ICFAI UNIVERSITY

DEHRADUN

INDIN ECONOMY
WEEKLY
ASSIGNMENT-I

TOPIC- REFORMS IN THE AGRICULTURE AND ITS IMPACT IN THE

INDIAN EONOMY

ENROLLMENT ID- 18FLICDDN02175

SUBMITTED TO SUBMITTED BY

FACULTY OF ECONOMICS TWINKLE RAJPAL

ASSISTANT PROFESSOR BALLB(Hons.)-II YEAR

MR. NEERAJ ASWAL SECTION-C

BATCH 2018-2023
 REFORMS IN THE AGRICULTURE AND ITS IMPACT IN THE INDIAN EONOMY

Agriculture at the Time of Independence

At the time of Independence, India inherited a semi-feudal agrarian structure with onerous tenure
arrangements.

The ownership and control of land was highly concentrated in a few landlords and
intermediaries.

Thus, the agricultural land resource of India was gradually impoverished because economic
motivation tended towards exploitation rather than investment

Reforms after independence with there effects in the economy.

ABOLITION OF INTERMEDIARIES

Intermediaries like Zamindars, Talukdars, Jagirs and Inams had dominated the agricultural sector
in India by the time the country attained independence.

Soon after independence, measures for the abolition of the camden system were adopted in
different states. The first Act to abolish intermediaries was passed in Madras in 1948.

As a result of the abolition of intermediaries, about 2 crore tenants are estimated to have come
into direct contact with the State making them owners of land.

The abolition of intermediaries has led to the end of a parasite class.More lands have been
brought to government possession for distribution to landless farmers.

SECURITY OF TENURE

To protect tenants from eviction and to grant them permanent rights on lands, laws have been
enacted in most of the states. They have three essential features.

(a) Tenants cannot be evicted without any reason. They can be evicted only in accordance with
the laws.

(b) Land can be resumed by the landlord only on the ground of personal cultivation. But the
landlord can resume the land only up to a maximum limit.

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(c) The landlord should leave some area to the tenant for his own cultivation. The tenant in no
case should be made landless.

REGULATION OF RENT

In Pre-Independent India rents were high for obvious reasons. Fifty per cent of the total produce
was paid as rent.

In addition to such high rent, the tenant had to provide certain free services to landlords.

So at the beginning of the First Plan, the Central Government insisted on the regulation of high
rent by State Governments.

It was laid down that the rent to be paid to the landlord should not be more than 20 to 25 per
cent. The main objective of such Acts was to make the rent fair and reasonable.

RIGHT OF OWNERSHIP

So far as right of ownership is concerned, tenants have been declared as the owners of the land
they cultivate.

They have to pay compensation to the owners. The amount of compensation should not exceed
the level of fair rent.

As a result of these measures about 40 lakh tenants have already acquired ownership rights over
37 lakh hectares of land. They have become better-off economically and socially.

CONSOLIDATION OF HOLDINGS

Consolidation of Holdings means bringing together the various small plots of Land of a farmer
scattered all over the village as one compact block, either through purchase or exchange or with
others.

In Orissa, the Consolidation Act was passed in 1972.The work of consolidation has been
completed fully in Punjab and Haryana. So far, about one third of the total cultivated land has
been consolidated.

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There are various obstacles to the speedy implementation of the consolidation programme. There
are response from cultivators, wide variation in the quality, complicated process of land
consolidation, lack of enforcing machinery, lack of political will, etc.

IMPACT OF LAND REFORMS

The general assessment on land reforms in the Indian context is rather negative. For example, the
report of the Task Force on Agrarian Relations of the Planning Commission of India (1973) had
the following overall assessment of land reforms in India: The programmes of land reform
adopted since Independence have failed to bring about the required changes in the agrarian
structure.

Abolition of intermediaries is generally agreed to be one component of land reforms that has
been relatively successful. The record in terms of the other components is mixed and varies at
states and over time.

