viewpoint of optimum utilisation of land. In case of tenancy, land reforms aim at providing security of tenure, fixation of rents, conferment of ownership, etc. The entire concept of land reforms aims at the abolition of intermediaries and bringing the actual cultivator in direct contact with the state. The provisions of security of tenancy and rent regulation provide a congenial atmosphere in which the agriculturist feels sure of reaping the fruits of his labour. Land reforms, therefore are very important from the perspective of poverty alleviation also. 

The scope of land reforms, therefore, entails:

1. abolition of intermediaries; 
2. tenancy reforms, i.e., regulation of rent, security of tenure for tenants and conferment of ownership on them; 
3. ceiling and floors on land holdings; 
4. agrarian reorganisation including consolidation of holdings and prevention of sub-division and framentation; and 
5. organisation of cooperative farms.

4.0 Status of Land Ownership before Independence

It is customary to classify the various categories of land tenure systems before independence into three broad heads : Zamindari, Mahalwari and Ryotwari.

4.1 Zamindari tenure

Under the Zamindari system, which was introduced by Lord Cornwallis in 1793 in Bengal, land was held by one person or at the most by a few joint owners who were responsible for the payment of land revenue. The system was introduced by the East India Company to create vested interests in land and thereby cultivate a privileged and loyal class. The various forms of tenure such as Zamindari, Jagirdari, Inamdari, the princely States etc. were artificially created. The revenue collectors were raised to the status of landowners. Earlier they were responsible for collecting land revenue for which they received a commission. The Zamindari settlements made them owners of land, thereby creating a permanent interest in land.The Zamindari settlements were of two types— permanent settlement and temporary settlement. 

The permanent settlement system: This system fixed land revenue in perpetuity. This system prevailed in Bengal, North Madras and Banaras. 

The temporary settlement systems: Under this, the land revenue was assessed for a period ranging between 20 and 40 years in various states. Land revenue, therefore, was subject to revision. Temporary settlement was effected with remaining zamindars of Bengal, taluqdars of Oudh, etc. Since the period of assessment was fairly long, temporary settlement was not really temporary. Land revenue was thus fixed and in doing so, the primary object of the East India Company was to fix responsibility for the punctual payment of land revenue.

4.2 Permanent settlement (Chirostahyi bandobasto)

This was an agreement between the British East India Company and the landlords that the landlords would have perpetual and hereditary rights over the land, so long as they pay the fixed revenue to the British Government. Some important aspects of this system were,

1. it recognized the landlords as the proprietors of the land. It also recognized the rights of hereditary succession for the heirs or lawful successors of the landlords. The Government believed that these landlords would remain faithful to the British.
2. The landlords were given the right to transfer or sell their lands if they liked.
3. All the rights of the landlords depended on their payment of the fixed revenue on the fixed date at the treasury of the Government. All their rights ended if they failed to pay.
4. The total amount of revenue to be paid by each landlord for his zamindari to the Government was fixed permanently. It was agreed that the tax rate would not increase in future.
5. The landlord was required to give to the tenant the patta describing therein the area of the land and the rent to be collected for that land. Thus the tenants got rights on their holdings and knew of the revenue to be paid.

Problems with the Zamindari System: The British Government’s argument was that the zamindars represented the most enlightened section of the rural population and the Zamindari system would result in improvements on land and better agriculture. But these expectations were not fulfilled. With growing population and decaying village industries under the British rule, the demand for land grew and it was possible for the landlords to charge very heavy rents from tenants. Zamindari system supposedly introduced to foster progressive agriculture, degenerated into absentee landlordism. Thus, between the state and the actual tiller there grew an intermediary who was interested in land only to the extent of extraction of exorbitant rent. Historically, the landlords as a class are known for their extravagance on women, wine and vices. The landlords of India were no exception. Thus, the money extracted from the cultivators by these parasites did not result in capital formation but increased conspicuous consumption. The zamindari villages were thus divided into two agricultural classes — the absentee owners and non-owner cultivators. The absentee owners exploited the actual tillers. Absence of state intervention of any type gave a free hand to the exploiting classes to indulge in rack renting, evictions, begar and many other social evils. The landlords symbolised oppression and tyranny. Indian agriculture was reduced to a form of subsistence farming. It was disincentive-ridden, but there was no escape from it, since it represented the principal source of livelihood for the masses.

4.3 Mahalwari Tenure

The Mahalwari system was introduced in 1833 during the period of William Bentinck in Central Province, North-West Frontier, Agra, Punjab, Gangetic Valley, etc of British India. It combined provisions of both the Zamindari System and Ryotwari System. In this system, the land was divided into Mahals. Each Mahal comprises one or more villages. Ownership rights were vested with the peasants. The villages committee was held responsible for collection of the taxes.

Under the Mahalwari tenure, the village lands were held jointly by the village communities, the members of which were jointly and severally responsible for the payment of land revenue. The system was first introduced in Agra and Oudh and later on in Punjab. Under the system, the village common or Shamlat is the property of the village community as a whole. Similarly, the waste lands also belong to the village community and it is free to rent it out and divide the rents among the members of the community or partition it to bring it under cultivation without any leave of the Government. Land revenue is assessed for the whole village for which the whole body of co-sharers are jointly and severally responsible. The village lumberdar collected revenue for which he received panchortra, i.e., 5 per cent as commission.

4.4 Ryotwari tenure

The Ryotwari System was introduced by Thomas Munro in 1820 in the areas of Madras, Bombay, parts of Assam and Coorgh provinces of British India. In Ryotwari System the ownership rights were handed over to the peasants. British Government collected taxes directly from the peasants. The revenue rates of Ryotwari System were 50% where the lands were dry and 60% in irrigated land.

Under the Ryotwari tenure, areas of land were allowed to be held in a single independent holding. The individual holders were directly responsible to the state for the payment of land revenue. The first Ryotwari settlement was made in Madras in 1792. This form of tenure was prevalent in Bombay, Berar and Central India. The ryot is at liberty to sub-let his land and enjoys a permanent right of tenancy so long as he pays the assessment of land revenue. Some elements of zamindari tenure did appear in this system too because the peasants in ryotwari areas could sublet their land.      

The popular nomenclature of ryotwari, mahalwari and zamindari concealed the vast transformation that had taken place during 150 years of practice. Emphasizing this point, H. Venkatasubbiah mentions : “If Lord Cornwallis and Sir Thomas Munro, the respective protagonists of the zamindari and the ryotwari, were to look at the system in 1940 they would barely recognise them as such”.

The co-existence of zamindari, ryotwari and mahalwari led to an intermixing of characteristics. But the three systems gravitated towards the tendencies of the zamindari system. Sub-letting, rack-renting became a common characteristic even in the ryotwari areas. The mahalwari system acquired the characteristics of the zamindari system in states like Madhya Pradesh and U.P. (Agra) where the Government laid emphasis on joint responsibility of the village for land-revenue assessment; at the same time, it acquired the characteristics of absentee landlordism of the ryotwari areas in Punjab where emphasis was on several responsibility for the payment of land revenue. Similarly, in inams and jagirdari areas, the zamindars demanded between a half and two-thirds as settlement. As there were no records, there was a lot of uncertainity in the rents charged from the cultivators. Thus, on the eve of independence, on the one extreme, there were landless labourers and tenants-at-will and on the other, were big landlords owning huge estates. But a very disquieting feature of the situation was the absence of the proper revenue records which made the task of abolition of intermediaries more difficult. Consequently, the need for a complete census of holdings was felt. 

The Tebhaga movement: The Tebhaga movement was a movement of the sharecroppers of Bengal in 1946-47, demanding two-thirds instead of half as their produce. Basically from this principle demand the name 'Tebhaga' movement comes. The small peasants also joined hand with the sharecroppers as the gambit of the demands increased. Gradually with the intensification of the movement the charter of demands even touched the revolutionary idea of 'land to tiller' concept.

In many areas the agitations turned violent, and landlords fled villages leaving parts of the countryside in the hands of Kisan Sabha. In 1946, the share croppers of Bengal began to assert that they would no longer pay a half share of their crop to the Jotedars but only one-third and that before division the crop would be sure in their godowns and not that of the Jotedars. The Jotedars were encouraged by the fact that the Bengal Land Revenue Commission, popularly known as the Flood Commission had already made this recommendation in its report to the government. The Tebhaga movement resulted in clashes between Jotedars and Bargadars.

As a response to the agitations, the then Muslim League ministry in the province launched the Bargadari Act, which provided that the share of the harvest given to the landlords would be limited to one third of the total. But the law was not fully implemented.

The movement reflected the development of the political consciousness of the poor peasants and tribal sharecroppers and marked a turning point in the history of agrarian movements in India. 

