B.A L.L.B. 2nd Year ECONOMICS – II Unit – 2 (Economics Notes)

B.A L.L.B. 2nd Year ECONOMICS – II Unit – 2

Unit -2


  • Features of Indian Agriculture
  • Problem of Indian Agriculture
  • Land Reform in India
  • Consolidation of Holdings
  • Impact on poverty elevation in India



Agriculture is the backbone of Indian economy because of its high share in employment and livelihood creation. The share of agriculture in the gross domestic product has registered a steady decline yet this sector provides direct employment to more than fifty percent of total workforce in the country and a large proportion of the population depends upon agro-based industries and trade of agriculture products. It is also an important source of raw material and demand for many industrial products, particularly fertilizers pesticides, agricultural implements and a variety of consumer goods contribute significantly to the exports.  However, the growth of agriculture over a period of time remained lower than the growth in non-agriculture sectors.

 Features of Indian Agriculture

  • Subsistence agriculture:As mentioned earlier, most parts of India have subsistence agriculture. This type of agriculture has been practiced in India for several hundreds of years and still prevails in a larger part of India in spite of the large scale change in agricultural practices after independence.
  • Pressure of population on Agriculture: Despite increase in urbanization and industrialization, about 70% of population is still directly or indirectly dependent on agriculture.
  • Mechanization of farming: Green Revolution took place in India in the late sixties and early seventies. After more than forty years of Green Revolution and revolution in agricultural machinery and equipments, complete mechanization is still a distant dream
  • Dependence upon monsoon: Since independence, there has been a rapid expansion of irrigation infrastructure. Despite the large scale expansion, only about one third of total cropped area is irrigated today. As a consequence, two third of cropped areas is still dependent upon monsoon. As you know, monsoon in India is uncertain and unreliable. This has become even more unreliable due to change in climate.
  • Variety of crops: Can you guess why India has a variety of crops? As mentioned in the beginning of the lesson, India has diversity of topography, climate and soil. Since India has both tropical and temperate climate, crops of both the climate are found in India. There are very few countries in the world that have variety comparable to that of India. You would realize that when we would discuss the different type of crops in detail. Look at the table No.1 to get an idea.
  • Predominance of food crops: Since Indian agriculture has to feed a large population, production of food crops is the first priority of the farmers almost everywhere in the country. However, in recent years, there has been a decline in the share of land used for food crops due to various other commercially most advantageous uses of these land.
  • Seasonal patterns: India has three distinct agricultural/cropping seasons. You might have heard about kharif, rabi and zaid. In India there are specific crops grown in these three seasons. For example rice is a kharif crop whereas wheat is a rabi crop.


Problem of Indian Agriculture

  • Instability:Agriculture in India is largely depends on monsoon. As a result, production of food-grains fluctuates year after year. A year of abun­dant output of cereals is often followed by a year of acute shortage.

This, in its turn, leads to price income and employment fluctuations. However, for the thirteen year, in successive (1987-88 to 1999-00) a normal monsoon has been observed.

·                    Cropping Pattern:The crops that are grown in India are divided into two broad catego­ries: food crops and non-food crops. While the former comprise food-grains, sugarcane and other beverages, the latter includes different kinds of fibres and oilseeds.

·                    Land Ownership:Although the owner­ship of agricultural land in India is fairly widely distributed, there is some degree of concentration of land holding. Inequality in land distribution is also due to the fact that there are frequent changes in land ownership in India. It is believed that large parcels of land in India are owned by a- relatively small section of the rich farmers, landlords and money-lenders, while the vast majority of farmers own very little amount of land, or no land at all.


·                    Land Tenure:The land tenure system of India is also far from perfect. In the pre-independence period, most tenants suffered from insecurity of tenancy. They could be evicted any time. How­ever, various steps have been taken after Independ­ence to provide security of tenancy.

·                    Other Problems:There are various other problems of Indian agriculture.

·                    These are related to:The systems and techniques of farming, the marketing of agricultural products and land reforms mean equitable redistribution of land with the aim of increasing productivity and decreasing poverty. It refers to the redistribution of land from the few who have to the many who are landless or own far too little.



Traditionally, in India before the coming of the British, private ownership of land was an unfamiliar idea. Land was generally owned by the village community collectively. A proper land revenue system was initiated by Todar Mal during the reign of Akbar. Under this system, land was measured, classified and rent was fixed accordingly. When the leash of power went into the hands of the British, a sea-change was seen in the pattern of ownership of land in India.

Land ownership patterns under the British rule


Lord Cornwallis introduced the Permanent Settlement in 1793. Under this system, a class of landlords called Zamindars was created whose responsibility it was to pay a fixed rent to the government for the lands they owned. They gave out parcels of land to farmers who became their tenants. Their title to the land was hereditary. What was intended as a system beneficial for all parties concerned soon turned out to be exploitative. The State was only concerned with maximising revenue with minimum effort. The Zamindar too wanted maximum rent from his tenants irrespective of the land’s true potential. He could increase his own wealth by extracting most out of his farmer tenants since his due to the State was fixed. In addition, several layers of intermediaries were created between the Zamindar and the tenants adding to the burden. The landless farmers and labourers suffered greatly in poverty. Also, this led to the creation of a group of rich Indians whose loyalty lay largely with the British. As you can see the Permanent Settlement gave rise to the Zamindari system of tenancy in Bengal and soon was adopted in other regions.

Another system was called the Jagirdari system which was similar to the Zamindari system.


Under this system, the proprietor of land gave the rent and taxes directly to the government in the absence of any middlemen. This started in Madras and was later adopted in Bombay as well.


This system was introduced by William Bentinck’s government under which landlords were responsible for the payment of revenue to the State. These landlords or Zamindars had a whole village or a group of villages under their control. The Mahalwari system prevailed in UP, the North Western Province, Punjab and parts of Central India.

Outcomes of landowning systems during the colonial era

  • Extreme peasant indebtedness due to sky-high tax rates.
  • Creation of a class of a rich few who mostly exploited the poor peasant.
  • Peasants lived in constant fear of eviction.
  • Poverty was entrenched into the farmer class.


These systems created, at the time of independence, a class of landlords who owned large swathes of land and innumerable peasants who owned nothing and lived in dire poverty and misery. The following figures will reveal this.7% of the landowners owned 54% of land. In contrast, only 6% of land was owned by 28% of landowners (with marginal and sub-marginal holdings).

Land reforms since independence

Land reforms refer to the regulation of ownership, operation, leasing, sales, and inheritance of land.

Objectives of land reforms:

  • Redistribution of land across society so that land is not held in the hands of a few people.
  • Land ceiling to disburse surplus land amongst small and marginal farmers.
  • Removal of rural poverty.
  • Abolition of intermediaries.
  • Tenancy reforms.
  • Increasing agricultural productivity.
  • Consolidation of land holdings and prevention of land fragmentation.
  • Developing cooperative farming.
  • To ensure social equality through economic parity.
  • Tribal protection by ensuring their traditional land is not taken over by outsiders.
  • Land reforms were also for non-agricultural purposes like development and manufacturing.


Out of these the major objectives post-independence were abolition of intermediaries, regulation of tenancy, land ceiling, consolidation of fragmented holdings.

In India, the abolition of intermediaries who existed under the various British systems has largely been successful. The other objectives have yielded mixed results and vary across states and over time periods. Land reforms come under the State List and so, the success of land reforms varies from state to state. The most comprehensive and successful reforms took place in the communist strongholds of Kerala and West Bengal. Andhra Pradesh, Madhya Pradesh and Bihar saw inter-community clashes as a result of land reforms.

India has seen four ‘experiments’ since independence to redistribute the land holdings. They are:

  1. Reforms from ‘above’, i.e., through legislation.
  2. Reforms from above from the government coupled with peasant mobilisation; like in Kerala and West Bengal where land was seized and redistributed; and also to improve the conditions of peasants.
  3. Naxalite movement and also the ‘land grab’ movement.
  4. Reforms from ‘below’ through voluntary donations by landlords and peaceful processions by farmers like the Bhoodan movement and the Gram Dan.

