T H E E C O N O M I C W E E K L Y January 9, 1960

Standardisation of Land Revenue Assessment R Giri

THE Taxa t ion E n q u i r y Commission (1953-54) was in favour of un­

de r t ak ing settlement operations in on ly those areas where o r i g i n a l set­t lement had not been done so far . In respect of the areas in which settlement had already been carr ied out and land revenue had been assessed on the basis of detai led land survey and soil classification, the Commission d i d not favour revision of settlement as it wou ld be an ex­pensive and t ime-consuming process, p a r t i c u l a r l y when resettlement was overdue for most of the areas in the count ry and the technical personnel were not avai lable in so a large num­ber as to complete the operat ions in a reasonable t ime. The Commission, nevertheless, pointed out large dis­pari t ies in the assessment of land revenue in the different States and in the different areas of the same Slate, and grea t ly emphasised the desirabi­l i t y of standardising the assessment and rais ing the receipts f rom land revenue in this process.

The Commission a t t r ibuted the exis t ing dispari t ies in land revenue assessment chiefly to the differences in price-levels of the different periods in wh ich o r i g i n a l or revision settle­ments were done. To min imise the dispari t ies , it recommended that the present incidence of land revenue in the areas last settled d u r i n g the periods 1880-99, 1900-19 and 1920-39 should be raised by 25, 12.50 and 6.25 per cent respectively in confor­mi ty w i t h the continued rise in prices since 1873, wh i l e no enhancement should be effected in those areas in w h i c h revision or o r i g i n a l settlement had been done after 1939. It also recommended revision of standardis­ed assessments every 10th year ac­co rd ing to rise or f a l l in the average level of the prices of the decennium over that of the preceding 20 years. Fo r the price-rise of more than 25 per cent and upto 43.75 per cent and above, it suggested enhance­ment of 3.25 to 12.50 per cent, and fo r s i m i l a r pr ice-fal ls , reduct ion o f 6.25 to 25 per cent. (Repor t of*the Taxa t ion E n q u i r y Commission, V o l I I I , p p 235-30)

W I D E D I V E R S I T Y I N L A N D R E V E N U E

One would hard ly dispute the Commission's f inding regard ing the wide divergence in the assessment of l and revenue of the different

areas. I f we take fo r i l l u s t r a t i on the present M a d h y a Pradesh State which comprises the areas of fou r o l d States fo rmed of parts of both erstwhile Br i t i sh Ind ia and pr incely States, we find that the incidence of l and revenue per acre of occupied area works out to Rs 0.90 in Maha-koshal , Rs. 1.45 in V i n d h y a Pra­desh, Rs 2.02 in Bhopa l and Rs 2.40 i n M a d h y a Bharat . I n i n d i v i ­dual districts, i t varies f r o m below Re 1.00 in Bastar, Mandla , East N i m a r , Be tu l , Chhindwara , Seoni, Raipur , B i laspur , Surguja , Ra igarh and Shahdol d is t r ic ts to between Rs 2.50 and Rs 4.00 in Gwal ior , Shajapur, Mandsaur , Morena ,

U j j a i n , ludore, Datia , Hat Jam and Bhind districts. In the r ema in ing 23 distr icts it ranges f rom Re 1.00 to Rs 2.50. Higher incidence of land revenue in Madhya Bharat and Bhopa l in comparison to Mahako-shal is understandable to some ex­tent, but it is difficult to under­stand the ra t ional i ty of higher rates in Vindhya Pradesh where soil fer­t i l i t y and economic condit ions of the people are in no way belter than those in Mahakoshal .

