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The Punjab Land Alienation Act and the Professional Moneylenders

  • M. Mufakharul Islam (a1)

Extract

Following its annexation by the British in 1847 the Punjab province witnessed several significant developments—individualization of property rights in land, fixation and rigorous collection of land revenue in cash, introduction of a new legal-administrative system, construction of a road and railway network, canal-building activities and a colonization programme, commercialization of agriculture and increased monetization of economic transactions. These developments created a situation which, in turn, gave rise to two related problems –agricultural indebtedness and land transfer.1 These problems were not entirely unknown in the province in the earlier period, but during the last quarter of the nineteenth century indebtedness became so widespread and land transfer increased to such an extent that these became a matter of concern and embarrassment to many officials. For the magnitude of these problems seemed to contradict the colonial government's claimthat under its paternal care the province was enjoying agricultural prosperity, and the land revenue rates were moderate. Simultaneously some officials warned that there was a political danger in the situation. For a substantial part of the land sold and mortgaged by the cultivators was going to the moneylenders, and this meant the dispossession of the peasant proprietors. If no remedial steps were taken, it was argued, the animosity of the peasant population towards the moneylenders (sahukar) would ultimately be direted against the government.2 Initially the government refused to take any steps, arguing that the facts were insufficient 'to warrant interference by legislature to restrict the transfer of land'.3 But ultimately the contention that the problem posed a political danger gained ground and the Punjab Land Alienation Act was passed in1900 (and came into effect in 1901).4

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1 These developments have been discussed by several scholars: Bhatia, Shyamala, Social Change and Politics in Punjab 1898–1910 (New Delhi, 1987); Banerjee, Himadri, Agrarian Society of the Punjab 1849–1910 (New Delhi, 1982); Sharma, Inderjit, Land Revenue Administration of the Punjab (New Delhi, 1985);Ali, Imran, The Punjab under Imperialism 1885–1947 (New Delhi, 1989);Paustian, P. W., Canal Irrigation in the Punjab (New York, 1930);Talbot, Ian, Punjab and the Raj (New Delhi, 1988) and Kessinger, T. K., Vilyatpur 1848–1968) (Berkeley and Los Angeles, 1974);Hamid, Naved, ‘Dispossession and Differentiation of the Peasantry in the Punjab During Colonial Rule’, Journal of Peasant Studies, 10 (10 1982).

2 There was a communal dimension to the problem in the sense that while most of the borrowers were Muslims, most of the lenders were Hindus. This aspect of the problem was most emphasized by Thorburn, S. S., Musalmans and Moneylenders in the Punjab (London, 1886).

3 Cited in Sharma, , Land Revenue Administration, p. 177.

4 For details of the provisions of this Act and the rules framed under it see Aggarwal, Om Prakash, Agrarian Legislation in the Punjab, vol. I (Lahore, 1940) and SirDouie, J. M., Punjab Land Administration Manual (Lahore, 1931).

5 Initially there was a third category known as ‘statutory agriculturists’. This category was dropped as a result of the amendment of the Act in 1907. By 1940 the Act was amended ten times.

6 Sharma, , Land Revenue Administration, ch. 3; Bhatia, Social Change and Politics, pp. 227–35;Banerjee, , Agrarian Society, ch. 5;den Dungen, P. H. M. Van, The Punjab Tradition, Influence and Authority in Nineteenth Century India (London, 1972);Barrier, Norman G., Punjab Land Alienation Bill, 1901 (Duke University, 1966).

7 Barrier, Norman G., ‘The Formulation and Enactment of the Punjab Alienation of Land Bill’, Indian Economic and Social History Review, 2 (04 1965).

8 Shigemochi, Hirashima, The Structure of Disparity in Developing Agriculture: A Case Study of the Pakistan Punjab (Tokyo, 1974), p. 41.

9 Misra, S. C., ‘Commercialisation, Peasant Differentiation and Merchant Capital in Late Nineteenth-Century Bombay and Punjab’, Journal of Peasant Studies, 10 (10 1982).For similar views about the effectiveness of the Act see Darling, M. L., The Punjab Peasant in Prosperity and Debt (New Delhi, 1977), p. 229;Saini, B. S., The Social and Economic History of the Punjab 1901–1939 (New Delhi, 1975), p. 224;Dewey, Clive J., ‘Some Consequences of Military Expenditure in British India: The Case of the Upper Sind Sagar Doab, 1849–1947’ in his (ed.), The Arrested Development in India (New Delhi, 1988).

10 Talbot, , Punjab and the Raj, p. 56.

11 Administration Report of the Punjab and its Dependencies (annual) 1901/1902, p. 37.

12 Annual Report on the Land Revenue Administration of the Punjab, 1887/1888, p. 25 (henceforth LRARP); Proceedings, Revenue and Agriculture,Land Revenue,October 1895, nos 72–73A, pp. 46–7.

13 From 1874 to 1887 statistics on land transfer were reported under two heads—agriculturists and non-agriculturists. From 1888 the latter category was replaced by ‘new-agriculturists’. There were certain defects in this categorization but it was claimed that despite this the reported statistics could be taken as reliable for the purpose of comparison. For details see Proceedings, 1895, p. 47.

14 Hirashima, , Structure of Disparity, pp. 37–53. Hirashima emphasizes the fact that he annual rate of return on land purchase was even lower than the rate of interest charged by the village Co-operative Credit Societies. But it is the rate (which was substantially lower) at which these societies borrowed that should be taken into consideration.

15 For the same view that the merchant-moneylenders were more careful of opportunity costs see Bhattacharya, Neeladri, ‘Lenders and Debtors: Punjab Countryside 1880–1940’, Studies in History, 1, New Series (1985). However, he speaks only about the opportunity cost of mortgage.

16 Many contemporary observers of the Punjab agrarian scene also believed that land purchase yielded a low rate of return and was, therefore, unprofitable. For details see Assessment Report (henceforth AR) of the Kharian Tahsil of Gujrat District 1913/1914, p. 17; Punjab Provincial Banking Enquiry Committee Report, Evidence 1, pp. 148, 293–4, 447.

17 For details see Report on the Marketing of Wheat in India (New Delhi, 1937), p. 15;Annual Report of the Indian Central Committee (New Delhi, 1945), p. 72. For sugarcane, see Pray, C. E., ‘The Economics of Agricultural Research in British and Pakistani Punjab 1905–1975’ (Ph.D. Thesis, Pennsylvania University, 1978), p. 29.

18 LRARP 1908/1909, p. 2. In 1922 a record 87 per cent of the suits for enhancement was successful LRARP 1921/1922, p. 17.

19 Settlement Report (henceforth SR), Jullunder 1880–86 and 1913–17; SR Lundhiana 1878–83 and 1908–11, SR Ambala 1893 and 1910, SR Karnal 1872–80 and 1907–09. See also SR Hoshiarpur 1910–14, p. 26; SR Gurdaspur 1912, p. 19; SR Ferozepore 1910–14, p. 11; AR Mamdotjagir, Ferozepore District, 1913, p. 40; AR of the Hafizabad Tahsil, Gujranwalla District, 1925, p. 24; AR of the Wazirabad Tahsil Gujranwalla District, 1925, p. 19. Indeed, almost every Assessment Report does mention that rent was increasing. For more examples on the subject, see Calvert, H., The Wealth and Welfare of the Punjab (Lahore, 1922), pp. 116–17.

20 Batai was a cropsharing system and the proportion of land cultivated under this system increased from 29% in 1901/1902 to 36% in 1931/1932. Most of the Settlement Reports and Assessment Reports mention that batai rent was increasing.See also Bhattacharya, Neeladri, ‘The Logic of Tenancy Cultivation: Central and South West Punjab’, Indian Economic and Social History Review, 20 (0406 1983).

21 AR of the Attack Tahsil of the Attock District 1925, p. 23; SR Hoshiarpur 1910–14, p. 18;Kessinger, , Vilyatpur, p. 152.

22 SR Gujrat 1930, p. 13;Punjab District Gazetteers (henceforth DG) XXXIV-A, Muzqffargarh District 1929, p. 136.

23 AR of the Garhshankar Tahsil of Hoshiarpur District 1912/1913, pp. 17–18, 39; LRARP 1934/35, P. 30.

24 Howlader, S. R., ‘Portfolio Selection and Demand For Assets in a Peasant Economy: A Theoretical Analysis’, Dhaka University Studies, part C, 7 (12 1987).

25 The Punjab Provincial Banking Enquiry Committee was told, ‘… no Zamindar buys land with the idea that it will appreciate in value and he will then sell’. Evidence. 1, p. 94. There is a contradictory evidence which reports: ‘In few villages there has been land speculation … The purchasers are in many cases men who have emigrated to Bombay, China or East Africa and returned full of money’, AR Attock Tahsil, p. 21. But these were exceptional cases.

26 Calvert has shown that over a period of 21 years (1896/18971916/1917) there were, on average, 29 transactions per village. There were approximately 2½ million families directly supported by agriculture. Assuming that vendors and vendees were equal in number and separate people, this means that on average each family had a chance of buying a plot of two or three acres of cultivated land once in 27 years, Calvert, Wealth and Welfare, p. 110.

27 This explains why mortgage was preferred to sale, even though the common form of mortgage in the rural Punjab required the mortgager to surrender the use of the property to the mortgage in lieu of interest payments, meaning that the borrower lost the production of the land for the duration of the mortgage. Kessinger, Vilyatpur, pp. 148–56.