4.5 The Bengal Tenancy Act, 1885

The system of Permanent Settlement gave absolute rights to the zamindars, who were hereditary landholders and ruled as such, but the rights of tenants were not defined. In the nineteenth century, the demand for land increased and the landlords increased rents and land revenues. The Ryots (tenants) refused to accept the zamindari rent increase beyond the customary rates. This led to a lot of resentment against the landlords and violent uprising like the Pabna peasant uprising. The Bengal Tenancy Act was enacted due to the extensive restlessness that occurred towards the peasant by intimidating them thereby disrupting the peaceful control of the State. The Act defined the rights of zamindars (lords) and their tenants. It contained rules to carry out an elaborated Survey as well Settlement activities of the land with regard to the owners. This was framed to create an authentic document connected with the rights with diverging interest in such land starting from the zamindars and reaching till the lower tenants. 

But the enactment was unsuccessful as the increase in land gave no choice to the under-tenant to settle on the terms of rent. Hence, there was an effective need to amend the Act and include provisions in support of the under-tenants. Further amendment to this Act was done in 1928.  This amendment provided rights to the under-tenants who possessed the land for an uninterrupted period of 12 years. The Amendment Act also failed due to the alterations carried out to the Bill that failed to comply with the needs of the society. Hence, again in 1938, the Bengal Tenancy (Amendment) Act, 1938 was enacted to fill the gap in the previous legislation.

5.0 Abolition of Intermediaries

5.1 The policy and measures

Concrete steps for abolition of intermediaries were started in 1948 with the enactment of legislation in Madras. Legislation was passed in all states, but for a few minor tenures and inams as in Assam, Gujarat, Madras and Maharashtra. Incidentally it may be mentioned that West Bengal — the state worst affected by the ravages of absentee landlordism — was among the late comers to adopt legislation in 1954-55. As a result of the conferment of rights, about 30 lakh tenants and share-croppers acquired ownership rights over a total cultivated area of 62 lakh acres throughout the country.

Though the objective was to abolish intermediaries between the tiller and the State, in actual practice the legislative enactments equated intermediaries with zamindars and, consequently, the legislation left a class of rent-receivers and absentee landlords under ryotwari untouched. Venkatasubbiah writes : “The Party and the Government at the Centre and in the States began to give thought to curtailing the power of non-zamindari rentier only at a subsequent stage of their agrarian policy”.

5.2 Compensation to intermediaries

Under the Indian Constitution, right to property was a fundamental right of every Indian Citizen. Therefore, unlike Communist countries, abolition of intermediaries was not done in India without compensation. In Russia, China, Yugoslavia, etc., landlords were expropriated from land without any compensation. They were reduced to the position of wage earners at the collective farms. But the Congress Party which assumed power after independence was committed to the payment of compensation to the landlords. Although the makers of the Constitution provided for compensation they did not clearly mention ‘just and equitable compensation’. Consequently, the Zamindari Abolition Acts were challenged in the High Courts and later taken to the Supreme Court for adjudication. The Supreme Court while upholding the right of the legislatures to acquire lands for a public purpose ruled that compensation is a justiciable issue. The rates of compensation, the ceiling limit of compensation and even the principles determining compensation were revised and the landlords were quite successful in getting equitable and in some cases more than equitable compensation.

5.2.1 44th constitutional amendment

This changed with the Constitution (Forty-fourth Amendment) Act, 1978 which took away this fundamental right from the citizens. The basis and rate of compensation varied from state to state. Compensation was fixed as a multiple of net income of the proprietor at the time of expropriation. This multiple was high in the case of lower income brackets and declined in upper income brackets. In some States, uniform multiple of net income was introduced as compensation, but proprietors with small incomes were, in addition, to be paid rehabilitation grant. In some States compensation was a multiple of the revenue assessment. Yet in some other States compensation was correlated with the market value of land, (e.g., in Kerala).

The compensation was, however, to be paid in cash or in bonds. These bonds were to be redeemed in equal instalments spread over a long period ranging between 10 to 30 years in various states. The big proprietors were to be given bonds but the comparatively small proprietors were to be paid in cash. The ex-intermediaries were given compensation amounting to Rs. 670 crores in cash and in bonds.