But the (Commission's view that the diversities in incidence of l and revenue are largely due to diver-gence in price-levels of the differ­ent periods in w h i c h settlements were done, is not sound. It assumes that the basis of assessment has been u n i f o r m in the different areas and times, and o n l y the va r ia t ion in prices has been taken as the sole c r i te r ion to revise the assessments. Accord ing to this view the percen­tage increase in the o r i g i n a l inc i ­dence of l and revenue should be less in the case of resettlements done du r ing the years 1900-19 when the prices were 195 per cent of the prices in the year 1873 ( the base taken by the (Commission) than the percentage increase in incidence in the case of resettlements done du r ing the years 1920-39 when prices were 242 per cent .of those in the base year. Bill it is found that the in ­crease in the incidence in Damon. Jabalpur , Sagar, East N imar , Hosh angabad, Seoni, Betu l , Balaghat and Chhindwara distr icts of the Madhya Pradesh State re-settled d u r i n g the fo rmer per iod varies f r o m 15 to 40 per cent and the increase in the

incidence in Nars imhpur , Mand la , Raipur , D u r g and Bi laspur districts resettled d u r i n g the latter per iod also varies f r o m 14 to 43 per cent. In the same Morena d is t r ic t , the revis ion sell lenient of 1925 resulted in 30 per cent increase in the inc i ­dence of laud revenue in Khategaon Pargana, and 20 per cent decrease in Kanod Pargana whi le the revision settlement done in Morena Pargana in 1939, gave only 16 per cent in­crease.

BASES OF ASSESSMENT

Thus the avai lable data do not substantiate the Commission's view that the dispari t ies in land revenue in the different areas are main ly due to differences in price-levels of the periods in which they were settled or resettled. N a t u r a l l y the question arises: what are the other causes of diversi t ies in land revenue assess­ments of the different areas? For­an answer, we must examine the bases of assessment.

The basis of land revenue assess­ment in some States or tracts is net assets of the estate, wh i l e in others, it is net produce or gross produce. S t i l l in another sot of States, capi ta l value or rental value determines the basis of assessment. These differ­ent bases are essentially the funct ion of certain ag r i cu l t u r a l and economic factors. The ag r i cu l tu ra l factors are qua l i ty of soil and level or posi t ion of the land, type of crops raised, possibilities of na tura l or a r t i f i c ia l water ing, manur ing , and land improvements, and the econo­mic factors are nearness to the v i l ­lage habi ta t ion and market, trans­por t and communicat ion facil i t ies, prices of crops raised, and the eco-noTnic condit ion of the tenants. T h o u g h the different bases of assess­ment agree more or less in essen­tials, the) differ substant ia l ly w i t h regard to details of ca lcula t ion. The different factors are not scien­t i f i ca l ly and comprehensively as­sessed in a l l settlements. Some factors are complete ly left out , and idiosyncracies of the Settlement Officers have often f i l led the gaps. In different settlements, different systems of soil classification have been adopted; and they are not comparable. W h i l e a comparison is possible on the basis of p roduc t iv i ty and value of land in areas taken in

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one settlement, no compar ison is possible between areas w h i c h have been assessed in different settle­ments in the same or different periods. I t i s thus the difference in deta i ls of ca lcu la t ion of the bases of assessment w h i c h is chiefly res­pons ib le f o r differences in land revenue.

HISTORICAL FACTORS Other factors responsible f o r dis­

par i t ies are h is tor ica l circumstances, difference in the out look of the ru lers of the pr ince ly States, and abundance or scarcity of resources other than land on which taxat ion cou ld be imposed. In the same Ra t l am Tehs i l w h i c h is comprised of vi l lages be long ing to three for­mer p r i n c e l y Slates, the rate per acre f o r the same standard K a l i 1 soi l varies f r o m Rs 2,19 to Rs 6.06 (Rs 3.81 in Dhar , Rs 4.56 in Rat lam, and Rs 2.19 to Rs 6.06 i n S a i l a n a ) . The non-occupancy tenants in the M adhya Bharat dis­tr icts were requi red to pay some­what h igher contractual rents than the occupancy tenants who pa id rents fixed by the Settlement Offi­cer at c i rc le rates on the .soil-classi­f icat ion basis. The p i t ch of assess­ment in the Jag i rda r i areas was generally higher than that in the Z a m i n d a r i areas. In the wheat dis­t r ic ts of Sagar, Damo, Jabalpur , Hoshangabad and Nar s imhpur in Mahakoshal , the rents were qui te h i g h even in the o r i g ina l settlements, whi le those in the r ice distr icts of Bi laspur , Ra ipur and D u r g were much lower . The o l d dispari t ies have continued d u r i n g the subse­quent settlements because no at­tempt was made to f o l l o w a u n i f o r m scale of soil-classification in the different areas; and enhancement effected in these areas was most ly on an ad-hoc basis according to local circumstances.

It is not that the Commission was not a l ive to these basic factors and h is tor ica l circumstances which have led to disparit ies in l and re­venue assessment, bu t in i ts anxiety to s i m p l i f y the procedure of stand­ardisat ion, i t has l a id undue em­phasis on the par t p layed by f luctua­tions in prices at the cost of other factors w h i c h govern l and 'values and should thus f o r m the basis fo r f o r m u l t t i g n of a n y scheme fo r les­sening the dispari t ies in assessment The f o l l o w i n g quotat ion f r o m its r epor t bears . ample testimony' to i ts awareness of these factors and cir­

cumstances:—

T h o u g h the general pat tern of l a n d revenue settlement and assess­ment in I n d i a b road ly f o l l o w s the descr ipt ion g iven above, ( i e , i n i ts r e p o r t ) , the development of the different systems has not been on the same lines in a l l States. Th i s d ispar i ty has been fur ther widened w i t h the in tegra t ion of the former p r i n c e l y States where, except in a few States administered by re t i red or deputed officers f r o m Br i t i sh Ind i a , there were no regular settle-ments or systems of l and revenue The result is that, at one end we find States l ike Punjab, Bombay (before the merger in i t of certain p r ince ly States), Madras, Assam and Mysore i n w h i c h p rac t i ca l ly a l l the l and has been surveyed, mea­sured and settled on some definite pr inciples . At the other, there are States l ike Rajasthan, Saurashtra and Madhya Bharat where there are s t i l l large port ions of unsurveyed and unsettled land and where set­tlements made in the past fo l lowed no scientific p r inc ip les and have been more or less the result of po l i t i c a l condit ions p reva i l i ng in the States at the t ime . In between, there are Stales l ike Ut t a r Pradesh and Madhya Pradesh where there have been settlements on regular lines, but owing to the prevalent zamindar i system, several interme­diaries had crept i n . Recently, these intermediaries have been e l imina ted and the fo rmer tenants have become occupants of land d i rec t ly respons­ib le to the State Governments f o r payment of revenue. But the reve­nue realised f r o m these former te­nants is the same as the rent p a i d by them previously to the interme­diar ies and has not been revised on the a b o l i t i o n of the intermediaries. The lands have not been resettled on the hi ther to accepted pr inc ip les of revenue assessment, viz, p roduc t i v i t y of the l and , cost of cu l t iva t ion , eco­nomic faci l i t ies , etc. It appears that in these Slates, considerations such as past h is tory , po l i t i c a l expe­diency and the adminis t ra t ive diffi­culties most influenced the rates of land revenue recently fixed and these are l i k e l y to continue for a t ime. C n d i t i o n s i n the States o f West Bengal , B iha r and Orissa are more or less s imi la r , and in qu i t e a large par t of these States, there was no organised land revenue ad­min i s t ra t ion at the lower level be­cause of the permanent settlement ( i b i d , p p 184-85) ."

