The Evolution of Right to Property in India

Ever heard of the Stevenson Restriction Scheme?

My congratulations if you have, because even the most devoted aficionado of obscure trivia would be hard pressed to know of the plan to restrict output in Malaysian rubber plantations in the year 1922. The reason was because of a steep fall in demand for rubber, after the end of the First World War, and rubber plantation owners in Malaysia wanted to control output to ensure better prices.

Bad economics, sure, but as one might expect if one had a cynical bent of mind, the demand got passed, and output restrictions came into play. If you were a small plantation owner (and this was for that time in Malaysia a guarantee that you were not British), you could produce no more than 320 pounds per acre per year.

Where did this number come from? Well, large British owned plantations produced 400 pounds per acre per year, so if you made the seemingly reasonable assumption that smaller outfits would work with lower efficiency, say 80% of the British levels, you ended up with the 320 figure.

Except things didn’t go according to plan.

Incentives matter.

That’s one of the cornerstones of our lessons in economics here, and repeating it, ad infinitum, is one of my jobs.

One of the many reasons we say that incentives matter is because you are likely to do a much better job when you stand to gain more, or lose more, because of the quality of the job you do. If the money you get is directly linked to how well received your product/service is in the market, you are likely to do a better job.

Want a real life example of what I mean? Ask the next twenty people you meet if they have a BSNL/MTNL sim-card.

As Nicholas Nassim Taleb says, having skin in the game really, really matters.

Joe Studwell, in his book How Asia Works, tells us the story of the Stevenson Restriction Scheme, which is where I read about it first.

When the restrictions were announced, instead of being happy about perhaps getting higher prices as a consequence of restricted supply, there was near rebellion in British ruled Malaysia. Upon investigating the matter, an embarrassed government found out that Malay rubber plantation owners, in spite of working on far smaller farms with much lesser equipment, produced up to thrice as much as British plantation owners.

How? Well, they had skin in the game.

It was their plantation.

They had property rights.

Google tells us that the etymology of the word property comes from Latin, via Old French, and it means “one’s own”.

And if we, as students of economics are going to say that trade matters – and hell yes, it does – then we need to have something to trade, which means we need to own that which we sell, and which is why for economics to exist, property rights need to exist.

Except they don’t. Well, that’s wrong: they do, but they’re not fundamental, and it’s complicated.

Fundamental rights are those rights which are essential for intellectual, moral and spiritual development of individuals.

That’s the very first sentence from the Wikipedia article on Fundamental Rights in India.

There are, the article goes on to say, six fundamental rights:

  1. The Right to Equality
  2. The Right to Freedom
  3. The Right Against Exploitation
  4. The Right to Freedom of Religion
  5. Cultural and Educational Rights
  6. Right to Constitutional Remedies

Property rights, as it turns out, isn’t a fundamental right. It was, at one point of time, a fundamental right as per the Indian Constitution, but not as of today. As I said, its complicated.

LSE-trained socialist professor KT Shah sent a detailed note demanding abolition of all property rights, and provided no protection from takings. Shah wrote: “The Union of India shall be free and entitled to acquire any private property held by any private individual or corporation as may be authorized or permitted under the law.” At the other end of the spectrum was the liberal lawyer KM Munshi, a strong advocate of constitutional protection of property rights and limited government. Munshi suggested a Madisonian takings clause inspired by the American Bill of Rights, which placed significant restrictions on the ability of the government to take property. Somewhere in the middle were members like Ambedkar and Ayyar, who attempted to find a balance between individual rights guaranteed by the constitution against a passion of the government to pursue socialist welfare policies.

That excerpt is from the third essay in an eight part series written by Shruti Rajagopalan for Think Pragati, and all essays are worth repeated readings. Each of them deal with the evolution of property rights in India.

We had to choose, back then, if we wanted to have, or not have, the concept of property rights. If we had to have the concept of property rights, to what extent? Was it a fundamental right, or not? If it wasn’t to be a fundamental right, but was to be a right nonetheless, how should it be framed? The third essay in the series lays bare all of the debates that went into the making of Article 31 of the Constitution. Articles 12 to 35 make up part III of the Constitution. It is this section that speaks of our Fundamental Rights as Indian citizens, and so, in 1947, it was the case that the Right to Property was in fact a Fundamental Right.

But then came the First Amendment, which in effect changed our Fundamental Rights. Especially relevant to us, the following:

The Parliament of India noted that validity of agrarian reform measures passed by the State Legislatures had, in spite of the provisions of clauses (4) and (6) of article 31, formed the subject-matter of dilatory litigation, as a result of which the implementation of these important measures, affecting large numbers of people, had been held up. Accordingly, a new article 31A was introduced with retrospective effect to uphold such measures. Further, another new article 31B was introduced to validate 13 enactments relating to zamindari abolition.