6.0 TENANCY REFORMS

6.1 The problem of tenancy cultivation

Under the Zamindari and Ryotwari systems, tenancy cultivation had been quite common in India. Tenancy cultivation may be done by small proprietors who find that they have an insufficient quantity of land or it may be carried on by landless labourers. Sometimes, the tenants holding land from an intermediary may sublet it for cultivation. Broadly speaking, tenants are divided into three categories: 

1. Occupancy tenants (or permanent tenants), 
2. Tenants-at-will (or temporary tenants), and 
3. Sub-tenants. 

The rights of tenancy of the occupancy tenants are permanent and heritable. They can also receive compensation from the landlords in case they make some improvements on land. They enjoy a fixity and security of tenure which makes them the virtual owners of land. It can be said that the only difference between the occupancy tenant and the peasant proprietor is that the former is required to pay rent to the landlord and the latter to pay land revenue to the state. So, for all practical purposes, occupancy tenants are treated as land owners.

The position of tenants-at-will and that of subtenants is extremely weak. They are subject to ruthless exploitation. Frequent enhancement of rent, evictions on minor pretexts of several kinds, extractions and begar (bonded labour) are some of the ways of exploitation. In a country where the demand for land is much more than its supply on account of a growing population, exploitation of weak and unprotected tenants is a widespread evil. Fifty per cent of the produce was the normal rent under Batai or share-cropping. On several occasions, the peasants had to forego even two-thirds of the produce as rent. A situation like this coupled with insecurity necessisted tenancy reforms.

6.2 Extent of tenancy

The National Sample Survey in 1953-54 (8th Round) made an estimate of the land held under tenancy and sub-tenancy in different parts of India (occupancy tenants were excluded). The percentage of area leased out varied from 11 to 26 per cent, though the all-India average was 20 per cent. It showed that about one-fifth of the total area was held under tenancy and thus it was not possible to ignore a problem affecting such a wide area. According to 1961 census, 77 per cent of the total cultivating households were in the nature of ownership holdings, 8 per cent on pure tenancy and 15 per cent in mixed tenancy.

Besides this open tenancy, there is a considerable amount of land leased out on the basis of oral or hidden tenancy which accounts for anything between 35-40 per cent of total cultivated area.

6.3 Informal or Oral tenancy

Informal tenancy has been a common feature of traditional agricultural societies. Although attempts have been made to provide security of tenure, redistribution of land and fixation of fair rents, yet informal or oral tenancy has continued to exist even to this day. The term ‘informal tenancy, loosely referred to as oral tenancy, refers to tenancy without legal sanction and permission, or without any written agreement.

In two case studies, one in a district of Eastern U.P. and the other in western U.P. conducted by Mr. D.S. Chauhan, it was revealed that in Eastern U.P., the extent of informal sub-letting was of the order of 29 per cent of the net cultivated area and 17 per cent of landholders were involved in it. In Western U.P., 13 per cent of the net cultivated area was sublet informally and 28 per cent of landholders were involved. A very disturbing feature of the prevailing situation is that formal sub-letting was less than 1 per cent of the total area in the study pertaining to Eastern U.P. and 4 per cent in Western U.P. In other words, bulk of the land is leased out on informal tenancy basis. The overall magnitude of the problem demands serious attention.

The principal purpose of shifting to informal tenancy is to extract higher land rents from tenants. This is more so in view of the high-yielding varieties programme which has brought a realisation among landlords that land is a very valuable asset and promises high rate of return. In a country marked by land hunger, it is possible to take advantage of the situation by charging high rents. Secondly, informal tenancy arrangements are a convenient device with the landlords for nullifying tenancy reforms. Thus, unrecorded or clandestine tenancy perpetuates a semi-feudal land system which was sought to be abolished by measures of land reform.

6.4 Measures of tenancy reform

The legislation for abolition of intermediaries was aimed at providing land to the tiller but it did not put an end to the problem of tenancy. Some leasing is bound to remain. A widow or an unmarried woman, a minor or a person suffering from mental infirmity and members of the armed forces may have to lease out their lands. Moreover, even with the limit of ceiling, it may not be possible for a family to cultivate the entire land and so some sub-letting is unavoidable. Besides, in order to induce agricultural population to take over to non-agricultural occupations, some sub-letting to tenants may be allowed. A total ban on letting or sub-letting land would neither be socially desirable nor administratively practicable. It is, therefore, more rational to take measures to minimise the evils of tenancy cultivation. 

Measures of tenancy reform pertain to the following:

6.4.1 Regulation of rents

During the pre-Independence period, rents were fixed either by custom or were the result of the market forces of demand and supply. Supply of land being fixed, the demand for land growing with an increasing population, there has been a continuous tendency for rents to rise. The decay of handicrafts increased the dependence on land further and thus pushed up rents. Rack-renting was a common feature of the Indian agrarian structure.

