History of agro-economy – growth and resistance in India

Condition of agriculture and land reforms

After the British rule, A large section of the population, about three-fourths, was dependent on agriculture for employment and for the food and fiber consumed by farming families and landlords. Agriculture in India was based mainly on feudal land relations where a majority of the population lived in rural areas, contended with low productivity, and had only primitive technology. The new democratic government had a huge task when attempting to integrate the country and provide sufficient employment as well as food and fiber to the hungry population. The government of India designed five-year plans to tackle massive problems related to all sectors of the economy.

Under the 1949 Indian constitution, states were granted the powers to enact and implement land reforms. This autonomy ensures that there has been significant variation across states and time in terms of the number and types of land reforms that have been enacted. We classify land reform acts into four main categories according to their main purpose.


The first category is acts related to tenancy reform. These include attempts to regulate tenancy contracts both via registration and stipulation of contractual terms, such as shares in share tenancy contracts, as well as attempts to abolish tenancy and transfer ownership to tenants.

The second category of land reform acts is attempts to abolish intermediaries. These intermediaries who worked under feudal lords or the Zamindars to collect rent for the British were reputed to allow a larger share of the surplus from the land to be extracted from tenants. Most states had passed legislation to abolish intermediaries prior to 1958.

The third category of land reform acts concerned efforts to implement ceilings on land holdings, with a view to redistributing surplus land to the landless.

Finally, we have acts which attempted to allow consolidation of disparate land-holdings. Though these reforms and in particular, the latter were justified partly in terms of achieving efficiency gains in agriculture. It is clear from the acts themselves and from the political manifestos supporting the acts that the main impetus driving the first three reforms was poverty reduction.


The chief objective of First 5-Year Plan was to restore the disequilibrium created by the Second World War and the Partition. The Partition of the country resulted in a transfer of the fertile wheat areas of the Punjab and rice areas of Bengal to Pakistan. Pakistan also benefited by getting the long-stapled cotton and jute-growing areas. And a relatively much large acreage of the irrigated area.

To overcome these short­falls, the First 5-Year Plan gave a predominant importance to the development of agriculture and irrigation. Out of a total actual investment, 31% was allocated for agriculture.

Nearly 12 lakh acres of land were reclaimed and brought under farming. As many as 14 acres were brought under irrigation. At the same time the Japanese method of rice-cultivation was largely extended. Nearly 40% of the villages were brought under CDP and NES.

The effects of increase in food production were quite favorable. India became self-sufficient in food grains. The price index for agricultural commodities came down too. Thus, the increase in farm output during the First Plan helped to end inflation, stabilized the economy and paved the way for a higher rate of development.


The over-fulfillment of First 5-Year Plan target of food output made the planners think that the food problem was solved and that the agricultural base was strengthened. Hence, they devoted a relatively less outlay for agriculture. Only 20% of the public outlay as compared to 33% in the First Plan

In money terms, however, the outlay in the Second Plan was higher. The targets originally fixed for the Second Plan which were much lower were revised upward. These targets were to be achieved by the same measures as those in the First Plan.

The actual progress in agricultural front was quite substantial but fell far short of targets fixed earlier. Acres of additional land were to be brought under irrigation. The actual achievement was about 16 acres only.

The consumption of fertilizer increased very slowly. In brief, the methods of increased agricultural production did not make as much headway as it was originally visualized by the Planning Commission. However, the actual output by the end of Second Plan was much more than the actual output of the beginning of the Second Plan. But these was a shortfall in the Production of all commodities except sugarcane and tea.

The Planning Commission had been blamed for all this on the ground that it did not give enough emphasis to agricultural development and instead it turned its attention to the growth of heavy and basic industries. We are of the opinion that such a criticism was not fair to the Planning Commission. It did understand the significance of increased farm output, but it believed that with a smaller outlay, it would be possible to bring about a larger output.

The poor development of agriculture during Second Plan led to a good number of difficulties in the Indian economy. The most important effect was the rise in the price level. During this Plan, the wholesale price index of all commodities increased by 35%.

As a result of rise in farm prices, other commodities also recorded rise in prices. An inflationary situation rapidly appeared. The imports of food grains which were cut during First Plan had to be resumed and precious foreign exchange which meant for machinery and other industrial raw materials had to be wasted in importing food grains.


Third 5-year Plan gave a Predominant emphasis to agriculture. One of the major objectives of the Plan was to achieve self-sufficiency in food grains and to increase agricultural production for exports.

It says, “In the scheme of development during the Third Plan, the first priority necessarily belongs to agriculture”. Experience under the first two plans and especially in the second plan has shown that the rate of growth in the agricultural production. It is one of the main limiting factors in the process of Indian economy.

Agricultural production had therefore, to be increased to the largest extent feasible, and adequate resource have to be provided under the Third Plan for raising the agricultural production. The rural economy has to be diversified and the proportion of the population dependent on agriculture gradually diminished.

There are essential aims, if the income and levels of the rural population are to rise steadily and to keep pace with income in other sectors, both in formulating and implementing programs for the development of agriculture, the guiding consideration is that whatever is physically practicable should be made financially possible and the potential of each area should be developed to the possible extent.

In short, the Third Plan failed on the agricultural front. In contrast to the targeted increase of 30% or 6% per year in food grains a bare 10% or 2% per year was realized. At the same time, the index of food grains prices had short up from 118.4 in 1961-62 to 168.8 in 1965-66. As a consequence of the shortfall in food production food-grains worth Rs.1.10 crores were imported between 1961-62 and 1965-66. This strained our foreign exchange position further.