If the Right to Property was fundamental, then you couldn’t take away the titles to land from those who owned them. How then to abolish zamindari and institutionalize meaningful land reform? And abolishing zamindari was seen as (and in my opinion largely was) a desirable thing.

By the way, without meaningful and reform, things simply don’t take off for a country is one of the fundamental lessons of How Asia Works:

Developing countries are not just little ships blown about on the developmental ocean by the winds of rich states. In agriculture they have a greater capacity to chart their own course than in any other sector of the economy because land policy is entirely a domestic affair. In this respect, land policy is the acid test of the government of a poor country. It measures the extent to which leaders are in touch with the bulk of their population – farmers – and the extent to which they are willing to shake up society to produce positive developmental outcomes. In short, land policy tells you how much the leaders know and care about their populations. On both counts, north-east Asian leaders scored far better than south-east Asian ones, and this goes a long way to explaining why their countries are richer.

These weren’t easy decisions to make. But, all that being said, there was some political maneuvering involved too:

The episode of the Provisional Parliament enacting the First Amendment deserves detailed analysis that has been overlooked by historians and legal scholars. First, it shows that there was a severe failure in terms of post-constitutional credible commitment. The Provisional Parliament was a little too eager to amend the takings provision and dilute the protection to the right to property. Political exigencies trumped constitutional principles. While this is expected to some extent by all legislatures, it is a shame that the provisional parliament, which was essentially the same individuals as constituent assembly in a different role, made this hasty move. It also goes to show that incentives matter. The members of the provisional parliament now faced different incentives in the post-constitutional world, where they had to contest elections. Populism must necessarily trump principle.

So, for reasons outlined above, the right to property was now Fundamental – except it really wasn’t, not quite.

Have you ever been on a diet, and resolved to not cheat, but ended up cheating just a little bit? And then thought to yourself, well, now that I’ve cheated, may as well cheat a little more – and found yourself an hour later with a recently emptied tub of ice-cream? Or savings that you resolved never to touch, except in case of emergencies, and then took out a little bit… you can see where I am going with this.

Well, so also with the Right to Property.

The First Amendment led, as Shruti Rajagopalan’s series informs us in painstaking but entertaining detail, away from the sacrosanct nature of Fundamental Rights. Then followed further modifications to laws pertaining to the right to property. If I understand the subject correctly, of particular concern were the twenty-fifth and the forty-fourth amendment.

Which brings us, ultimately, to Article 300A, which has replaced Article 31.

The most important thing to note about Article 300A? It is not a Fundamental Right. And it has created problems: cronyism and ineffectual land reform being just two of them.

Can India go back to having the Right to Property as a Fundamental Right? More than the legal hurdles, of which there would seem to be plenty, the biggest barrier is likely to be a lack of political appetite for such a reform.

The revival of the right to property has attracted relatively little attention in political and legal circles. Political rhetoric over property is much more muted than in earlier periods, partly because none of the leading parties have called for the redistribution of land or the nationalisation of key industries in recent years. Indeed, there has been some commentary calling for reversal of the Forty-Fourth Amendment, even though the right to property as it stood immediately before the Amendment was weaker than the right that has been constructed from Article 300A (and Article 14). The Amendment has even been the subject of public interest litigation: in Sanjiv Kumar Agarwal v. Union of India, the Supreme Court dismissed a petition for a declaration the Amendment’s repeal of the right to property was contrary to the basic structure. This was noted in the press, along with the Court’s recent declarations that property is a human right.

But assuming we can, should we? Niranjan Rajadhakshya says yes, and I wholeheartedly agree:

It is the poor who have the biggest reason to cheer a reinstated fundamental right to property. There are two reasons for this. First, the poor have neither the legal resources nor the political heft to fight laws or administrative orders that allow governments take over their land. Second, the poor do not have enough opportunities to make a living in formal jobs in case they are forcibly separated from their property. It is important to reiterate that the most resonant battles for property rights over the past decade have been fought by the poor rather than the rich. The showdown in Singur a few years ago is a useful case in point.

It is, to my mind, quite simple: economics means trade. Trade necessarily means ownership. And ownership necessarily means property rights. To the extent that one thinks trade is indispensable, property rights need to be fundamental.

And in India, they aren’t.

On India’s Constitution, Part II

I fear I have taken on more than I can handle, by starting the process of teaching myself more about India’s Constitution.

I started in the previous month with what I thought would be a rather more simple question: how did the constitution start off? What were its founding principles, its aims, its intentions? Why were these the principles, aims and intentions?

