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The second phase of land reforms can be traced in the process of economic reforms. Economic reforms exposed the economy to the new and emerging realities, such as, land acquisition and leasing, food-related issues and the agricultural provisions of the World Trade Organization (WTO). We see a shift (Economic Survey
2012–13) in the thinking of the Government of India towards the issue of land reforms—a clear three step policy looks emerging:
(i) Mapping land carefully and assigning conclusive title,
(ii) Devising a fair but speedy process of land acquisition, and
(iii) Putting in place a transparent and effective land leasing policy.
Land is probably the single most valuable asset in the country today. Not only could greater liquidity for land allow more resources to be redeployed efficiently in agriculture, it could ease the way for land-utilising businesses to set up. Perhaps, as important, it could allow land to serve as collateral for credit.
The National Land Records Modernisation Programme (NLRMP), started in 2008, aims at updating and digitising land records by the end of the Twelfth Plan. Eventually, the intent is to move from presumptive title (where registration of a title does not imply the owner’s title is legally valid) to conclusive title (where it does). Important points related to this process may be summarised as follows:
(i) Digitisation will help enormously in lowering the costs of land transactions, while conclusive title will eliminate legal uncertainty and the need to use the government as an intermediary for acquiring land so
as to ‘cleanse’ title.
(ii) Given the importance of this programme, its rollout in various states needs to be accelerated—easier and quicker land transactions will especially help small and medium enterprises that do not have the legal support or the management capacity that large enterprises have.
(iii) Prohibitory land leasing norms raises the cost to rural-urban migration, as villagers are unable to lease their land, and often have to leave the land untilled or leave a family member behind to work on the land. Lifting these restrictions can help the landless (or more efficient landowners) get land from those who migrate, even
while it will allow landowners with education and skills to move to industry or services.
(iv) Compulsory registration of leaseholds and of the owner’s title would provide tenants and landowners protection. For such a leasing market to take off, owners should be confident that long-term tenancy would not lead to their losing ownership. With a vibrant leasing market, and clear title, there should be little reason for not strengthening ownership rights.
(v) For large projects with a public purpose, such as the National Industrial and Manufacturing Zones, which will facilitate the setting up of small and medium enterprises, large-scale land acquisition may be necessary.
(vi) Given that the people currently living on the identified land will suffer significant costs including the loss of property and livelihoods, a balance has to be drawn between the need for economic growth and the costs imposed on the displaced.
Moving onwards, the Government of India passed the Land Acquisition Bill, 2013. The bill, besides proposing to amend the Land Acquisition, Rehabilitation and Resettlement Act, 2011 proposed to put in place a transparent, effective and speedy laws reagrding the need of land reforms related to leasing and acquisition. By 2015, the new government at the Centre proposed a new land bill (Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2015), which aimed at removing the inadequacies of the Land Act of 2013. The Bill is being opposed by the political parties belonging to the opposition (it is still to be passed by the Parliament, though the government has done around ten
amendments to it). The country cannot afford to compromise the economic security of land owners (farmers) in the process of evolving a speedier process of land acquisition—the law dealing with it should be transparent, justified, effective and speedier, too.
Finer points of this PHASE can be summed up in the following way:17
(i) Leasing seems a better choice in face of farmer’s opposition seen in recent times in different states toward attempts at land acquisition. Again, if the country needs to attract investment from the organised private sector (domestic or foreign) land leasing seems a better option than land acquisition.
(ii) Corporate farming has not taken place in the country in a big scale, especially in the areas of foodgrains production, which India needs to ensure food security and compete in the global grain market, in particular, and the agri-market in general. This has become even more important in the wake of the Right to Food given to a large segment of the population.
(iii) Giving primacy to ‘leasing’ will solve several problems:
(a) It will keep land ownership in the hands of the existing farmers;
(b) It will prevent mass landlessness and unemployment among the farmers;
(c) Farmers will get a permanent source of income (in the meantime, they might be imparted skills and provide better employment in industries); and
(d) It will make land easily available for use of public and private purposes.
Meanwhile, the Model Land Leasing Law proposed by the NITI Aayog in 2016 is giving encouraging results in the states.
(iv) In the wake of the process of globalisation, if the country intends to bring in benefits to agriculture sector it needs to enhance its agriculture production to surplus levels—and for this India needs to garner in the investment potential of the private sector. This cannot happen till the country is able to bring out effective land leasing and acquisition policies.
(v) The recent emphasis on the promotion of the ‘manufacturing sector’ and ‘smart cities’ are hugely dependent on smoother and speedier process of land acquisition. Without expanding the industrial sector to its optimum levels, the agriculture sector can emerge a remunerative profession—the country needs to migrate the extra labour force of the agriculture sector to industry, smoothly.
(vi) The issue of land acquisition is to establish a logical equation with ‘environmental issue’, in order to make the process of development sustainable (NITI Aayog gives a right call for it).
It should be noted that while the Government of India has changed its orientation towards the issue of land reforms, the states in India are still trying to accelerate and continue the process of land reforms of PHASE I (but due to enough resistance from the land-owning section in the country, the process does not seem happening, politically).
The average size of land holding in India is continuously decreasing due to rapid and high population growth. The continuous division and fragmentation of holdings has increased the number of holdings, obviously of smaller size. As per the latest (9th) Agriculture Census 2010–11 :
(i) The total number of operational holdings in the country has increased from
129 million in 2005–06 to 138 million 2010–11 (an increase of 6.61 per cent).
(ii) There is a marginal increase in the operated area from 158.32 million hectare (ha) in 2005–06 to 159.18 million ha in 2010-11 (an increase of
0.54 per cent). The operated area has primarily increased because the State of Jharkhand participated for the first time in the Agriculture Census 2010–11 (since the state came into being in the year 2000).
(iii) The average size of operational holding has declined to 1.16 ha in 2010–11 as compared to 1.23 in 2005–06.
(iv) The percentage share of female operational holders has increased from
11.70 in 2005–06 to 12.79 in 2010–11, with the corresponding operated
area of 9.33 and 10.36.
(v) The small and marginal holdings taken together (below 2.00 ha) constitute 84.97 per cent in 2010–11, as against 83.29 in 2005–06, with a share of 44.31 per cent in the operated area in the current Census, as against the corresponding figure of 41.14 per cent in 2005–06.
(vi) The large holdings (10.00 ha & above) were 0.73 per cent of the total number of holdings in 2010–11 with a share of 10.92 per cent in the total operated area, as against 0.85 per cent and 11.82 per cent respectively for 2005–06 Census.
(vii) Share of different social groups in operational holdings stands as:
12.40 per cent for SCs , 8.71 per cent for STs , 0.18 per cent for institutional and 78.72 per cent for others.
(viii) In a total of 137.76 million operational holdings in the country, the highest number belonged to Uttar Pradesh (22.93 million) followed by Bihar (16.19 million) and Maharashtra (13.70 million).
(ix) Out of a total of 159.18 million hectares of the operated area in the country, the highest contribution was made by Rajasthan (21.14 million ha) followed by Maharashtra (19.84 million ha) and Uttar Pradesh (17.09 million ha).
Agricultural holdings have been classified into three categories: