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Implications of India’s Land Policy:
Poverty of Land or Land of Poverty - An Empirical Study
Anjan Kumar Jena1
Suresh Kumar Sukumarapillai1
Abstract
India has been experiencing for quite a long time now inefficient land
markets that result in impediments to robust growth in agriculture on two
interrelated aspects: one, there is pervasive and unregulated monopolization of
rental value of land coupled with concealed tenancy; two, flow of investment into
this sector has suffered, especially due to gradual decline in average land holding
size over years. Apart from this, India’s agriculture is predominantly characterized
by marginal and small land holders including huge number of landless labours
eking out their meagre livelihood from work in this sector. As a result
consumption elasticity of income of farmer households has been close to one, thus
reaffirming that the saving potential that could have been ploughed back into the
sector to boost production and productivity has come to a standstill. This has been
substantiated with factual evidence culled out from various NSSO surveys, India.
Looking to the contribution of the sector to the overall economy as a whole, its
GDP in agriculture has witnessed a declining trend along with increasing the size
of its workforce. The distress in agriculture is more pronounced in mounting debt
burden on farmers, spate of suicides, falling income levels, and distress migration
of agricultural workers / cultivators to cope with survival crisis, despite the fact
that the conditions of work and wage in cities are not decent and often times
underpaid. This is the backdrop against which public land policy in the form of
Land Bill entitled ‘Right to Fair Compensation, Transparency in Land
Acquisition, Rehabilitation, and Resettlement (Amendment) Bill, 2015’ is being
contemplated and put through into an Act with a view to industrialization and
urbanization. This policy intends to resort to land acquisition so as to free the
surplus labour, including underemployed agricultural workers for gainful and
decent jobs in the upcoming industrial / manufacturing enterprises. One of the
bleak aspects of industrial performance in India has been its growth stagnating at
around 15 percent since 1990-91. The broad spectrum of agricultural statistics
revels that there is taking place shrinking labour force participation amongst
women due to males migrating to cities to work in the unorganized informal
sectors, and this can be juxtaposed with increasing feminization of Indian
agriculture. These two apparently contradicting processes go together and
reinforce further the precarity of living in rural India. This paper analyses all the
facets and dimensions and suggest measures leading towards sound public land
policy so that rural economy derives the benefits of growth and modern
technology side by side with modern amenities of life as well as generation of
employment opportunities for 15 million-strong workforce entering the labour
market everyyear.
#
Both authors belong to Indian Statistical Service and presently posted at Ministry of Finance, Government of
India, New Delhi. The ideas expressed in the paper are personal and do not have any bearing on the
organization to which they belong.
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1. Introduction
Land is a scarce resource in modern India with its economy growing on an average 6 to
7 percent since 1990-91. As a result, and in order to maintain the stability of growth in future
there will be multiplicity of demands on land. The area under agriculture including culturable
waste, grazing land and miscellaneous tree crops and groves constitutes 62.8 percent, with
common property resources fast losing to non-agricultural uses such as roads, urbanization,
and industrialization. Land policy that is currently on the anvil in the form of Land Bill
entitled ‘Right to Fair Compensation, Transparency in Land Acquisition, Rehabilitation, and
Resettlement (Amendment) Bill, 2015’ focuses on agricultural land for speeding up
industrialization and urbanization not only to generate employment but also to set up schools,
national highways, hospitals, ports, and industrial units for overall wellbeing of the people.
Here we have formulated the hypothesis whether land can be released for non-agricultural
uses without sacrificing food security and loss of production and productivity. Together with
this, we have articulated the idea that India’s agriculture despite maintain about 50 percent of
workforce, is in the present juncture not able to deliver on better standards of living for a
huge number of landless, marginal and small holders/workers. This has been amply
corroborated in the statistics thrown up in the different rounds of Sample Surveys conducted
by the National Sample Survey Office (NSSO), Government of India. We will discuss at
length in what follows that the urgency of land policy in the conditions of stagnating
industrial growth and pitiable standards of living in the rural sector cannot be ruled out.
