Land Reforms

Definition and need for it:

 Land Reforms is an intervention from the government side into
the possession and use of land. It is often considered as a controversial
alteration in the societal arrangement of ownership of land. Land
reform may consist of a government -initiated or government-backed
real estate property redistribution, generally of agricultural land.

Throughout history, popular discontent with land-related

institutions has been one of the most common factors in provoking
revolutionary movements and other social upheavals. Landowners
have always done injustice to the labors who work on the field, by not
giving them their share of the production

Consequently, land reform most often refers to transfer from

ownership by a relatively small number of wealthy
owners(eg:Zamindars) with extensive land holdings (e.g. plantations,
large ranches, or agribusiness plots) to individual ownership by those
who work the land. Such transfer of ownership may be with or without
consent or compensation; compensation may vary from token amounts
to the full value of the land. The common characteristic of all land
reforms is modification or replacement of existing institutional
arrangements governing possession and use of land.

Situation in India before independence.

India inherited a semi-feudal agrarian system. The ownership

and control of land was highly concentrated in a few landlords and
intermediaries whose main intention was to extract maximum rent,
either in cash or kind, from tenants. As a result, agricultural
productivity suffered and oppression of tenants resulted in a
progressive deterioration of their plight.

As the basis of all economic activity, land can either serve as

an essential asset for the country to achieve economic growth and
social equity, or it could be used as a tool in the hands of a few to
hijack a country's economic independence and subvert its social
processes. During the two centuries of British colonization, India had
experienced the latter reality. During colonialism, India's traditional
land ownership and land use patterns were changed to ease
acquisition of land at low prices by British entrepreneurs for mines,
plantations etc. The introduction of the institution of private property
de-legitimized community ownership systems of tribal societies.
Moreover, with the introduction of the land tax under the Permanent
Settlement Act 1793, the British popularized the zamindari system at
the cost of the jajmani relationship that the landless shared with the
land owning class.By no means a just system, the latter at least
ensured the material security of those without land.
 Owing to these developments, at independence, India inherited
a semi-feudal agrarian system. The ownership and control of land
was highly concentrated in a few landlords and intermediaries whose
main intention was to extract maximum rent, either in cash or kind,
from tenants. Under this arrangement, the sharecropper or the tenant
farmer had little economic motivation to develop farmland for
increased production. Naturally, a cultivator who did not have security
of tenure, and was required to pay a high proportion of output in rents,
was less likely to invest in land improvements, or use high yielding
varieties or other expensive inputs likely to yield higher returns. At the
same time, neither was the landlord particularly concerned about
improving the economic condition of the cultivators. As a result,
agricultural productivity suffered and oppression of tenants resulted in
a progressive deterioration of their plight.

Progress made in India after independence.

In the years immediately following India's independence, a

conscious process of nation building looked upon problems of land with
a pressing urgency. In fact, the national objective of poverty abolition
envisaged simultaneous progress on two fronts, high productivity
and equitable distribution. Accordingly, reforms of the land were
visualized as an important pillar for a strong and prosperous country.
The first few five-year plans allocated substantial budgetary amounts
for the implementation of land reforms. A degree of success was even
registered in certain regions and states, and especially in areas like the
abolition of intermediaries, protection to tenants,
rationalization of different tenure systems and the imposition
of ceiling on land holdings. Fifty-four years down the line, however,
a number of problems are still far from satisfactorily resolved.

Independence brought with it a slew of reforms in the land

system. The land reforms in India can be classified into four phases.
• The first phase concentrated on agrarian reforms to provide
relief to the cultivators and improve the security of tenure. The
period lasted till 1972.
• The second involved bringing more land under cultivation
through consolidation of land holdings between 1972 and 1985.
However, post liberalization of the economy, the land policies
shifted its focus more towards land development and
administration than reforms.
 • The third phase, 1985-95, concentrated on water and soil
conservation through Watershed development, Drought Area
development, etc.
• The fourth phase, 1995-present day, deals with debates on the
necessity to continue land legislations and efforts to improve
land administration and bringing in clarity in land records.

Abolition of intermediaries in 1951 brought cultivators into

direct contact with the State, whose tax revenues increased
considerably. For the farmers, this meant freedom from the
arbitrariness of the zamindars and of the numerous intermediaries, but
the tax burden remained the same with the only difference being that
the government was now the recipient. At any rate, the legal status of
the "occupancy tenants" was now clearer. These measures did not
affect in any way the large number of subtenants who had leased land
from occupancy tenants.

The objective of the tenancy reforms was to establish and

strengthen the tenants' rights. To that end, a minimum leasing period
of 5 to 10 years was introduced, and eviction was only allowed on the
basis of specific reasons. Sub-leasing was forbidden and, in the case of
eviction, the tenant was to be paid compensation for his investments.
Finally, the tenant was granted the right to purchase the land he
cultivated. Sub-tenants who had cultivated a plot of land for already
more than 12 years gained the status of occupancy tenants and were,
thus, protected against eviction. The laws foresaw a restriction of the
rent to one third to one sixth of the gross harvest, with stress on cash
rent rather than produce rent, and payment of the land tax was shifted
to the landlord. To ensure that the lessors were not at a disadvantage,
they were granted the right to give notice in case they wanted to
cultivate the land themselves.

Ceilings on land holdings were effected with a view to

redistribute surplus land to the landless. However, many landowners
having joint family separated their holdings into smaller units among
their family members to avoid expropriation and in the process,
evicted the rightful tenants on their land. Following this, the national
government reduced the ceiling limit further in the year 1972 and
monitored the progress of distribution of surplus land as a part of their
20-Point Program

Implementation of ceilings, in turn, led to reduction in the size

of holdings and marginalization of land holdings. A large number of
experts concurred that further lowering the ceiling would have
negative effect on engendering social equity. This led to the fourth
category of reforms – Consolidation of Land holdings. This was
effected to avoid landowners having many parcels of land scattered
across the village – a result of loopholes in laws pertaining to land
ceiling; and to also improve the economic efficiency of land.

Constitutional Provisions: Land was made a state subject in the

Constitution of India, which was primarily due to differing socio-
economic situation in different regions in India. Thus, all legislations
were enacted in state legislatures. The National Government played
the role of an advisor through its five year plans – in all its 10 plans -
that provided guidelines for land reforms and policies.

The directive principles of state policy clearly indicates

redistribution of land to the actual tillers, in the form of certain clauses
of Article 39, namely (b) that the ownership and control of the material
resources of the community are so distributed as best to subserve the
common good; and c) that the operation of the economic system does
not result in the concentration of wealth and means of production to
the common detriment.
Schedule Nine of the Constitution of India has been amended
many a times to include 284 land laws that capture various legislations
in different states, aimed at land reforms.
Most studies indicate that inequalities have increased, rather
than decreased. The number of landless labor has gone up and the top
ten percent monopolizes more land now than in 1951. Meanwhile, the
issue of land reforms has over the years, either unconsciously faded
from public mind or deliberately been glossed over. Vested interests of
the landed elite and their powerful nexus with the political-
bureaucratic system have blocked meaningful land reforms and /or
their earnest implementation. The oppressed have either been co-
opted with some benefits, or further subjugated as the new focus on
LPG has altered government priorities and public perceptions. As a
result, we are today at a juncture where land, mostly for the urban,
educated elite, and who also happens to be the powerful decision-
maker, has become more a matter for housing, investment and infra-
structure building.In the bargain, the existence of land as a basis of
livelihood – for subsistence, survival, social justice and human dignity
has largely
been lost.