Zamindari Abolition Acts

Initially when these acts were passed in various states, they were challenged in the courts as being against the right to property enshrined in the Indian Constitution. So, amendments were passed in the Parliament to legalise the abolition of landlordism. By 1956, Zamindari abolition acts were passed in many states. As a result of this, about 30 lakh tenants and share-croppers acquired ownership rights over a total of 62 lakh acres of land all over the country.

Land Ceilings Act

Land ceiling refers to fixing a cap on the size of land holding a family or individual can own. Any surplus land is distributed among landless people like tenants, farmers, or agricultural labourers.

Tenancy reforms

This focused on three areas:

  1. Rent regulation
  2. Tenure security
  3. Conferring ownership to tenants


Land policy formulation through planning period (Five Year Plans)

Plan Period Chief Issue Policy Thrust
First Plan 1951 – 56 Increase area under cultivation. Community Development networks to take care of village commons. Increase land under cultivation. Rights to tenants to cultivate land. Abolition of intermediaries.
Second Plan 1956 – 61 Agriculture mostly dependent on rains alone. Low land productivity. Soil conservation. First phase of land reform implementation. Irrigation development.
Third Plan 1961 – 66 Food security concern. Cultivable waste land to be cultivated. Including all regions into growth. Intensive area development programme adopted for selected districts. Soil surveys.
Fourth Plan 1969 – 74 Food security concern. Minimum dietary requirements to be met. Incentives for cultivating food crops. Technical efficiency. Irrigation and soil conservation in dry land regions. Technological changes. Second phase of land reforms with land ceiling acts and consolidation of holding.
Fifth Plan 1974 – 79 Problems of degradation. Drought-prone areas. Drought-prone area development. Desert area development programmes. Soil conservation. Dry farming.
Sixth Plan 1980 – 85 Underutilization of land resources. Drought-prone areas. Land and water management programme under drought-prone area programme in select areas.
Seventh Plan 1985 – 90 Soil erosion. Land degradation. Deforestation. Degradation of forest lands. Soil and water conservation. Prevention of land degradation. Wastelands Development programmes.
Eighth Plan 1992 – 97 Dry land and rain fed areas needing attention. Degradation of land in irrigated command areas. Watershed approach. Soil conservation combined with watershed programmes. Agro climatic regional planning approach incorporated.
Ninth Plan 1997 – 2002 Land degradation. Integrating Watershed Development Programme across various components. Gap between potentials and actual crop yields need to be bridged. Need for a long-term policy document. Bringing underutilized land under cultivation. Management of wastelands. Maintenance of village commons. Decentralized land management system. Panchayati Raj institutions to manage the village lands. Rethinking on land legislation.


Outcomes of Land Reforms

  • Abolition of middlemen like landlords

The powerful class of Zamindars and Jagirdars cease to exist. This reduced the exploitation of peasants who now became owners of the land they tilled. This move was vehemently opposed by the Zamindars who employed many means to evade the law. They registered their own land under their relatives’ names. They also shuffled tenants around different plots of land so that they wouldn’t acquire incumbency rights.

  • Land ceiling

With a cap on the size of land holding an individual/family could hold equitable distribution of land was possible to an extent. With only landlord abolition and no land ceiling, the land reforms would not have been at least partially successful. Land ceiling ensured that the rich farmers or higher tenants did not become the new avatar Zamindars.

  • Land possession

Land is a source of not just economic income but also social standing. Land reforms made it mandatory to have records of holdings, which was not the case previously. It is also compulsory to register all tenancy arrangements.