Landowners resisted the implementation of these reforms by directly using their political elout
and also by using various methods of evasion and coercion, which included registering their own
land under names of different relatives to bypass the ceiling, shuffling tenants around different
plots of land so that they would not acquire incumbency rights as stipulated in the tenancy law.

OVERALL OBSERVATIONS:

Pro-Women Policy - All new homestead land distribution to landless families should be only in
women's name rather than joint titles with husbands. Distribution of land under all land
distribution programmes should exclusively be to rural landless women workers. Awareness
programs to educate women about land laws and land rights may be conducted.

Administrative reforms and improvements in institutional processes:The Policy

encompasses a very large set of pro-active administrative, legal and quasi-legal actions to ensure
the rights to land of all socially and economically marginalized communities including SCs. STs.
Women, Nomads and the like. Additionally, the policy proposes a number of administrative
reforms and improvement in institutional processes to make it more efficient, transparent and
accountable.

Tenancy - Restrictions on land leasing within ceiling limits should be removed to help
improving poor people's access to land through lease market and also for improved utilization of
available land, labour and capital. Encouragement to the women for group leasing, as far as
possible. The rent should operate as per the lease market. The State should not fix the lease rent.

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Shortcomings in the policy:

More focused towards rural land reforms: The 'Draft National Land Reforms Policy seems to
be skewed more on rural land reforms. Urban land issues are equally complex though the size
might be smaller. Hence the draft would do well to have urban related issues addressed as well.

Exemption of North Eastern region: The Policy has exempted the states of North-Eastern India
and does not seem to be adequately clarifying the reasons for the same

Coverage of Backward Classes in the policy: There has been little mention of the other
backward classes (OBCS), Salt farmers (in Gujarat's context).

Interconnections between demand for agriculture and non-agriculture purposes: The

proposed policy needs to address the interconnections of surging demand of land for agricultural
purpose and demand of more land for non agricultural purpose and to strike a balance through
land reforms policy.

COMPREHENSIVE CROP INSURANCE SCHEME (CCIS)

CCIS was introduced with effect from 1st April 1985 by the Government of India with the active
participation of State Governments. The Scheme was linked to short term crop credit and
implemented on homogeneous area basis.

The main features of the scheme were:

1) It covered farmers availing crop loans from financial institutions for growing food crops and
oilseeds on compulsory basis. The coverage was restricted to 100 per cent of crop loan subject to
a maximum of Rs.10 thousand per farmer.

2) Small and marginal farmers were given a subsidy of 50 per cent of the premium payable
shared equally by the central and state governments.

3) The central and state governments shared the premium and claims in the ratio of 2:1.

4) The scheme was a multi-agency effort, involving Government of India State Governments,
Banking Institutions and General Insurance Corporation of India.

The scheme was, however, scrapped in 1997 because of huge losses to the Government.

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MICRO IRRIGATION

Though India has the largest irrigated area in the world the of irrigation is only about 40 percent
of the gross cropped as of today. One of the main reasons for the low coverage of irrigation is the
predominant use of flood(conventional) method of irrigation.

KISAN CREDIT CARD

Kisan Credit Card (KCC) scheme introduced in 1998-99 was a step towards facilitating the
access to Short Tem (ST) credit for the borrowers from the financial institutions. The scheme
was conceived as a unique credit delivery mechanism, which aimed at provision of adequate and
timely supply of ST credit to the farmers to meet their crop production requirements.

Under the earlier system, disbursal of short-term credit to agriculture was mostly through
demand loans and cash credit, the facilities were, however, given for the period of one year or
less, which necessitated execution of fresh documents each season.

SOME OF THE ADVANTAGES ARE AS UNDER:

i. The card can be used like an ordinary credit card, thus giving a feeling to the
farmers that there is an underlying guarantee of getting loan from the bank as long
as the earlier loan is repaid.

ii. The facility is given for three to five years instead of one year, thus reducing the
procedural delays.

iii. There is flexibility in operation of the facility in terms of number of

withdrawals and in repayment of loan.

iv. The system on its own allows the borrowers to get their loans rescheduled in
case of natural calamities, etc