Objectives
It is against this background that the specific objectives of the Project
in India have been articulated as:
• To raise popular and elite awareness on issues related to land,
particularly in the present context of the LPG thrust of the
government since the 1990s.
• To monitor specific projects and programes being aided by
international financial institutions in some states of India in order
to assess their true impact on the rural community directly
affected.
• To monitor and scrutinize national and transnational economic
trends that have a specific bearing on issues related to land and
agriculture.
• To explore the efficacy of the current developmental model that
perceives land only as a factor of production, and not as a means
of survival, equity and dignity.
• To examine possible strategies for facilitating reconciliation
between the claims of the market over land and land reforms to
ensure social change based on justice and equity.
• To document historical strategies of land reforms and place them
in the socio-economic-political context in which they were
effective or not and accordingly cull out lessons for the future.
• To recommend alternative policies and approaches to
contemporary land challenges.
• To provide research and analytical support to the existing land
movements, and facilitate better networking among them.
• To awaken the weakening social consciousness of an
increasingly consumerist society by drawing linkages between
the economic policies of globalization at the macro level and its
impact on human livelihoods at the micro level.

IFIs and Issues Related to Land in India

The task of the articulation of objectives is several times easier

compared to the challenges that lie ahead in realizing these goals. Any
reform is as difficult an economic exercise as a political undertaking
since it involves a realignment of economic and political power. The
groups that are likely to be the losers naturally resist reallocation of
power, property and status. Obviously, the landholding class is unlikely
to willingly vote itself out of possession. Neither should it be expected
that it would be uniformly inflamed by altruistic passions to voluntarily
undertake the exercise. Hence, one cannot underestimate the
complexity of the task at hand.
Loopholes in legislation have facilitated the evasion of some of
the provisions, for instance in ceiling reforms, by those who wanted to
maintain the status quo. At the same time, tardy implementation at
the bureaucratic level and a political hijacking of the land reforms
agenda have traditionally posed impediments in the path of effective
land reforms. Even in states that have attempted reforms, the process
has often halted mid-way with the cooption of the beneficiaries by the
status quoits to resist any further reforms. For instance, with the
abolition of intermediary interests, the erstwhile superior tenants
belonging mostly to the upper and middle classes have acquired a
higher social status. Rise in agricultural productivity, rising land values
and higher incomes from cultivation
have added to their economic strength. These classes have since
become opposed to any erosion in their newly acquired financial or
social status.

Hence, Problems related to land such as concentration, tenancy

rights, access to the landless etc still continue to challenge India. The
criticality of the issue, in fact, may be gauged from the fact that
notwithstanding the decline in the share of agriculture to the GDP,
nearly 58% of India's population is still dependant on agriculture for
livelihood. More than half of this percentage (nearly 63%), however,
owns smallholdings of less than 1 hectare while the large parcels of 10
hectares of land or more are in the hands of less than 2%. The
absolute landless and the near landless (those owning up to 0.2 ha of
land) account for as much as 43% of the total peasant households.

This reality, however, had come to worry the governments little

during the late 1970s and 80s. It was only in the 1990s, with the
initiation of the economic restructuring process that the issue of land
reforms resurfaced, albeit in a different garb and with a different
objective and motivation. If the government-led land reforms had been
imbued with a degree, though the extent is debatable, of desire for
attaining equity, social justice and dignity, the new land reforms
agenda is market-driven, as everything else in this phase of economic
globalization, and has at its heart certain other kinds of objectives.
Being promoted and guided by various IFIs, contemporary emphasis on
land reforms reflects and seeks to fulfill the macro-economic objectives
of these multilateral economic institutions.

While the return of land reforms to the government's list of

priorities is a welcome development, the manner in which it is being
undertaken, its objectives, and consequently the impact on people,
especially those that are already marginalized and are being further
deprived of a stake in the system, raises a number of questions and
prompts one to look for alternatives. The Project, therefore, shall
devote its energies to identifying and monitoring the implementation
of certain specific IFI-sponsored programmes in particular states with a
view to examining their short-term and long-term impact on the lives
and livelihoods of local residents. This shall enable an informed critique
of the IFI- led land reforms programmes and serve as a lesson for
peoples else where in India and in other regions of the globe as well.

Market Led Land Reforms:

The Current Emphasis on Land Administration, Titling and

Registration in their analyses of India's land reforms program, most IFIs
have highlighted that one of the basic problem that the rural poor face
is access to land and security of tenure. Consequently, they advocate
redemption of this situation through structural reforms of property
rights to create land markets as part of a broader strategy of fostering
economic growth and reducing rural poverty.

A large emphasis has, therefore, been placed on the need to

establish the basic legal and institutional framework that would
improve secure property rights as a means to protect environmental
and cultural resources, to facilitate productivity-enhancing exchanges
of land in rental and sales markets, to link land to financial markets, to
use land as a sustainable source of revenue for local governments, and
to improve land access by the poor and traditionally disenfranchised.

The package the IFIs offer includes comprehensive reforms of

land tenure, including titling, cadastral surveys and settlement
operations, land registries, improvements in land revenue systems,
land legislation, land administration, land sale-purchase transactions,
and removal of restrictions on land leasing. In fact, it may be recalled
that even in 1975, a Land Reforms Policy Paper brought out by the WB
had described land registration and titling as the main instruments for
increasing individual's tenure security, the main facilitators for the
establishment of flourishing land markets and the major tools to enable
the use of land as collateral for credit. However, the emphasis on these
issues then was much less. But today, these ingredients constitute the
mainstay of IFI-led land reforms across the world.

The Urban Scenario:

The reforms, so far, have primarily been agrarian with little
attention paid to the urban land structure. “Assuming an average
occupancy rate of 5 people per house, there are around 57 million
urban dwellings. Of these, around 85% are informal dwellings (built in
an extra-legal framework i.e. in violation of land laws; without proper
ownership documents; in violation of legal requirements, which usually
means that the dwelling is improperly valued). Assuming an average
urban dwelling size of 200 sq. ft, and putting a notional value of Rs.
180/sq. ft (it should be noted that both the dwelling size and the value
would be higher than what has been used here); we arrive at a figure
of Rs. 1,72,800 crores of informal assets in urban India.” (Source:
Infotech and creating resources, Krishna Rupanagunta, Indiatogether)

The need for reforms:

Proliferation of slums in the cities seems irreversible with
archaic laws governing urban land. The Rent Control Act is based on
the premise that since poor can’t afford high rents, rents should be
regulated. The implication of this, as seen in Mumbai is that as many
as 1.5 lakh houses are lying vacant despite the extreme scramble for
housing. This is chiefly because of the fear of the owners that they
would lose their property if rented. Therefore, it is expedient to open
the rental market to the market forces. The act also has restrictive
effects on land supply as buildings under rent control cannot be
repaired or redeveloped unless the tenants voluntarily move out. The
city of Mumbai is reeling under the limiting effects of the rent control
act, as many buildings are hardly renovated even if they utterly
dilapidated.

Urban Land Ceiling Act, 1976, provided for the imposition

of a ceiling limit on vacant land in urban agglomerations, acquisition of
such vacant land and to dispose of the vacant land to sub-serve the
common good, regulating the transfer of vacant land within the ceiling
limit, granting exemptions in respect of specific categories of vacant
land and for other procedural and miscellaneous matters. The Act was
being implemented in the urban agglomeration having population of
more than two lakhs as per the 1971 Census (64 urban
agglomerations). This resulted in creating artificial land shortage in
land starved urban areas. This translated into abnormally high land
prices, forcing households to consume lesser floor space than they
could’ve afforded without these archaic regulations. Thus, building
constructions and private housing projects were pushed away from
central urban areas to the peri-urban areas on the outskirts, which
have had negative externalities on water supply and sewage network,
public transport, unplanned development to name a few. Also, the act
vested powers of land development with the Governmental authorities
like the city housing and development authorities creating a monopoly
in the sector.
Exorbitantly high stamp duties encourage people to
under-value their land parcel. This effect cascades to reducing the
asset value of land while using as collateral.
Property tax is not ad valorem based on land value, but a
function of the rental value of building on it. This often leads to
increase in land speculation as people tend to buy land as an
investment rather than for the purpose of housing.
 Low FSI increases consumption of land as more people
need to be housed vis-à-vis land available. Low FSI amounts to more
land parcels being consumed forcing horizontal development than a
mix of both horizontal and vertical.
The restrictive regulations most often result in illegal
constructions, rendering the rights over the property weaker. This
often creates difficulty in obtaining formal financing over the piece of
property.