  • Increased productivity

More land came under cultivation and since tillers themselves became the landowners, productivity increased.Land reforms were largely successful in the states of West Bengal and Kerala because of the political will of the left-wing governments to implement them efficiently. There was a sort of revolution in these places in terms of land holding patterns and ownership, and also the condition of peasants. The backing slogan was ‘land to the tiller’. In Jammu and Kashmir also, there was partial success in the redistribution of land to landless labourers.

Drawbacks of land reforms

  • There are still many small and marginal farmers in India who pray to the clutches of moneylenders and continue to remain indebted.
  • Rural poverty still exists.
  • Land ceiling varies from state to state.
  • Many plantations were exempt from land ceiling act.
  • Many people own huge tracts of land under ‘benami’ names.

Land reforms also include agrarian reforms which deal with measures to improve the productivity of land especially agricultural land. This includes the Green Revolution. To fix the various loopholes in the land reforms, in the late 60s and early 70s, the recommendations of the Central Land Reforms Committee were implemented.

  • The ceiling was lowered according to the crop pattern. It was brought to 54 acres for inferior dry land.
  • For purposes of law, family of five was made one unit.
  • Land distribution was given priority particularly to the landless peasants, SC and ST communities.

The government was responsible for the acquisition of land which it did under the Land Acquisition Act of 1894. This law, being archaic and inadequate to address farmers’ concerns was replaced by the Right to Fair Compensation and Transparency in land Acquisition, Rehabilitation and Resettlement Act of 2013. In 2015, the government proposed a few amendments to the law and introduced the Right to Fair Compensation and Transparency in land Acquisition, Rehabilitation and Resettlement (Amendment) Bill of 2015, which came into effect as an ordinance.

Consolidation of holdings

Consolidation of holdings means the bring together in one compact block all plots of land farmer which are scattered all over the villa.

Under the scheme all land in the village is first pooled into one compact block and it is divided into smaller blocks called chalk and allotted to individual farmer. This is a noble scheme to provide solution to the problem of fragmentation of holdings. The scheme has been launched in 10 states of the country and it has made considerable progress in Punjab, Haryana and Uttar Pradesh.

Up to 31st January, 1956 only 4.5 million hectares of land was brought under consolidation. The figure rose to 33 million hectares by 1972, 45 million hectares by 1985 and 62.97 million hectares by 1995. Out of this, two states like Maharashtra and Uttar Pradesh accounted for 213 lakh hectares and 179 lakh hectares respectively. Punjab, Haryana and Madhya Pradesh are other three states which have taken up the work of consolidation of holdings seriously. Bihar and Jammu and Kashmir have kept the scheme in abeyance and in West Bengal and Assam it has not been implemented.

Taking the country as a whole only 44 per cent of the cultivated land has been brought under this scheme. This de­picts slow progress of the scheme and various hur­dles in its implementation.

(a)     Farmers are generally extremely attached to their ancestral land and, therefore, are not willing to take advantage of the scheme.

(b)     Those farmers who own better quality of land do not like the scheme for fear of getting the inferior quality of land after consolidation.

(c)      Consolidation is a cumbersome process. The government officials who implement the scheme are generally slow and often corrupt.

(d)     In general the scheme did not receive desired support and co-operation from the farmers.

(e)      The scheme has paved way for litigation and court cases many of which are pending in the different court since long time. This vitiates the serene atmosphere of the rural areas.

(f)       Since there is no restriction on the existing law of inheritance and partitioning of field-plots, hence, fragmentation process goes on till the entire gain of consolidation is nullified and need for new consolidation is felt.

(g)     In every consolidation about 5 to 10 per cent of village land is taken out for providing house sites to weaker sections of the society, approach 0chak) roads and village utility services. Hence, if the process is repeated three or four times a sizeable portion of agricultural land would be lost.

(h)     The cost of consolidation is realised from the farmers which has adverse effect on their re­sources and economy.

(i)      It has also been realised that small farmers are generally allotted inferior quality of land and due to lack of money power they are neither able to bribe the officials nor get proper justice in the court.

It is, therefore, imperative that efforts should be made to remove these pitfalls in the consolidation scheme to make it more fruitful and useful.



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