It was, therefore, imperative that rents should be fixed by enacting legislation. The rates of rent prevalent were one-half of the produce or more. Considering the return on investment in other sectors of the economy, these rents were excessive by any standard of social justice. Consequently, the First and the Second Plan recommended that rents should not exceed one-fourth or one-fifth of the gross produce. Various States have passed necessary legislation regulating rents, but there are large variations in the rates of rents fixed in different states. In Gujarat, Maharashtra and Rajasthan, one-sixth of gross produce is fixed as maximum rent. In Assam, Karnataka, Manipur and Tripura, maximum rents vary between one-fourth to one-fifth of the gross produce. In Punjab, one-third of produce has been considered as fair rent, while in Tamilnadu it is between 33.3 and 40 per cent of gross produce. In Jammu and Kashmir, one-third of the gross produce, in Andhra Pradesh one-fourth of the gross produce for irrigated lands and one-fifth in other cases has been fixed  as rent.

Owing to the weak position of the tenants and the prevalence of the widespread land hunger, the law regulating rents is observed more in its breach than in its compliance. The Third Plan rightly asserted : “When there is pressure on land and the social and economic position of tenants in the village is weak, it becomes difficult for them to seek the protection of law. Moreover, resort to legal processes is costly and generally beyond the means of tenants. Thus, in many ways, despite the legislation, the scales are weighed in favour of the continuance of existing terms and conditions”.

Another suggestion in this regard is to fix rents in cash rather than in kind. Historically, rents have been paid in kind in India but in view of the fact that the peasants have to make a good many payments in money, while purchasing seeds, fertilisers, implements and other necessaries of life, it would be desirable to switch over to cash payment of rents. This is in fitness with the requirements of a rural economy changing rapidly from barter to money exchange.

6.4.2 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 in into a desert”. This remark very pithily sums up the need for providing security of tenure. The personal interest of a cultivator in land with rights of temporary tenancy is very thin. Tenants, therefore, take much less care in preparing land, sinking capital in the form of wells or tube wells on land, or putting up a permanent fence etc. The fear of loss of tenancy right saps all initiative to make improvements on land, reclaim waste-land or make long-term schemes of preserving soil fertility. Consequently, the ends of social justice and maximum production both necessitate the adoption of legislation granting security of tenure. The purpose of such legislation should be to confer the rights of permanent occupancy.

While framing legislation pertaining to security of tenure, three essential aims have to be kept in mind — firstly, that large-scale ejectments of tenants do not take place; secondly, that resumption of land may be taken up by the owner for personal cultivation only; and thirdly, that in the event of resumption, a prescribed minimum area is left with the tenant.

6.4.3 Ownership rights         

Experience of the implementation of zamindari abolition showed that, on the plea of resumption for personal cultivation, evictions of tenants took place on a massive scale. There is no doubt that in certain cases and categories of holders resumption should be allowed, but the plea of resumption should not lead to large-scale ejectment of tenants. For this purpose safeguards are needed. 

During the Second Plan, states framed provisions for resumption broadly on the following three different patterns:

1. All tenants have been given full security of tenure, without giving the owners the right of personal cultivation (UP, W Bengal, Delhi);
2. Owners have been given the right to resume a limited area (not more than a family holding in any case) subject, however, to the condition that a minimum area is left with the tenant (Gujarat, Kerala, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Himachal Pradesh, Assam and Punjab);
3. A limit has been placed on the extent of land which a land-owner may resume, but the tenant is not entitled to retain minimum area for cultivation in all cases  (Jammu and Kashmir, Manipur, Tripura and West Bengal (in case of sharecroppers)).

Obviously, the second type of legislation has by and large been accepted  by the states.

6.5 Voluntary surrenders and restorations

Dr. Khusro’s study titled “Economic and Social Effects of abolition of Jagirdari and Land Reforms in Hyderabad” (1948) revealed that evictions of tenants took place on a massive scale. 42 per cent of the tenants suffered at the hands of landed aristocracy and every method, legal or illegal, was applied to compel them to surrender their tenancy rights. Similarly, a study conducted by V.M. Dandekar and G.J. Khundanpur in 1957 on the working of the Bombay Tenancy Act (1948) revealed that in the five years from 1947-48 to 1952-53, the ratio of protected tenants to the total number of tenants declined from more than 60 per cent to a little more than 40 per cent. Moreover, it was disclosed that while on paper 85 per cent of the area resumed by the owners had been voluntarily surrendered, the tenants concerned had in fact been under severe pressure from the owners in about two-thirds of the cases. The net result is that the tenant is reduced to an inferior position of a share-cropper and is subjected to the same risks of exploitation which he faced earlier.                