Well, if this is indeed a rather more simple question, I fear many more Mondays in the months years to come will be devoted to the entire task I have set myself: to learn more about India’s constitution.

But hey, the one thing we have is time!

So allow me to indulge myself, and devote one more Monday to the topic we covered in January 2020: understand better the founding of the Indian constitution, before moving on to other topics related to it.

I’d recommend you begin by watching this video of a speech given by Rohinton Nariman in the year 2013. It is nearly fifty minutes long, but all of those fifty minutes are worth your time. In my case, I ended up watching it twice, and if only I had time, I would watch it again. It raises many, many questions that make me want to learn more – and that is a good thing.

Here are just five things that I wanted to learn more about:

  1. B.N. Rau and the travels that he undertook before writing the Constitution,
  2. The city of Danzig and the freedom of movement
  3. The (to me, frankly amazing) right to property and its understanding and implementation in an Indian context
  4. Dr. Ambedkar’s opinion about having no axe to grind as a member of the constituent assembly. It is a great way to start thinking about public choice theory, if you ask me
  5. And how difficult the United States of America and even more so, Australia, have made the process for amending the constitution.

And believe me, I have cherry picked these five, more or less at random. There’s so much more to think about!

Second, in the post I wrote in January, I spoke about wishing I could learn more about how the constituent assembly was formed. Reading this article helped me understand that the people who wrote the constitution (the members of the constituent assembly) also were the people who ratified it!

An even more important point to note is that the Constituent Assembly was deeply involved in the drafting the Constitution itself. It met over 11 sessions and 166 days between 1947 and 1950 to discuss the Constitution. In contrast, in the US, there was a very clear separation between the drafting of the Constitution (done by the Philadelphia convention – a central body with representation from each state), and the state-level ratification conventions, which voted on it later.

This separation meant that the ratifiers did not have their hands dirty in the document, with the exception of a small minority of members who were a common presence in both conventions. They had no emotional stake in the Constitution draft and could vote on it independently. It was up to the drafters of the Constitution to convince them of this document. This is what necessitated the “Federalist Papers” – a remarkable exercise in marketing the newly proposed law of the land.

No such marketing was required in India, given that the ratifiers were the drafters too.

Useful more for trivia buffs (and I enthusiastically plead guilty to the charge) than perhaps for the topic at hand, but an informative read nonetheless is this rather long article in Scroll. On the history of constitutionalism in India:

Knowing only too well that Englishmen only counted as knowledge what Englishmen declared to be so, when Rao wrote to Napier in March 1872 to decline the seat on the Viceregal Council, he appended the relevant sections from Bowring’s Eastern Experiences, adding that nothing could be more interesting than participating in the development of “something like a constitution” wherein “a Native Administration” might be brought under “a system of fundamental principles, derived from the advanced political wisdom of Europe” albeit “carefully adapted to the conditions of the Native society”.

I am somewhat ashamed to note that it took my reading of this article to know what I should have been aware of in any case, given that I teach at the Gokhale Institute of Politics and Economics:

The most vocal was Rao’s sometime protégé and collaborator, Mahadev Ranade, whose essay, “A Constitution for Native States”, which was published in the Quarterly Journal of the Poona Sarvajanik Sabha, generated much debate and discussion. It eventually prompted a series of remarkable works detailing indigenous forms of constitutionalism.

The most prominent of these works was Kashinath Telang and Ranade’s Rise of the Maratha Power, which carefully explained how much Shivaji’s success owed to the ‘constitutional’ nature of his rule (and concomitantly, how much Maratha decline owed to Shivaji’s descendants departing from such constitutional rule).

And finally, two book recommendations, with the caveat that I myself have as yet not read either. They’re both by the same author, who is currently coordinating with the Hindustan Times to publish a series on the same topic that I am writing about on these pages:

The two books are India’s Founding Moment, and  The Indian Constitution (Oxford India Short Introductions Series). As I said, I haven’t read them myself, but did purchase them today. Why then do I recommend them? Well, one, the relevance to the topic is obvious, but also, this article from Livemint a long time ago really helped.


The Constitution is inevitably shaped by and shapes politics. How it does so is a question far too ambitious for my book. But something I do try to gently do, wherever I could, is suggest how certain legal decisions were shaped by the political circumstances as well as how our overemphasis on politics has prevented us from appreciating the legal significance of particular aspects of our Constitutional law.

The good news, for me, is that I get a month to try and read these two books before I tackle the subject of the Indian Constitution once again.

Once again, a tip of the hat by way of thanks to Murali Neelakantan for helpful recommendations, and a request to my readers to help out along similar lines.

What exactly is a constitution?

I searched for the simplest video I could find on what exactly a constitution is, and why a country needs one. This is what I could come up with.

Is there a video you know of that does a better job? