Institutional Factors Affecting Agriculture in India (2023)


The term ‘institutional factors’ refers to the particular system under which land is owned and managed.

The ownership and management have a direct bearing on agricultural productivity and efficiency. The government has given emphasis on institutional advancement through land reforms, besides technological advancement.

A land reforms package broadly involves the following components:


(i) Abolition of intermediaries,

(ii) Tenancy reforms (i.e., providing security of tenure),

(iii) Ceiling and redistribution,

(iv) Consolidation, and


(v) Updating of land records.

Abolition of Intermediaries:

Even during the struggle for independence, it was widely recognised that the stagnation in the Indian agricultural sector was primarily due to exploitative agrarian relations. Zamindars were the chief instrument of exploitation. Hence, abolition of zamindari system, along with other intermediary tenure systems, became the topmost priority of land reforms immediately after independence.

The abolition of intermediaries started in 1948 with the enactment of legislation in Madras. In some other states, the legislations for abolition of intermediaries were passed before 1951. West Bengal, the state worst affected by the ravages of absentee landlordism, adopted the legislation in 1954-55. In this way, most of the states had passed the Acts related to abolition of intermediaries by the end of the First Plan.

Tenancy Reforms:

Tenants can be classified into (i) occupancy tenants, (ii) tenants-at-will, and (iii) sub-tenants. The rights of tenancy of the occupancy tenants are permanent and heritable. Hence, the occupancy tenants do not face the fear of eviction so long as they pay rent on time. But the position of tenants-at-will and sub-tenants is very precarious, since such tenants depend on the mercy of landlords. Hence, special laws have had to be enacted and implemented to protect these people. These laws relate to (i) regulation of rent, (ii) security of tenure, and (iii) conferment of ownership rights on tenants.

Regulation of Rent:

The First and the Second Plans recommended that rents should not exceed one-fourth or one-fifth of the gross produce. Various states have passed necessary legislation in this regard, but there are large variations in the rates of rents fixed in different states.

Security of Tenure:

Legislations have been passed in most of the states to protect tenants from ejectment and grant them permanent rights in land. The purpose of these legislations is to ensure that (i) ejectments are lawful, (ii) land assumed by an owner is only for personal cultivation, and (iii) the tenant is assured of a prescribed minimum area in case of resumption.

In all tenancy laws, persons cultivating the lands of others on payment of rent are treated as tenants. However, in some states such as Uttar Pradesh and West Bengal, sharecroppers—who pay rent by division of produce—are not regarded as tenants. So tenancy laws are not applicable in their case.

Conferment of Ownership Rights on Tenants:

Legislative provisions have been made in many states for conferment of ownership rights on tenants. Some of the states have acquired ownership of land from landowners and transferred it to tenants. Sub-tenancies have generally been prohibited except in certain cases such as widows, members of armed forces, minors, unmarried women, persons suffering from disabilities, etc.

Reorganisation of Agriculture:

Reorganisation of agriculture includes (i) ceiling on agricultural holdings, (ii) consolidation of holdings, and (iii) cooperative farming.

Ceilings on Agricultural Holdings:


The basic aim of the ceiling laws is to accomplish the elimination of excessive ownership of land.

Under the old ceiling laws (till 1972), only about 23 lakh acres were declared surplus in India, out of which only about 13 lakh acres were redistributed. Further, different states had adopted different policies regarding land ceiling. To bring uniformity in land ceiling policies, a conference of chief ministers was held in 1972. A new land ceiling policy was evolved in this conference.

The main features of the new policy were as follows:


(i) Lowering of ceilings to 18 acres of irrigated land and 54 acres of unirrigated land,

(ii) Making family and not the individual as the unit” for determining land holding,

(iii) Lowering ceiling for a family of five,

(iv) Declaring benami transaction null and void, and


(v) Including the land reform laws in the Ninth Schedule of the Constitution, which places them beyond any challenge in any courts of law on the grounds of infringement of Fundamental Rights?

In the light of this policy, land ceiling legislations were enacted by all the states, except Goa and north-east states. But ceiling limits vary.

According to the Eleventh Plan document, the quantum of land declared surplus is far short of land which was estimated to be surplus on the basis of various national surveys. Thus, it is clear that reform measures have not been able to achieve the desired impact. The total area declared surplus so far has been 73.5 lakh acres only, of which 53.9 lakh acres have been distributed. The distribution of the remaining area of land declared surplus is held up mainly due to litigation.

Consolidation of Holdings:

Consolidation of fragmented agricultural land holdings has been an integral part of the land reform policy of the Indian government as fragmented holdings impede agricultural process. Initially, the programme of consolidation was started on a voluntary process but was later made compulsory.


Legislations have been passed in most of the states to prevent sub-division and fragmentation of lands beyond a certain limit. This minimum limit is known as the standard area and has been fixed at different levels by different state governments. Necessary provisions have been made in the Consolidation Acts in Assam, Bihar, Rajasthan, Gujarat and parts of Andhra Pradesh, and in the Land Reforms Acts in Uttar Pradesh and West Bengal to ensure that size of holdings does not fall below this minimum limit.

Cooperative Farming:

The Congress Agrarian Reforms Committee headed by J.C. Kumarappa, which was formed to study problems related to land reforms, concluded in its report (1949) that without cooperative moulds such as cooperative farming, “the efficiency of agriculture cannot be substantially increased”.

Four kinds of cooperative farming were identified by the Cooperative Planning Committee, These are:

(i) cooperative collective farming in which members have to give up their lands for ever but are paid wages and gain a share in the surplus produce; (ii) cooperative tenant farming, in which land owned by a society—comprising many farmers—is divided into holdings and then distributed among them. Each farmer has to pay a rent for his portion of the land. However, the producer of his holding is entirely his own; (iii) cooperative better farming wherein farmers get together to perform agricultural activities with improved methods but on their own separate lands; and (iv) cooperative joint farming wherein small farmers pool their lands together for better cultivation without giving up the ownership of their lands.

Cooperative farming has failed in the face of the existing inegalitarian economic structure. It has become a means of by-passing land reforms and is used for securing a preferential treatment in obtaining loans and grants from government. The lands pooled together are scarcely regarded as joint property.


Updating and Maintenance of Land Records:

In the absence of proper land records, the implementation of laws relating to regulation of rent, security of tenure, conferment of ownership rights on tenants and abolition of intermediaries becomes problematic.

With a view to assisting the states/Union Territories in the task of updating of land records, a Centrally-sponsored Strengthening of Revenue Administration and Updating of Land Records (SRA&ULR) scheme was started in 1987 with the following objectives:

(i) strengthening the existing survey and settlement organisations for early completion and preparation of land records in areas where this work still remains to be done; (ii) setting up survey and settlement organisations, especially in north-eastern region, where no land records exist; (iii) imparting pre-service and in- service training to revenue survey and settlement staff and strengthening of training infrastructure for this purpose; (iv) providing facilities for modernisation of survey and settlement operations, printing of survey maps, documents reports, copying and updating of land and crop records, and storage facilities by adopting the latest science and technology inputs; and (v) strengthening revenue machineries at village and immediate supervisory levels on a selective basis so that workload of these functionaries is made manageable.

Computerisation of Land Records:

The Centrally-sponsored scheme on computeri­sation of land records was started in 1988-89 with 100 per cent financial assistance as a pilot project in eight districts, viz., Rangareddy (Andhra Pradesh), Sonitpur (Assam), Singhbhum (Bihar, now in Jharkhand), Gandhinagar (Gujarat), Morena (Madhya Pradesh), Wardha (Maharashtra), Mayurbhanj (Orissa), and Dungarpur (Rajasthan) with a view to removing problems inherent in the manual system of maintenance and updating of land records and to meet requirements of various groups of users.

The main objectives of the scheme are:


(i) computerisation of ownership and plot-wise details for issue of timely and accurate copy of the record of rights to the land owners; (ii) to achieve low cost, easily reproducible storage media for reliable preservation for long time; (iii) to have a fast and efficient retrieval of information, both graphical and textual; and (iv) creation of a land information system and data base for agricultural census.

During the Eighth Five-Year Plan period, the scheme was approved as a separate Centrally- sponsored scheme on computerisation of land records. The scheme is being implemented since 1994-95 in joint collaboration with the national informatics centre (NIC), which is responsible for supply, installation and maintenance of hardware, software and other peripherals. It is being implemented in those districts except where there are no land records.


Land reform programmes were started in the country with great enthusiasm. All progressive land legislations were incorporated within the Ninth Schedule of the Constitution to protect them from being challenged in any court of law on the ground of violation of Fundamental Rights (with special reference to Articles 31A and Article 31C).

But soon the enthusiasm began fading and the implementation of land reforms became a very tame affair. The reasons for the poor performance of land reform programmes in India can be studied under three broad heads: legislative snags, lack of political will, and bureaucratic apathy.

Legislative obstacles:

These include the following:

(i) Ambiguous Definition of ‘personal cultivation’


(ii) Inadequate definition of ‘tenant’

(iii) The problem of voluntary surrender. The laws related to tenancy reforms cannot help tenants if they surrender their land voluntarily.

(iv) Inadequate ceiling laws. Though a uniformity in ceiling laws was brought about in 1972, considerable damage to the interests of tenants had already been done through various types of unscrupulous transfers of land and underhand dealings. The list of exemptions from ceiling was also unduly large.

Lack of political will power:

Bringing reform in the age-old agrarian relations requires a substantial amount of courage and determination on the part of the authorities, which is unfortunately lacking in India.

Bureaucratic apathy:

The bureaucracy is responsible for non-implementation of land reform measures. Its attitude towards land reforms has generally been lukewarm as it found it to be self- profitable to play safe by aligning with the large landlords and political power structure.

Related Articles:

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