To check the evil of voluntary surrenders, two recommendations were made. First, the voluntary surrenders of land by tenants should not be considered valid unless they were duly registered by revenue authorities; and second, in case of voluntary surrenders, the land-owner should be entitled to undertake cultivation of land only to the extent of his right of resumption by law. There is much leeway to be covered in implementation in this regard so as to save the poor tenants—the most vulnerable, though the most important section in rural India.

6.6 Rights of ownership for tenants

A very important feature of land reform is the provision of the right of ownership for tenants. The Second Plan considered it very desirable to bring tenants in non-resumable area in direct contact with the State. Earlier the right to purchase was optional to the tenants but this did not prove to be effective.

Thus, the Third Plan suggested that the optional clause be removed and peasants be required to purchase land. Legislation for this purpose was enacted in various states. For instance, in West Bengal the tenants and sub-tenants have been brought into direct relationship with the state by the conferment of full ownership rights. In Punjab, the right to purchase is optional. Legislation has been enacted in Gujarat, Kerala, Madhya Pradesh, Maharashtra, Karnataka, Orissa, Rajasthan, Uttar Pradesh, West Bengal and the Union Territories. It is quite disappointing that in Assam, Bihar, Jammu and Kashmir and Tamil Nadu, no provision exists even for an optional right of purchase. While the state can facilitate the transfer of ownership rights from the landlords to the tenants, no financial burden is imposed on the state. Till date, 124.2 lakh tenants have got their rights protected over an area of 156.3 lakh acres.

7.0 Legal Protection to Tenants

Unable to bring about redistribution of ownership of land, the legislation attempted to provide security of tenure to tenants, to fix land rents and conditions of tenancy. Legislation of this type, Myrdal opines, “which leaves the landlord in possession of his land while attempting to ameliorate the tenant's plight, is a compromise solution, both politically and economically”. Moreover, tenancy legislation being not comprehensive failed to grasp the interdependence of fixation of ceiling on rents and security of occupancy rights. Myrdal focuses attention on this problem in the following words : “In the absence of limits on rents, all rules about security of tenure can be nullified; the landlord can simply raise the rent beyond the tenant's capacity to pay and legally evict him for non-payment. By the same token, legislation on maximum rentals is meaningless if not buttressed by security of tenancy”. Besides this, legislation aimed to provide security to a minority of tenants who paid fixed rentals and left out the majority of the share croppers who represented the more vulnerable section of the Indian peasantry.

Mr. Ladenjinsky, an American expert on land reforms, after a detailed survey of Tanjore district, observed : “Tanjore ... is a district with one of the nation's worst land tenure systems ... Some 20 per cent of the tenants held oral leases which deprives them of any legally enforceable tenurial status. Although the law prescribes that the owner shall not be entitled to more than 40 per cent of the produce as rent, such is   the pressure of population on land ... that the landlord  often appropriates 50 or 60 per cent of the crop or more”.

8.0 CEILING ON LAND HOLDINGS

In India and otherwhere in the world, the main thrust of land reforms is that beyond a certain specified limit, all lands belonging to the landlords would be taken over by the state and allotted to users of land, thereby eliminating wastage of lands, concentration of income in the hands of owners of land and ensuring social justice. Land is to be transferred to small proprietors to make their holdings economic, or to landless labourers to meet their demand for land.

Professor D.R. Gadgil justifying an absolute limit to the amount of land to be held by an individual observed : “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 surface of land by a single individual unless other overwhelming reasons make this highly desirable. Moreover, in the context of the current socio-political climate, redistribution of land would rather appear to be imperative”.

Thus, the case for pursuing a policy of imposition of land ceiling is made out on the following grounds :

1. In the rural sector, land is the principal source of income. If land benefits only a minor fraction of the rural population, land ownership fails to meet the ends of social justice. Therefore, the best course of bringing a reduction in inequalities of income is to bring about a reduction in inequalities of land-ownership.
2. A policy of application of capital-intensive methods in Indian agriculture will lead to unemployment on a massive scale. Consequently, the Indian government’s policy is to create a large number of small peasant  proprietors. Fears have been expressed by critics that the policy of breaking big estates will transfer land from the resourceful landlords to the resourceless peasants or tenants. It is alleged that such a policy may enlarge employment, but will adversely affect production.

