Top 10% rural households own 44% land in India: World Inequality Lab study findings, explained

The paper draws its findings from the Socio-Economic Caste Census conducted in 2011, which covered 650 million individuals from 270,000 villages across ten of the largest states of India — Punjab, Uttar Pradesh, Bihar, Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Tamil Nadu, Kerala, and West Bengal — accounting for approximately 75% of the rural population.

Land inequality among states

The share of land owned by the top household ranges from a low of 7.3% in Uttar Pradesh to a high of 20.1% in Bihar, the working paper said. Among the four states where dependency on agriculture is particularly high, Rajasthan (34%) and Uttar Pradesh (39%) have a relatively lower level of landlessness than Madhya Pradesh (51%) and Bihar (59%). Punjab, known for its highly developed commercial agriculture sector, has the highest level of landlessness at 73%, the paper said.

As per the all-household Gini measure, Kerala has the highest Gini coefficient at 90, followed by Bihar, Punjab, Tamil Nadu and West Bengal, each with a Gini coefficient of around 80. Karnataka and Rajasthan have the lowest Gini coefficient of below 65, the paper stated. A lower Gini coefficient indicates a more equal distribution of income or wealth within a population, meaning a smaller gap between the rich and poor. “Excluding landless population reduces the Gini coefficient for all states, and reduces variation across states, indicating that landlessness contributes significantly to the all-household Gini measure,” it said.

Land ownership pattern

While 46% of rural households are landless, among the landed households the average size of a landholding is 6.2 hectares. However, 28.9% of land is held by households with 0-1 hectares, and 48.6% by households with 1-2 hectares, the working paper stated. The mean share of land held by the largest landholder in the village is 12.4%, while in 3.8% of villages the largest landholder owns more than 50% of the land, it said.

Agricultural suitability, market access collectively account for 18.3% of variation in land inequality, the paper said, adding that areas with higher agricultural suitability have higher land inequality. “Villages with more favourable agro-ecological conditions tend to have greater land concentration, increasing the share of land controlled by large landowners,” it said. Places with a higher Scheduled Caste (SC) population share have substantially higher levels of inequality, driven entirely by landlessness, it said.

The market access-variables also indicate land inequality, as proximity to towns, roads, and markets appears insufficient to overturn deeply embedded patterns of land inequality, the paper said. Villages in closer vicinity to towns, large highways, and railroad stations have greater inequality, it said. “…we see that inequality is elevated up to further distances from towns (10kms) than roads and railway stations (2.5kms). Additionally, villages with a bank or an agricultural market (mandi) have higher inequality, but there is no relationship in nearby villages,” the paper said.

The impact of historical institutions on land distribution is “strongly persistent”, the paper said, adding that villages in “princely states” — polities earlier governed by indigenous royal households — show lower levels of land inequality amongst all households compared to directly-ruled British areas, on average. Land inequality is approximately 2-3 percentage points lower within princely states and 3-4 percentage points higher in places having the zamindari system. “This is driven primarily by a lower share of landless households, as there is no significant impact when examining the landowner Gini alone. In contrast, zamindari (landlord) areas clearly show higher levels of land inequality, driven by a marked reduction in the share of small farmers and a notable presence of dominant landlords,” it said.