Based on the various survey results of NSSO the synoptic view has been drawn out about the
conditions of farmers in terms of tenancy, debt burden, income levels, land fragmentation and
distress migration. We have also attempted to build up arguments that the strengthening the
process of liberal reforms in land market would promote investment in agriculture and create
space for overall development particularly income generating opportunities for incremental
rise in labour force every year. The entire paper is divided into 6 sections, followed by a
conclusion. The sections depict in turn different dimensions of agriculture over longer time
span, particularly to move towards the idea of urgency of land policy.
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2. Macro Performance of Agriculture
During the early 1950s, agricultural and allied sectors had a share of about 57 percent
of the country’s total Gross Domestic Product (GDP), and nearly 70 percent of workforce
was engaged in this sector (Table-1, Chart-1).
Table-1: Agriculture and Allied Sectors, GDP, and Employment (1952-53 to 2012-13)
Period
Agriculture and
Workforce in
Share of
Share of
Triennium
Allied Sectors,
Agriculture and
Agriculture in
Agricultural
ending (TE)
GDP at 2004-05
allied sectors
GDP
Workers to
prices
(Million)
(%)
Total Workers
(Rs. Million)
(%)
TE 1952-53
1,621,120
97
56.5
69.8
TE 1972-73
2,580,700
126
43.5
69.7
TE 1992-93
4,064,040
185
29.3
64.8
TE 2012-13
7,453,850
263
14.3
54.6
Source:(1) Government of India, Central Statistics Office, National Annual Accounts for
various years
(2) Government of India, Registrar General of India, Census Data for various years
Chart-1:
Percentage Share of Agriculture to GDP and Agricultural Workers to Total
Workers
Share of Agriculture to GDP and Agricultural
Workers to Total Workers
Share of Agriculture in GDP
69.8
Share of Agricultural Workers to Total Workers
69.7
64.8
56.5
54.6
43.5
29.3
14.3
TE 1952-53
TE 1972-73
TE 1992-93
TE 2012-13
For a first-hand view, the entire period (TE 1952-53 to TE 2012-13) is divided into
three major sub-periods, namely, TE 1952-53 to TE 1972-73, TE 1972-73 to TE 1992-93,
and TE 1992-93 to TE 2012-13. It is observed that despite momentum of growth in the
sector, particularly in the later two sub-periods, there has been a sharp fall in contribution to
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the overall GDP. This is mainly due to relatively sluggish growth in this sector relative to that
of the economy as a whole (Chart-2).
Chart-2: Growth of Agriculture & Allied Sectors and of Economy as a whole
(Percent per annum)
Agricultural & Allied Sectors and Overall
Economy
Agriculture & Allied Sectors
Overall Economy
6.9
4.6
3.6
2.2
1952-53 to 1972-73
2.8
1972-73 to 1992-93
3.1
1992-93 to 2012-13
Source: Government of India, Central Statistics Office, National Accounts Statistics for
various years.
While the share of agricultural and allied sector in GDP declined to 44 percent during
early 70s to 29 percent in early 90s, and finally to 14 percent in the recent period, the burden
of workforce has not proportionately come down. As can be gleaned from Table-1, the share
of agricultural workers has gone down slowly from 70 percent in early 50s to about 55
percent in the recent times. In contrast, in absolute terms the number of workers has rather
shown increasing trend from 97 million in early 50s to 263 million in 2012-13. It is not farfetched to hypothesize that this sector having gradually lost its income generating capacity to
other sectors (secondary and tertiary) of economy maintains huge numbers of workforce in
semi-starved and distressing conditions, without any viable alternative avenues of
employment in non-farm activities, particularly in industrial sector. We will discuss on this
later.