8.1 Is big necessarily good?

Farm management studies reveal that gross output per acre is greater on small farms than on large farms. According to Professor Lewis, the size of farm is not very material in securing high yields. The experience of Japan, where small farms is the norm, justifies that labour-intensive methods can result in higher productivity per acre. In Japan, the average size of holding is 1.2 hectares and the yield per  hectare for rice is 52.5 quintals. In U.S.A. where the average size of holding is 124 hectares, the yield per hectare is 52 quintals, almost equal to that of Japan. Similarly, the large-sized collective farms of erstwhile U.S.S.R. have not been able to produce yield rates comparable to those of Japan. The yield per hectare of rice in the U.S.S.R. was 40 quintals. Consequently, this contrarian historical evidence supports the imposition of ceiling because such a policy can enlarge employment, and while meeting the ends of social justice does not in any way reduce productivity.

Legislation for ceiling on existing holdings and unit of application has been enacted in two phases. During the first phase which lasted up to 1972, ceiling legislation largely treated land holder as the unit of application. After 1972, it was decided to have family as the basis of holding. Further, the ceiling limit was also reduced to bring about a more equitable distribution of this scarce asset. 

The imposition of ceiling on existing holdings is a knotty problem. In this case, a reorganisation of the present land system has to be effected. For this, a thorough verification of ownership rights has to be made. With it are connected a good many problems, viz., mala fide transfers, exemptions and disposal of surplus land.

8.2 Problems in imposition of ‘land ceilings’

The following factors contribute to inability to identify the proper owners of land and hence make land ceiling ineffective.

8.2.1 Mala fide transfers (in bad faith)

The legislation pertaining to ceiling on holdings led to a large number of mala fide transfers. These transfers are principally of three types: 

1. transfers among the members of the family, 
2. benami transfers and other transfers which have not been made for valuable consideration and through a registered document, and 
3. transfers made for valuable consideration through a registered document. 

Since it has been decided to apply ceiling legislation to the aggregate area owned by a family and not by individuals, transfers falling under (a) and (b) may be disregarded. However, transfers falling under (c) may need to be dealt with separately. It is necessary to protect the rights of such transfers, at any rate, up to a prescribed limit, say, a family holding. Plugging of mala-fide transfers is quite essential because they go against the spirit of land reforms.

8.2.2 Compensation and allotment of ‘Surplus Lands’

Ceiling legislation aims at obtaining surplus lands above a specified limit and then passing it on to small holders, evicted tenants or landless persons against the payment of a purchase price. Thus, this problem has two aspects:

(i)compensation that may be paid to the landowners for the acquisition of surplus land; and 

(ii)the price that may be recovered from the allottees of surplus lands.

With regard to the price to be recovered from the allottees, it has been suggested that the purchase price should be so fixed that the annual burden falling on the allottee on account of instalments of compensation and interest payable thereon, if any, and the land revenue should not exceed the fair rent i.e., one fourth, or one-fifth of the gross produce. The total amount payable as compensation should be recovered from the allottees so that there is no net liability on the state.

8.3 Progress of measures undertaken under ceiling legislation

Till 1972, only about 23 lakh acres were declared surplus in India under the old ceiling Acts, out of which only about 13 lakh acres were redistributed. In Bihar, Karnataka, Orissa and Rajasthan, no land was declared surplus on the imposition of ceiling legislation. Obviously, the partitioning of land or benami transfers had taken place before the imposition of ceiling. There was considerable criticism in the country about the ceiling legislation and the way it was being implemented. The following guidelines were established for implementation of land ceiling in “The Conference of the Chief Ministers” held in July, 1972:

1. The best category of land in a State with assured irrigation and capable of yielding at least two crops a year should have ceiling within the range of 10 to 18 acres, taking into account the fertility of the soil and other conditions.
2. In the case of inferior land, ceiling may be higher but should not exceed 54 acres.
3. The unit of application shall be a family of five members, the term family being defined as to include husband, wife and three minor children. Where the number of members in the family exceeds five, additional land may be allowed for each member in excess of five in such a manner that the total area admissible to the family does not exceed twice the ceiling limit for family of five members.
4. The ceiling should not operate on land held under tea, coffee, rubber, cardamom and cocoa.
5. Ceiling should not operate on land held by industrial or commercial undertakings for non-agricultural purposes.
6. State governments may, in their discretion, grant exemption to the existing religious, charitable and educational trusts  of public nature.
7. In the distribution of surplus land, priority should be given to landless agricultural workers, particularly to those belonging to the scheduled castes and the scheduled tribes.
8. Compensation payable for the surplus land on imposition of ceiling laws should be fixed well below the market value of the property so that it is within the capacity of the new allottees.
9. The compensation may be fixed in graded slabs and preferably in multiple of land revenue payable for the land.

9.0 Distribution of Surplus Land

Following the guidelines laid down by the Chief Ministers Conference, state governments had revised ceiling legislation lowering the ceiling limits based on the conditions prevailing in the states. 

According to the Annual Report (2004-05) of the Ministry of Rural Development, since the inception of ceiling laws on agricultural holdings, upto 31st March, 2004, total quantum of land declared surplus in the entire country was 73.36 lakh acres, out of which about 64.97 lakh acres have been taken possession of and a total area of 54.03 lakh acres has been distributed to 54.84 lakh beneficiaries, of whom around 36% belong to the Scheduled Castes and around 15% to the Scheduled Tribes. But as facts stand, the progress of distribution of surplus land was palpably slow. Between March 1990 and March, 2004 - a span of 14 years - only 7.36 lakh acres could be distributed.

In addition to the distribution of 54.03 lakh acres of ceiling surplus land, an area of 147.5 lakh acres of Government wasteland has also been distributed among the landless and the poor.

Out of a total area of 39.16 lakh acres of Bhoodan land, 21.75 lakh acres have been distributed upto 31st March 2004.

The area declared surplus so far is less than 2% of the cultivated area. The main reasons, as outlined by the Government in Ministry of Rural Development Annual Report (1992-93) are as under:

1. Provisions for holding land up to twice the ceiling limit by families with over 5 members;
2. Provision to give separate ceiling limit for major sons in the family;
3. Provision for treating every shareholder of a joint family as a separate unit for ceiling limit;
4. Exemption of tea, coffee, rubber, cardamom and cocoa plantations and lands held by religious and charitable institutions beyond the normal ceiling limits;
5. Benami and farzi (fictitious) transfers to defeat the ceiling limits;
6. Misuse of exemptions and mis-classification of land;
7. Non-application of appropriate ceiling to lands newly irrigated by public investment.

The Government, however, is aware that the officially estimated surplus is only a fraction of the area held in large ownership holdings. “According to the National Sample Survey (26th Round, 1971-72) the area owned in holdings of 30 acres or more was 57.81 million acres. Allowing for self-cultivation by surplus owners, the potential surplus would be 21.51 million acres. Similarly the area owned in holding of 50 acres or more was 25.87 million acres and after the self-cultivation deduction the potential surplus would be 8.37 million acres.” According to this estimate, the surplus land should have been 30 million acres and not merely 7.4 million acres. The superficial manner in which land reform has been dealt with since 1977 leaves little doubt in the minds of observers that the approach to acquiring surplus lands, plugging loopholes in tenancy cultivation, reducing rents, preparation of land records and redistribution of land among the landless labourers and marginal farmers will continue to be casual and halfhearted.

The slow progress of land ceilings may partly be explained by litigation. About 1.6 million acres (or 38 per cent) of the area declared surplus under the ceiling laws was under litigation, with Andhra Pradesh topping the list with 5 lakh cases followed by West Bengal and Karnataka. While litigation has been an inhibiting factor, there is no explanation as to why thousands of acres, not affected by writ petitions, have not been even scrutinized.

10.0 Implementation of Ceiling Laws

To implement ceiling laws, it is necessary to make a complete survey of the lands held in ownership by different persons/families in the village. To make a historical analysis of the ownership of land to study problems like partitioning of land, to evade the ceiling law by voluntary surrenders, or forced evictions, it would be relevant to identify big landowners in a village and prepare genealogical trees for each family. This will enable the government to know the amount of land held in ownership before the introduction of ceiling legislation and the manner in which it was dispersed among the members of the family. Sometimes it is very difficult to comprehend the dispersion of land ownership over time from official records. Land-owners by various ingenious devices try to conceal the ownership or make clandestine transfers. For instance, land owners reclassify lands under exempted categories like orchards, sugarcane plantations, tank fisheries, etc. Similarly, bogus charitable/ religious trusts are created to secure exemption. For all these sham and clandestine actions, the landlords are able to obtain the seal of civil courts. To undo the wrong done by the civil courts in collusion with landed aristocracy, it would be appropriate to conduct spot surveys so as to bring about consequential correction of record of rights. The land reform legislation should also have provisions to enable reopening of cases settled by Tribunals/Courts earlier.

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