ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

P N JunankarSubscribe to P N Junankar

Mobility and Inequality in Indian Agriculture

P N Junankar This paper attempts to study changes in income and wealth distribution in Indian agriculture, using Farm Manage- ment Studies data for the Ferozepur district of Punjab. The proposed method of analysis allows the author to test whether inequality is increasing or decreasing on average or whether it is changing due to mobility in the sample. Also tested are the commonly made assumption of 'time homogeneity,' i e transition probabilities remain constant over time, and whether an individual farm that does well in one period does even better in the next period.

Green Revolution and Inequality

P N Junankar An inevitable consequence of the Green Revolution has been increasing inequality in rural India. As the high-yielding varieties of crops require regular supply of irrigation and fairly large amounts of fertilisers, the advantage has been biased towards the large farms. These farms have also begun to substitute capital (e g, tractors) for labour. Since the new varieties are profitable there would be an increase in capitalist farming, an attempt by landlords to evict their tenants and cultivate the land with hired labour, and an attempt by large farmers to buy out small farmers as far as the land ceiling legislation will stretch.

Poverty in India-A Comment

Poverty in India A Comment P N Junankar IN a long and well-documented paper Dandekar and Rath [1] reach two major policy conclusions. Firstly, that the policy of imposing land ceilings would lead to fragmented and uneconomical holdings. In addition, the working of a free market economy would lead to a tie facto (though not de jure) reconsolidation of land. They argue that a "patently uneconomic proposition cannot be sustained by law".1 As an alternative policy to alleviate poverty they suggest a massive public works programme "to enable the 30 per cent rural poor living below the desired minimum (excluding the 10 per cent poorest) to reach the minimum consumer expenditure.. . " This would be financed by the top 5 per cent of the rich agreeing "to a cut of a mere 15 per cent in their consumer expenditure'' and another 5 per cent "have to agree to a cut of a mere 7.5 per cent in their consumer expenditure."3 It is the contention of this note that Dandekar and Rath's suggestion for a massive public works programme cannot "meet the claims of the poor within the framework of private ownership of the means of production".81 shall argue that the increase in taxation required to finance the public works programme will be sufficiently large to have serious disincentive effects. In addition, the collection costs would be large (if not infinitely large!) and politically in the realm of the impossible (within the present socio-political .structure).

Land Ceilings as a Tax on Agriculture- A Note

ceilings has concentrated on the distributional (equity) aspects of the measure. In this" paper I would like to discuss the implications of ceilings on agricultural land in a broader context. I will look at both the equity and efficiency aspects of the imposition of land ceilings. Although I am aware of gross simplification, I shall assume that any measures passed by the Government are implemented effectively. It is well known that implementation of land reforms requires efficient administration and legislation that is retroactive. In the next section I will suggest that legislation on land ceilings is analogous to a form of (wealth) taxation and can therefore be studied in that context. This is, apparently, the first time that the subject is being looked at in a public finance context Ceilings and Taxation Agriculture is in a favourable position vis-a-vis industry since it is not subject to any direct taxes. Assume that (a) all land is homogeneous and fanners face competitive conditions so that input and output prices are given, (b) there are non-increasing returns, (c) there is a positive discount rate and (d) there is certainty. Then there would be a one-to-one correspondence between 'permanent income' (the present value of the future stream of income) and the size of the farm. Now assuming no compensation, we can construe ceilings as a tax on permanent income when the tax rate is zero before some critical value and one after it Since most of the existing suggestions include compensation as one of the features it implies that the tax rate after the critical value is greater than zero and less than one if the compensation paid is partial. It is feasible to work out a system of progressive taxation such that the amount of compensation paid decreases at the margin with the excess of the acreage over the ceiling.
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