3. Unemployment Situation in Agriculture
To further substantiate what we have been maintaining so far in regard to
incommensurable absorption of workforce in agriculture, NSS 68th Round Survey, 2013,
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entitled ‘Key Indicators of Employment and Unemployment in India’, reveals that close to
half of workers are still in agriculture, with manifest tendency of its feminisation in terms of
women workforce. About 63 percent of female workers are per force thrown into it for
coping strategy of livelihood (Table-2). In contrast to this all India scenario, rural India holds
up a somewhat grim situation in view of looming agrarian distress in farmer’s suicides,
mounting debt burden, and episodes of morbidity, with 75 percent of female workers and 64
percent of workers being dependent on this sector notwithstanding the fact that income from
it has dwindled over the years, compared to overall economy (Table-1 &Table-2). It is a
phenomenon of low level equilibrium trap where millions of people eking out their existence
on agriculture lie waste without their having any skill-set to add to the growth of the
economy.
Table-2:
Percentage Distribution of Usual Status Workers of all Ages by Industry of
Work
Industry of Work
Category of Persons
Agriculture
Secondary
Tertiary
Male
59.4
22.0
18.7
Rural
Female
74.9
16.7
8.3
Person
64.1
20.4
15.5
Male
5.6
35.3
59.1
Urban
Female
10.9
34.0
55.1
Person
6.7
35.0
58.3
Rural
Male
43.6
25.9
30.5
+
Female
62.8
20.0
17.2
Urban
Person
48.9
24.3
26.8
Source: Government of India (2013), National Sample Survey Office, Key indicators of
Employment and Unemployment in India 2013.
Table-2 testifies to this fact and underlines percentage distribution of usual status
workers for rural and urban India separately and for the country as a whole by sectors of
activity.
Table-3: Sectoral Distribution of Employment
Years
Agriculture
Industry
Services
1999-00
59.9
11.9
23.7
2004-05
58.5
12.6
23.4
2009-10
53.2
11.8
25.4
2011-12
48.9
13.6
26.9
Source: Government of India, Reserve Bank of India.
Construction
4.5
5.5
9.6
10.6
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The changes in the composition of workforce in different sectors over years
demonstrate a shift away from agriculture and allied sectors mainly towards of construction
(Table-3). Add to this, employment elasticity in agriculture is the lowest among other sectors
(Table-4), and this re-asserts the fact that both land and agriculture (being a land based
activity) entail a new strategic approach in the changed conditions of global economy such
that agriculture turns more productive, among many other things, with the change of existing
land relations. Before we go into this in details, a few points are worth making to understand
the behaviour of land relations in composition, ownership, tenancy, etc., over longer time
span and likely land policy to be formulated to both de-congest the agriculture ridden as it is
with multiplicity of ills, with the impact of green revolution on production and productivity
having petered out. Second generation reforms are what is required. Since our focus is on
land policy, there is an urgent need to think through the question of efficiency in the use of
land and water without any loss of production and productivity. Indian economy, though
modern, is still predominantly agrarian in nature, with a huge concentration of small and
marginal holdings. They constitute about 85.4 percent of holdings (Table-8). Moreover, the
crowding of small and marginal land holdings in India’s agriculture is manifest in the fact
that marginal propensity to consumption is close to or more than 1, thus pitifully evidencing
the precarious living conditions of landless, marginal and small farmers. In what is said
above, this huge chunk of farmers/ agricultural workers languish in pitiable condition without
any non-farm opportunity of employment opening up to them. Landless agricultural workers,
marginal holders with their marginal consumption elasticity being greater than one, their
living conditions are worsening and to be supported with decent opportunities of earning
through workforce programmes.
Table-4: Sectoral Employment Elasticity
Sector
Elasticity
Agriculture
0.04
Manufacturing
0.09
Mining & Quarrying
0.52
Construction
1.13
Trade & Transport
0.19
Finance / Real Estate
0.66
Other Services
0.08
All Sectors
0.19
Source: Government of India, Reserve Bank of India Database
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4. Consumption and Expenditure Pattern
Table-5: Income and Consumption Expenditure of Agricultural Households (in Rs.)
