Opinion This Land Is Your Land
Policymakers need to address the real problems in the land market
India is short of prime agricultural land. Manufacturing enterprises want to locate around metropolises, even if the land there has high opportunity costs in terms of agricultural needs. They do not want to use barren land elsewhere.
There seems to be an emerging consensus across the political spectrum, that it is not prudent to tamper with the decade-old and ongoing process of land market reform. The earlier “revenue laws” on registration of titles were a part of a century-old colonial law. The imperial government kept almost complete control over land titles and use. It dispensed land as “inams” to a dependent class, and, in large measure, the freedom movement was created around changing that.
In addition, there emerged the problem of benami transfers of land, which became widespread after land reforms, particularly the land ceiling legislation, in the second half of the last century — while land was shown in the name of the tenant, effective control remained with the landlord. A new kind of problem emerged in the 1970s: Small peasants started giving up their land to middle and large peasants, as they found it easier and more productive to work as landless labourers rather than live off their share of the income from their meagre land holding. This phenomenon was described as reverse tenancy, and in many northern and western states, one-third to two-fifths of the land farmed by middle farmers was leased from small farmers.
The new paradigms that are emerging are not well-known outside the rural set-up and those conversant with Indian agriculture. We still have the “do bhiga zamin” syndrome. In fact, a large number of do-bigha-zamin kisans have moved out of agriculture. The SECC’s big surprise was the increase in rural landless labourers and agricultural occupations. Whether this is because of the pull factor or the push factor on account of the immiseration of large parts of the peasantry is still being debated. If the push factor is dominant, the suffering is great, particularly in years of adverse weather.
As the dust seems to settle on the land acquisition amendments and some consensus seems to be emerging, it is sensible to look at the origins of the ideas floating around. This is of relevance because in the bazaar of policy ideas, bad ones have a nasty habit of surviving.
The land legislation brought in by the UPA retained the eminent domain powers of the state at the margin. By and large, the legislation made a bold effort to create a land market and was an adjunct to the larger process of reform in the economy. The powers of the state were curtailed. Depending on the type of project, up to 80 per cent of land would have to be acquired with consent.
But some experts were critical of using land acquisition for manufacturing enterprises. I was one of them. It is true that land costs are rising and procurement of land for an industrial project is difficult. This, however, reflects the basic scarcity of the resource. India is short of water, energy and prime agricultural land. In addition, manufacturing enterprises want to locate around metropolises, even if the land there has high opportunity costs in terms of agricultural or rural needs. They do not want to use barren land elsewhere. To be fair, we don’t undertake land-use planning by building infrastructure for such alternative locations on a sufficient scale. But the manufacturing sector has to learn to live with the scarcities of the economy. Policymakers should face up to the real problems rather than go back to the colonial way of doing things — the state knows better whom to endow with land.
The land ordinance, which will reportedly be allowed to lapse, is inconsistent with economic reform. Reform means that different economic agents pay the market price of resources, rather than rely on the state’s allocative powers. It is not right for the state to deny the farming community the opportunity to make money from scarcity. It can
be argued that non-market methods are needed to handle scarcities. But that isn’t the policy practice for other commodities. So why discriminate against the farmer?
The writer is professor emeritus, Sardar Patel Institute, Ahmedabad
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