28 Bhattacharya, , ‘Lenders and Debtors’.

29 It is not relevant to refer to interest rates in the urban areas because non-agricultural classes of the rural areas (as also the peasant) had restricted access to the urban money market for loan or investment.

30 In this connection it may be mentioned that the export of raw cotton from the province increased from 75 thousand maunds in 1891/92 to 2146 thousand maunds in 1918/19. During the same period export of grains and pulses increased from 19,184 thousand maunds to 40,808 maunds.

31 Report of the Punjab Provincial Banking Enquiry Committee, 19291930, vol. I (Lahore, 1930), p. 22.

32 Census of India, 1921, vol. XV, Punjab and Delhi, part I, Report, p. 50.

33 The annual average during 1900/01–1917/18 amounted to Rs 15.8 million. For details see Calvert, , Wealth and Welfare, p. 163.

34 In 1910/11 (the first year for which reliable statistics are available) the non-agriculturists owed 14 per cent of the total cultivated area of the province, LRARP 1910/11, Statement 111. The fact that a part of this land was owned by the village menials is clear from the evidence available from Census of India, 1891 vol. XIX. The Punjab and Its Feudatories, Abstract 91. About the purchase of land by this class in the late nineteenth century see Proceedings 1895, p. 47.

35 Bhattacharya, Neeladri, ‘The Logic of Tenancy Cultivation’.

36 Ibid.; ‘Agricultural Labour and Production: Central and South-East Punjab 1870–1940’, in Raj, K. N. et al. (eds), Essays on the Commercialisation of Indian Agriculture (New Delhi, 1985);Jurgensmeyer, Mark K., ‘Political Hope: The Quest for Political Identity and Strategy’, part I (Ph. D Thesis, University of California, Berkeley, 1974), p. 82.

37 Incidentally, the units of sale were normally small and this meant that even the marginal savers could afford to compete for land.

38 For details of the land grant policy of the government see Ali, Imran, The Punjab Under Imperialism, chs, 2–4.

39 The urban commercial classes were very careful when they were bidding for agricultural land in the auction market. Proceedings, Land Revenue and Agriculture (Rev.), April 1906, 6A. The same attitude is underlined by the fact that they increased their share of the purchase in the Nili Bar Colony during the Depression years when land prices declined, Ali, Imran, Punjab Under Imperialism, p. 89.

40 Calvert, , Wealth and Welfare, p. 109.

41 ‘He [moneylender] represents the richest single class. His profits probably exceed those of all the cultivators put together’. Ibid., p. 130.

42 Cited in Hamid, Naved, ‘Dispossession and Differentiation’.

43 Kessinger, , Vilyatpur.

44 AR Zira Tahsil of Ferozepore District, 1912/13, p. 23, AR Garhshankar Tahsil, 1912/13, p. 27.

45 LRARP 1928/29, p. 29. See also LRARP 1909/10, p. 14; LRARP 1910/11, p. 14; LRARP 1930/31, p. 28; LRARP 1937/38, p. 40.

46 LRARP 1930/31, p. 28.

47 Saini, , The Social and Economic History, p. 225.

48 The fact that the Land Alienation Act was contravened in this manner was also pointed out by committees and commissions of inquiry appointed by the government. For example, see Report of the Famine Inquiry Commission, 1945, p. 465.

49 DG Muzaffargarh, 1929, p. 38.

50 LRARP 1911/1912, p. 14.

51 LRARP 1915/1918. p. 13. This was facilitated by the fact that the immense variety of sub-tribal designations made the question of status indefinite.

52 LRARP 1931/1932, p. 33.

53 LRARP 1935/1936, p. 34.

54 Sharma, H. C., ‘Caste Mobility among the Artisan Castes of the Punjab,’ Proceedings of the Punjab History Congress,13th Session, 03 1971.

55 LRARP 1908/1909, p. 17.

56 LRARP, 1911/1912, p. 13. It was further reported that many people who had their application rejected by the collector went to the Civil Court and obtained a decree against a dummy adversary to the effect that they were Jats or Rajputs. But the Collector argued that since the government was not a party to the civil suit the decree was not binding. There was also a marked tendency among such Muslim menials as Lother (blacksmith), Tarkhan (carpenter), Fakirs (Muslim …) to try to get themselves included among the agricultural tribes, LRARP 1930/1931, p. 28.

57 LRARP 1914/1915, pp. 12–13.

58 PBEI, Sales of Land, p. 16.

59 AR Multan and Shujabad Tahsils, 1919, p. 19.

60 Report of the Alienation of Land Inquiry Committee, West Punjab (Lahore, 1949).

The Punjab Land Alienation Act and the Professional Moneylenders

  • M. Mufakharul Islam (a1)

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