Farm
Size
Class
Marginal
Propensity
to
consumption
2002-03
<0.01
0.01 –
0.40
0.41 –
1.00
1.01 –
2.00
2.01 –
4.00
4.01 –
10.00
10.00
+
All
Sizes
Source:
Marginal
Propensity
to
consumption
2012-13
Income
1380
1633
Consumption
2297
2390
Surplus
-917
-757
1.66
1.46
Income
4561
4152
Consumption
5108
5401
Surplus
-547
-1249
1.12
1.30
1809
2672
-863
1.48
5247
6020
-773
1.15
2493
3148
-655
1.26
7348
6457
891
0.88
3589
3685
-96
1.03
10730
7786
2944
0.73
5681
4626
1055
0.81
19637
10104
9533
0.51
9667
6418
3249
0.66
41388
14447
26941
0.35
2115
2770
-655
1.31
6426
6223
203
0.97
(1) Government of India (2005), National Sample Survey Office, ‘Income,
Expenditure and Productive Assets of farmer Households’
(2)Government of India (2014), National Sample Survey Office, ‘Key indicators
of Situation of Agricultural Households in India’
Table-6: Percentage-wise Distribution of Income from Different Sources by Land-size
Classes, 2012-13
Farm
Size
Income from
Class
Wages/salary Cultivation
Farming of Non-farming Total Income
animals
business
<0.01
63.64
0.66
25.90
9.80
100.00
0.01 – 0.40
57.45
16.54
14.95
11.05
100.00
0.41 – 1.00
38.33
40.88
11.99
8.81
100.00
1.01 – 2.00
23.52
57.28
11.13
8.07
100.00
2.01 – 4.00
15.44
68.58
10.82
5.16
100.00
4.01 – 10.00
10.34
77.63
7.64
4.38
100.00
10.00 +
3.17
86.22
6.34
4.28
100.00
All Sizes
32.22
47.94
11.87
7.97
100.00
Source: Government of India (2014), National Sample Survey Office, ‘Key indicators of
Situation of Agricultural Households in India’
A glimpse of Table-5 plays out the average monthly income and consumption
expenditure per farmer household by farm size class. During the period 2002-03 to 2012-13,
the overall propensity to consume has hardly improved, with propensity to consume being
0.97 ≅ 1 for all farm size classes during 2012-13. One can imagine the extent of poverty and
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deprivation of the majority of community engaged in agriculture either in cultivation or
agricultural labour. Going by the source of income of the farming households, given in Table6, one stumbles upon the evidence that wage/salary is a dominant means of survival in rural
India for small and marginal farmers apart from cultivation and other non-farming activities
like livestock, and non-farming business.
5. Operational Holdings and Area Operated
Irrespective of debate on whether land question has to be a subject of policy debate in
regard to striking a balance between lifting the surplus masses in agriculture from poverty
and destitution and shifting the land to non-agricultural purpose without sacrificing food
security, the answer has to be emphatic “yes”. The backdrop of this “land question” in Indian
agriculture at this juncture has to be linked to the question of capital formation in this sector.
There is no denying the fact that the presence of burden of rent on tenant-peasants acts as a
barrier to capital investment. The agrarian relations in India are of such a nature that the
landowners whether small or big does not want to create tenancy rights and even tenants do
not reveal the facts to official investigators. This is due to the fact that the land owners would
evict them if they have the slightest hints of it. Studies of independent scholars throw up
incidence of hidden tenancy 2 to 4 times the rate reflected in official sample survey findings
in states of Bihar, Odisha, and Andhra Pradesh. A major concern for the farmers in regard to
their earnings / income has to be to sustained higher level of production and productivity per
hectare by policy efforts at breaking down institutional barrier of concealed tenancy and
opening up land lease market and thus promoting capital investment in this sector by means
of infrastructural facilities. As regards structural bottlenecks in capital mobilization in this
sector, this seems a far cry for a productive and remunerative agriculture in the increasing
pace with which land is fragmenting. Table-7 features the estimates of certain key
characteristics of operational holdings in rural India from NSSO land holding surveys during
1960-61 to 2012-13. As can be seen in Table-7, average area operated per holding has
witnessed sharp fall from 2.63 hectare in 1960-61 to 0.91 in 2012-13 showing thereby that
operated area has declined as much as number of holdings has increased over this period. Our
hypothesis or thesis is here that the productivity in the sector appears to be correlated with the
upscaling of operational holding size given the fragmentation of land due to population
pressure. Operational area has plummeted to 94.48 million hectare in 2012-13 from 133.48
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million hectare in 1960-61, and during the same period the number of operational holdings
has gone up from 50.77 million to 108.78 million.
Over and above this, the poorly managed property rights deprive marginal and small
holders of their access to credit and insurance markets. Property rights of the country are not
clear cut and more so in a chaotic mess leading to dispute over rights, despite the progressive
attempts at computerization of land records system. However, in many states, the
computerization/ digitization of land records is underway with the introduction of land passbook, etc. The fragmentation of land seen against six land size classes leads us to conclude
that not only holdings are marginalized but also farmers along with this. 88.50 percent
holdings (marginal and small) share 51.15 percent of the operated area and 11.50 percent
holdings share 48.85 percent of operated area during 2012-13. Compared to the year 1960-61,
the year 2012-13 brings out both aspects of marginalization – marginalization of holdings and
farmers.
Table-7: Estimates of Certain Key Characteristics of Operational Holdings in Rural
India from Land Holding Surveys of NSS: 1960-61 to 2012-13
Item
1960-61 1970-71 1980-81 1991-92 2002-03 2012-13
(17th )
(26th )
(37th )
(48th )
(59th )
(70th )
1.No. of
50.77
57.07
71.04
93.45
101.27
108.78
operational
holdings (Million)
1.1.Percentage
12.4
24.5
31.5
8.4
7.4
increase (%)
2.Area operated
133.48
125.68 118.57
125.10
107.65
94.48
(Million ha.)
3.Average area
2.63
2.20
1.67
1.34
1.06
0.91
operated (ha.)
4.Percentage of
4.22
0.60
0.62
0.08
0.40
3
joint holdings
5.number of
5.7
n.a.
4.0
2.7
2.3
2.0
parcels per holding
6.Percentage of operational holdings with partly or wholly
(a)owned land
94.86
95.64
92.91
96.15
95.33
97.29
(b)leased-in land
23.52
24.68
15.20
10.99
9.90
13.69
7.In area operated, p.c. share of
(a)area owned
89.30
89.43
91.08
90.44
92.70
87.75
(b)area leased in
10.70
10.57
7.18
8.52
6.50
11.30
(c)area otherwise
--1.74
1.04
0.80
0.95
possessed
Source: Government of India, National Sample Survey Organization, ‘Household Ownership
and Operational Holdings in India’, various issues
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This can be read off Table-8 and Table-9. In such a growing precarity, the launch of
Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) in 2005 made it
possible for agricultural households to supplement their dwindling income levels. “Situation
Assessment Survey of Agricultural Households”, NSSO, 2014 marshals the fact that about 44
percent of agricultural households had MNREGA job cards.
Table-8: Changes in the Percentage Distribution of Operational Holdings by Category
of Holdings
India – Rural
Category
Percentage distribution of operational holdings
of holdings
1960-61
1970-71
1980-81
1991-92
2002-03
2012-13
th
th
th
th
th
(17 )
(26 )
(37 )
(48 )
(59 )
(70th )
Landless
0.03
Marginal
39.10
45.80
56.00
62.80
69.90
73.17
Small
22.60
22.40
19.30
17.80
16.05
15.30
Semi19.80
17.70
14.20
12.00
8.95
8.10
medium
Medium
14.00
11.10
8.60
6.10
4.3
3.04
Large
4.50
3.10
1.90
1.30
0.8
0.37
All Sizes
100.00
100.00
100.00
100.00
100.00
100.00
Source:
(1) Government of India (2006), National Sample Survey Office, ‘Some aspects
of Operational Land Holdings in India, 2002-03’
(2) Government of India (2015), National Sample Survey Office, ‘Household
Ownership and Operational Holdings in India’
Table-9:
Changes in Percentage Distribution of Operated Area by Category of
Operational Holdings
India-Rural
Category
1960-61
1970-71
1980-81
1991-92
2002-03
2012-13
th
th
th
th
th
of holdings
(17 )
(26 )
(37 )
(48 )
(59 )
(70th )
Marginal
6.90
9.20
11.50
15.60
22.20
27.71
Small
12.30
14.80
16.60
18.70
20.60
23.44
Semi20.70
22.60
23.60
24.10
22.40
23.50
medium
Medium
31.10
30.50
30.20
26.40
22.65
19.33
Large
29.00
23.00
18.20
15.20
12.15
6.02
All Sizes
100.00
100.00
100.00
100.00
100.00
100.00
Source:
(1) Government of India (2006), National Sample Survey Office, ‘Some aspects
of Operational Land Holdings in India, 2002-03’
(2) Government of India (2015), National Sample Survey Office, ‘Household
Ownership and Operational Holdings in India’
There is ample factual evidence that the livelihood strategy for millions of people
dependant on land based activity especially in rural areas is multi-locational more than it is
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assumed. These people make an influx into towns, cities and industrial centres where they
seek jobs in the expanding informal sector and construction. While these jobs may be found
underpaid and insecure, they are considered attractive given the difficulty of survival in
agriculture. Push factors such as droughts, seasonal agricultural activity are a match with
pulls of comparatively higher urban wages and opportunities of job during out-of-agricultural
season. Economic history bears witness to the experience that with the growth of industrial
and manufacturing sectors, the surplus agricultural labourers/ marginal holders languishing in
livelihood crisis tend to shift to these sectors. And this creates conditions for making
agriculture productive with technological inputs and resource mobilization. India, despite
planned development over several plan periods, still reels under the spell of stagnating
growth in its industrial sector since 1990s.
Chart-4:
Percentage Distribution of Operational Holdings and Area Operated by
Size-classes
Percentage Distribution of Operational
Holdings and Operated Area
Semi-Medium, Medium & Large
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
38.3
76.1
80.8
61.7
19.2
Op. Opd
Hldg Area
1960-61
24
Op. Opd
Hldg Area
1970-71
28.1
34.3
Op. Opd
Hldg Area
Op. Opd
Hldg Area
1980-81
88.5
85.95
80.6
75.3
68.2
1991-92
48.85
57.2
65.7
72
11.5
14.05
19.4
24.7
31.9
Marginal & small
42.8
Op. Opd
Hldg Area
2002-03
51.15
Op. Opd
Hldg Area
2012-13
Source: As in Table-8 and Table-9
It is worth reiterating that agriculture accounts for about 13.9 percent of GDP in 201314, and share of manufacturing has stagnated around 15 percent. Majority of farm labourers
are either wage workers or share croppers, with abysmally low earnings. The crucial question
is how to create new jobs for the upcoming educated youths. Discernible trends are that
increasing migration to near and far cities and urban centres for informal jobs has become the
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order of the day. 55th Round Survey of NSSO on ‘Migration in India’ estimates 245 million
people as migrants, constituting 27 percent of the total population. Rural to rural migration
accounts for 62 percent of the total internal migrants. Rural-urban migration is estimated at
19 percent and this to considerable degree is the recurring migration stream.
6. Debt Burden
Table-10: Estimated Number of Indebted Farmer Households
NSSO Survey Rounds
Percentage
of
farmer Average
amount
of
households indebted
outstanding loan (Rs.)
59th Round (2003)
48.6
12,585
th
70 Round (2013)
51.9
47,000
Source: Government of India, ‘Key Indicators of Situation of Agricultural Households in
India’ (NSSO 70th Round) & ‘Indebtedness of Farmer Households’, (NSSO 59th Round).
As far as agricultural economy is concerned, the extension of credit to farmers,
particularly small and marginal farmers is as much a critical concern for productivity-raising
investment as their burgeoning indebtedness. Can we say with a little stretch of imagination
that the farmers have fallen into the debt trap with no hope of redemption. On the one hand,
institutional and non-institutional credit has expanded over years to this sector, and on the
other more and more farmers are stuck in the quagmire of debt. A series of shocks – both
natural and market-induced – affect the small-holders’ agriculture. Apart from drought, and
flood if prices crash in the market, and public policy support of Minimum Support Prices
(MSP) at which the Government of India is under obligation to procure from the farmers, is
not forthcoming in time, they are left with no other choice than being forced to sell their
produce at whatever distress price ruling in the market post-harvest. With no capacity for
storage to hold their stocks and releasing them in future when prices may be higher enough
for better margins/returns, they immediately make distress sale to meet expenses of health
and education of family members, their marriage ceremony, and day-to-day expenditure. As a
result, debt stays with them like a ghost haunting them not only throughout their lives but
across generations. India’s agriculture with its concentration of workforce in a greater
magnitude not only produces food for consumption for humans and animals and raw
materials / inputs for industrial production, but also interest incomes for money lenders, input
dealers in fertilizers, seed, pesticides, etc., unregulated lending business in rural India and
more so for banks. Apart from this, it also produces rental income in cash and/or in kind by
virtue of ownership title in land.
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According to NSSO 59th Round, 48.6 percent farmer households were estimated to be
indebted. The incidence of indebtedness was highest in Andhra Pradesh (82.0%), followed by
Tamil Nadu (74.5%), Punjab (65.4%). The average amount of loan outstanding per
agricultural households was Rs.12,585 in 2002-03 and it increased to Rs.47,000 in 2012-13.
The weakest link in India’s growth story has been, as said earlier, the poor
performance of manufacturing unlike in South Korea, Taiwan, Singapore, and China. In these
countries, there has been seen a massive exodus of agricultural workforce from rural
hinterland for gainful absorption in manufacturing. India is poised for such a selftransformation with the right mix of land policy on the anvil and enhanced productivity in
agriculture and growth potential in industrial sector. Improved infrastructure including roads,
ports, electricity, hospitals, schools, cold chains, and modernized marketing yards are crucial
to both agricultural and industrial growth through forward and backward linkages.
Recent Survey of NSSO, ‘Key Indicators of Employment and Unemployment in
India, 2013’ vouchsafe that there has been an incremental addition of about 14 million
workforce between 2010 and 2012. Also an increase of about 15 million of labour force has
been estimated over the same period. Mounting labour and workforce in the country
necessitates some sort of revolution in manufacturing through a scientifically designed policy
packages including focus on land acquisition, infrastructure, labour market flexibility, skill
formation, and liberalized land lease market in order that surfeit working population in
agriculture including growing number of educated youths will have the chance of absorption.
This survey poses other disturbing phenomenon of declining labour force participation rate
among women. Apart from many other reasons, the most important is that the households of
migrant farmers / labourers from which males have migrated to look for jobs in cities are the
ones in which women have withdrawn from participation under duress to take care of their
families.
7. Towards Land Policy
Now coming to the problematic issue of land policy in regard to its implications for
food self-sufficiency, production and productivity, employment, and poverty, we have argued
so far based on factual and theoretical evidence that structural shift in what is crucial. There
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is argument being vociferated that land acquisition broadly for industrialization and hence
attendant to it, employment generation would be damaging for the self-sufficiency of food
production, we may draw upon the statistics of per capita net availability of food grains over
years, especially since 1991 – the year of beginning of liberalization of India’s economy. This
suggests that per capita net availability of food grains, since 1991 has remained more or less
stable at 186 kgs per year, with food grains stock in the Central pool having increased from
19.13 million tonnes in 1991 to 66.69 million tonnes in 2013. Problem lies in the massive
leakages in the Public Distribution System (PDS), with 40 percent or more food grains
released by Central pool of the country fail to reach actual beneficiaries. Recently India
passed Food Security Act, 2013 that promises provision of rice, wheat, millets, etc., at highly
subsidised prices to 75 percent of the rural and 50 percent of the urban population.
Provision of food grains for the population focuses only on carbohydrates, with
protein intake missing in the Food Security Act, 2013. To counteract the protein deficiency
among large sectors of people in their diet, India has to embark further on expanding the
wheat revolution, livestock production, especially in rural India, underpinned by boosting
purchasing power of people. The public policy in place considers experimenting with direct
cash transfers with instrumentalities of bank transfers, postal money orders, and mobile
phone technology. This would in turn empower people to choose whether they want cash or
subsidised food from ration shops under PDS. In India, MNREGA has been extended to the
whole of rural India. This flagship scheme has given a boost to earnings of the rural poor
despite some fault lines in the structure and implementability of this scheme, one of the fault
lines being the failure of objective of creating public assets. This scheme has to be dovetailed
to building houses and toilets for the rural poor.
Inefficient land markets are it goes without saying, a major obstacle to economic
growth. In other words there are distortions in the land lease market in that the landed class
has monopolised the rural land market. This is one of the dominant factors standing in the
way of higher productivity and capital mobilization in this sector. What is needed in policy
space to strengthen liberalization of land lease markets.This would facilitate both the lesser
and lessee to freely negotiate on terms of lease contract and would go a long way towards
consolidation of land holdings. If this process kicks in, it would be conducive for
productivity-enhancing investments in land. In this context, Right to Fair Competition and
Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015
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already framed is likely to address some of the concern areas of 2013 Act enacted in Indian
Parliament. The Amendment Bill could not be legislated due to stiff opposition to it. The
proposed Land Bill would accelerate the monetization of land in reference to balanced use of
land across various uses.
8. Conclusion
India is faced with the double-bind situation of sluggish employment growth
proportionate to the rise of labour force and of agrarian distress spiralling out of control.
There is imminent urgency to improve sectors such as infrastructure and to enhance the ease
of doing business in India. For this one of the unimpeachable requirements is land and its
acquisition in a regulated manner through legal/policy intervention so that production and
productivity is not compromised and without sacrifice of self-sufficiency in production and
biodiversity. We have already affirmed that the fear of loss of self-sufficiency in food
production is misplaced. Broadly what impoverishes the people engaged in agriculture is the
lack of their income generating capacity, and this can be addressed by generating
employment for them by expansion of agro-based industries, and other non-farm sectors.
Land acquisition for industrialization and urbanization in view of employment potential
growth in a sine-qua-non for giving a go ahead to equitable development process. India’s new
Land Bill aims, among many other things, at creating an enabling framework to deal fairly
with the displaced and dispossessed in the process of land acquisition. Irrespective of any
Land Policy, the incidence of marginalization of land holdings and farmers is on the rise as
said earlier, resulting from gradually diminishing income from farm activity. Rural-rural and
rural-urban migration seems to corroborate this. The enactment of Land Policy is of urgent
necessity on two counts: one is marginalization of farming in falling average land size and
increasing numbers of farmers being marginalized, second is the challenge of employment
generation for surplus population in agriculture.
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