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- ALTERNATIVE M E T H O D OF STANDARDISATION

Since the Commission's recom­mendation to standardise the land revenue assessment by e l i m i n a t i n g the effect of var ia t ions in 'general price-level is not .sound, it is neces­sary to evolve some different me­thod to measure the extent of dis­par i t ies in assessments in different areas and to formula te proper scales to min imise them. Instead of cor re la t ing the p i tch of assess­ment on ly to price-level , i t w o u l d be more appropr ia te to l i n k i t w i t h the money-measure of the total effects of the Various factors wh ich contr ibute to the value of land . Such procedure w i l l take in to ac­count both the ag r i cu l t u r a l factors which govern the p roduc t i v i t y of l and and the prices of the products raised which u l t ima te ly determine the value of land. The required money-measure of the total effects of these agro-economic factors can be f o u n d either f r o m the sale or lease value of the l and or the net or gross value of a l l produce raised thereon.

The statistics of sale or lease value of land can he tabulated f rom the returns of the registrat ion offices. However, data on sale or lease value of land are not readi ly avai lable in a systematic compi la t ion in many States. The gross value of the pro­duce can be calculated on the basis of the average yields and f a r m p r i ­ces (i e, the wholesale prices received by the farmers) of the crops d u r i n g the preceding decennium or quin­quennium. Such data arc now avai lable in almost a l l States for a f a i r l y large number of years. The net value of the produce can be ob­tained after deduct ing f rom the gross value of the produce the cost of cu l t iva t ion of crops, for the deter­mina t i on of which p rac t i ca l ly no Stale has conducted comprehensive enqu i ry on a scientific, basis. Thus the statistics of the gross value of the produce run o n l y be used as a dependable money-measure of the total effects of the various agro-eco­nomic factors wh ich determine the value of l a n d .

GROSS VALUE AS M U L T I P L E

The gross value of the produce can be calculated in terms of per acre of cultivated area. L a n d re­venue is expressed either in terms of per acre of occupied area ( i e area of hold ings) or per acre of cul t ivated area. For the sake of

January 9, I 9 6 0 T H E E C O N O M I C W E E K L Y

comparison, both should be expres­sed in terms of per acre of cul t ivat­ed area. After this is done, the gross value of the produce can be expressed as mu l t i p l e of the current rate of land revenue. Th i s mu l t i p l e can be calculated for the whole of a distr ict or a smaller administra­tive uni t wh ich has been covered in the samp or s imi la r settlements. Where this mul t ip l e is h igh , the ob­vious conclusion w o u l d be that the present p i tch of assessment is low and there is jus t i f icat ion for en-hance.ment and vice-versa.

There w i l l be l i t t l e jus t i f ica t ion for any enhancement in land, revenue in those distr icts or areas where the gross value of the produce is on ly 20 . or less times the land revenue. The Taxa t ion Enqu i ry Commission has further ruled out any enhance­ment larger than 25 per cent over the exis t ing rates, because a sudden rise might cause inconvenience and hardship to the people and might arouse their resentment. Therefore, a m a x i m u m enhancement of 25 per cent, may be effected in those dis­tricts where the gross value is 100 or more times the rental value or thereabout. Between these two ex­treme l imi t s , the incidence of land revenue may be enhanced in pro­gression by 10 to 20 per cent. The scales of enhancement may be as f o l l o w s :

Gross value of produce as mu l t i p l e of land Proposed % revenue. increase. Below 20 0 20-30 10 30-50 15 50-100 20 Above 100 25

THE CASE FOR UNIFORMITY A question wor th consideration at

this stage is whether the assessment w i th in a distr ict or any other ad­minis t ra t ive unit should be raised at the same rate in a l l the assess­ment groups in it or a graduated scale should he adopted as the in­cidence of land revenue differs w i d e l y from one assessment group to another Acessment group in the same distr ict or area. It may be pointed out that w i th in a dis tr ic t or any area settled simultaneously, either the settlements in a l l the parts have been done d u r i n g the same pe r iod or d u r i n g periods close to each other, and they have been done almost by the same Settlement Officer according to the same p r i n ­

ciples. The variat ions in the as­sessments w i t h i n a dis t r ic t or area is, therefore, not so much due to var ia t ion in price-levels or h is tor i ­cal circumstances as due to genuine differences in the p roduc t iv i ty of the soils and other factors wh ich are taken in to consideration in fix­ing the assessment. There w o u l d be thus l i t t l e logic in a p p l y i n g different scales of revision in the different assessment groups of the same dis t r ic t or area.

