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Friday, April 23, 2021

Land reforms for a $5 Trillion economy & more.

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As India aims to attain $ 5 Trillion economy, major reforms are needed in all
four major pillars of economy, these are land, labour, capital & organisation.
The present dispensation has initiated reforms in 3 out of these 4 segments viz
labour reforms have been started by simplifying labour laws. Bank mergers and
bank privatisation, public listing of LIC, creation of bad banks is being
contemplated which will help to improve lending and capital formation.

On organisational front our entrepreneurs and start-ups have proved their mettle
in developing world class organisations.
One major reforms which is yet to take off from the drawing board is Land
reforms, which has the potential to bring huge prosperity to rural population, in
absence of Land reforms we find that a large segment of rural population
migrating to urban areas in search of employment, in spite of owning land
which could have been leveraged to generate low-cost capital
Historical perspective
Before the colonial rule, land used to be in the hands of community. The British
introduced permanent settlement and appointed land lords who came to be
known as zamindars or jagirdars, they paid a fixed commission to East India
company. Farmers purchased land from zamindars and gave it on hire for
cultivation to tenants, there were also landless labourers who tilled the land in
return for remuneration.
The tenants paid rent in cash or crop or a mix of both. Thus, the zamindars
formed an intermediary between the state and the farmers and they in turn
appointed series of intermediaries to collect rents, this led to exploitation of
farmers, abandoning of agriculture and migration of population from villages to
cities
The colonial rulers treated land only as a source of revenue, so much so that the
district administrators came to be known as “District collectors” a nomenclature
which is still in use.

Land reforms -Post Independence
Due to exploitation of rural population with the introduction of intermediaries,
widespread movements happened for the rights of share croppers and landless
labourers in the pre- and post-independent India.
The “Tebhaga” movement in the 1940s pressed for reducing share crop
payment to the zamindars. The movement was primarily concentrated in the
Bengal province. At that time the sharecroppers had to give half of their
produce to the landlords, the demand of the movement was to reduce this to one
third, subsequently this movement led to enactment of major land reforms in
West Bengal viz Operation Barga which led to giving land rights to share
croppers.
The constitution also listed land as a state subject which led to dissimilarity in
land reforms across states, this affects industry and investment as investors have
to deal with different policies in different states
Decreasing size of Land holding: – Over the years the benefits from land
reforms started diminishing as property got divided among the children of land
owners thereby reducing the size of land holdings, this coupled with archaic
laws prevented the sale of agricultural land for non-agricultural use, which
prevented the farmers to leverage their land and take loans
As per the 10th agricultural census 2015-2016, there are five kinds of land
holdings in India according to the sizes, which are as follows: –
Sl No Size-Groups Classes (In hectares)

  1. Marginal Below 0.50
    0.50 < 1.00
  2. Small 1.00 < 2.00
  3. Semi Medium 2.00<3.00
    3.00 < 4.00
  4. Medium 4.00 < 5.00
    5.00 < 7.50
    7.50 < 10.00
  5. Large 10.00 < 20.00
    20.00 & above
    Source: All India report on agriculture census 2015-16

The average size of holdings had shown a continuous decline over all the census
periods from the fact that in 1970-71 it was 2.28 hectares, which reduced to 2.00
hectares in 1976-77, 1.84 hectares in 1980-81, 1.69 hectares in 1985-86, 1.55
hectares in 1990-91, which again declined to 1.41 hectares during 1995-96, 1.33
hectares in 2000-01, 1.23 hectares in 2005-06, 1.15 hectares in 2010-11 and 1.08
hectares in 2015-16.
Small and Marginal holdings constitute 86.2 % of total land holdings at
present,13.2 % is medium and rest is Large land holdings.
Title deeds -An Inconclusive proof of land ownership
Land ownership is determined on the basis of title deeds in states, the title deed
is not conclusive proof of ownership, it is only a transfer of title , as a result banks
also insist for other collaterals apart from title document while sanctioning loans,.
As a result, only 3 % of private and public land is leveraged for capital. Absence
of conclusive ownership title has other impacts as well, about 60 -70 % of court
cases are clogged by land related disputes, migrants labour leave their family
behind in the villages due to fear of losing their property to land grabbing by
relatives or land mafia
Use of Technology to resolve legacy issues in Land reforms
The issues plaguing landowners can be solved with the extensive of technology,
at present 23 states have digitised their land records and land registration process,
under the Govt of India’s Digital India Land record modernisation programme
(DILRMP),
India must move from description of property by tahsildars or registrars to
digitally geo tagged land boundaries with the help of drone and linked to the
owner/s Aadhar, this will also lead to identification of Ghost owners and weeding
them out, the title should be authenticated by the government which will lend
credibility to property documents, the documents can then be made in to
dematerialised forms and facilitate in ease of transfer, storage etc. This can also
be used to facilitate long term lease of lands from the owner instead of the present
method of land acquisition where the land owner feels short changed once the
market prices rise as commercial activities, infrastructure development takes
place in the acquired land
The Swamitva Yojana initiated by Govt of India is a step in the right direction, it
aims to address many of the issues plaguing the land ownership in the country,

the scheme envisages mapping of land in rural areas by the use of drone
technology and satellite mapping and setting the boundaries to the property
without errors
The respective owners of the property will get the property card after the survey,
this card can be used to get loans from banks there by saving the villagers from
loan sharks, middlemen and micro finance companies charging high rate of
interest
This will also unlock huge amount of capital in rural areas, which will spur
entrepreneurship in villages thereby triggering huge economic growth.
Another possible solution could be community ownership of Land in the form of
a company with each farmer having a stake or share, this will help in collective
bargaining, pooling of resources, risk mitigation etc, however there should be an
Independent regulator overseeing the such companies
The Land reforms thus have the potential to make India more than a $5 trillion
economy

Author : R VISVESVARAN

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