The land record management for urban areas is highly

ambiguous since there are no clear records especially after state
revenue departments handed over the responsibility to city
governments. The British need for land revenues created a fairly
strong land records system in rural areas; however, there was no such
process in urban areas, nor is there much historical knowledge of
urban land records management in India. Given the small size of land
holdings in urban areas, and the transaction frequency, the volume of
information to manage is enormous. This is impossible without a
technology-based solution, preferably linked to a GIS system.

The land administration system does provide a guaranteed

land title, which guarantees ownership; the sale deed and tax-paid
receipts are only documents of presumed title, and have been rejected
by the Supreme Court as not counting for legally valid documents of
ownership. This issue is similar across rural and urban India.

Therefore, three key areas of reforms that are exigent are:

1. Simplified registration process

2. Land records management
3. Guaranteed land titles

However, much needs to be debated on the scope of these reforms

between different stakeholders.

Tracing Urban Land Reforms: Five year plans –

The emphasis was given on institution building and on

construction of houses for Government employees and weaker
sections in the First Plan (1951-56). A sizeable part of the plan outlay
was spent for rehabilitation of the refugees from Pakistan and on
building the new city of Chandigarh. An Industrial Housing Scheme was
also initiated.
 The scope of housing programme for the poor was expanded in
the Second Plan (1956-61). Town & Country Planning Legislations were
enacted in many States and necessary organisations were also set up
for preparation of Master Plans for important towns.

The later plans started focusing on developing small and

medium towns in order to decongest the larger cities, with particular
emphasis on providing integrated services along with housing for the
economically weaker sections of the society.

Seventh plan (1985-90) was the first to give importance to the

private sector as a player in urban housing and development. National
Housing Bank was also set up during the period, to expand the base of
housing finance. A Centrally Sponsored Scheme on Computerization of
Land Records (CLR) was introduced with 100 percent financial
assistance from the Central Government for pilot projects in a few
selected districts during the period.

Eighth plan (1992-97) recognized the role and importance of

urban sector in the growth of the national economy. The plan identified
unabated growth of urban population aggravating the accumulated
backlog of housing shortages, resulting in proliferation of slums and
squatter settlement and decay of city environment.

Other than policies implementing land reforms as a part of five-

year plans and annual plans of the incumbent governments,
legislations have also been enacted to provide a structural framework
for such reforms. Progress has been made in making the Rent Control
acts less draconian by replacing the old acts with new ones in the
states of Maharashtra (Maharashtra Rent Control Act, 1999) and
Karnataka (Karnataka Rent Act, 1999). These aim at maintaining a
balance between the rights of the landlords and that of the tenants.

The Urban Land (Ceiling & Regulation) Act 1976 of has been
repealed by the Urban Land (Ceiling and Regulation) Repeal Act, 1999
passed by the Parliament. The Repeal Act has been notified on
23.3.99. The legislatures of the States of Punjab and Haryana have
already approved the repeal.

In December 2005, the Government of India launched a massive

urban renewal mission that mandates thirteen reform pre-conditions,
which includes reforms in rent control, overhauling property tax
systems, rationalizing stamp duties and effecting repeal of Urban Land
Ceiling and Regulation Act. On this optimistic note, it would not be
wrong to expect fast paced reforms in the system of urban land
administration as well, through simplifying property registration,
effective management of land records and providing guaranteed titles.