In view of h igh appreciat ion in land value and value of the produce raised due to economic advance­ment and price-rise, there is l i t t l e jus t i f ica t ion of any reduction in the present p i t ch of assessment in any area, howsoever h i g h i t may appear in comparison to other areas. There­fore, no decrease is recommended. But the grading of the mul t ip le s and the rates of increase for the different grades of mul t ip les can be varied in the different States on the consideration of local condit ions. After the statistical ratios of land revenue to land value are calculated and enhancement effected on the basis of these ratios, the effects of ag r i cu l tu ra l and economic factors w h i c h should r ea l ly f o r m the basis for land revenue assessment, w i l l be reflected in the enhenced assessment, and the effects of such extraneous factors such as his tor ical circumstan­ces w i l l get min imised . If the dis-parities in any State arc very p r o -nounced, they can be i roned out in stages by repeating th is process, wi thout causing drastic revisions in one stroke.

After the standardisat ion of ass­essment, it should be possible to adopt the scales of pe r iod ica l revi­sion of standardised rents on the basis of var ia t ion in price-level as recommended by the Taxa t ion Kn­q u i r y Commission and as referred to in the concluding part of the first paragraph of this paper.

CONCLUSION

W i t h the impos i t ion of cei l ing on land holdings, standardisation of land revenue assessment w i l l be the final l i n k in the chain of l and re­forms in this country , The various classes of landed aristocracy having been e l iminated and the land d i s t r i ­buted to the actual cul t ivators in not too b ig holdings, the standardisation o f land revenue assessment w i l l not on ly contr ibute to equitable d i s t r i ­but ion of the burden of l and tax on them, but they w i l l also be made

to contr ibute their appropr ia te share to the nat ional revenue w h i c h has to be raised in a l l possible jus t i f ied manner for financing the develop­ment projects.

The various land reforms mea­sures have been taken chiefly w i t h a view to benefit t ing the actual t i l l e r s of land to whom does also accrue the benefits of ag r i cu l tu ra l develop­ments under the Plan. The standar­disation of land revenue assessment should, therefore, receive the atten­t ion of the pol icy framers and legis­lators to achieve the t w i n objectives of equity in taxation on land and ra is ing of finances for our develop­ment plans.

SUGAR RELEASES

GOVERNMENT has decided to release 1.75 lakh tons of sugar.

There w i l l be no release for free sale f rom the factories in Ut tar Pra­desh. Nor th Bihar and Punjab. Al lo tments of sugar to Madhya Pradesh. Rajasthan. Uttar Pradesh, Bihar . Madras, Orissa. Kerala . Horn-bay State, Himachal Pradesh. Assam. M a n i p u r and T r i p u r a . f rom factories in the cont ro l led region, w i l l be made on ly to the nominees of the Slate Governments. In the case of Punjab and Jammu and Kashmir , al lotments w i l l be made direct to the State Governments or to their nominees. In the case of West Ben­gal, al lotments in the districts and also for Calcutta w i l l be made to nominees of the State Government. Al lo tments to De lh i w i l l continue to be made on the exis t ing basis.

The cont ro l led ex-factory price for U P and Nor th Bihar factories is Bs 37.85 per maund and for factories in Punjab Rs '18.35 per maund for ISS 0-29 grade w i t h the preseribed price differentials for other grades. The fixed F O B destination prices in respect of allot­ments made to K a n p u r and Calcutta w i l l be Rs 38.60 and Rs 39.85 per maund respectively for sugar of ISS D-29 grade.

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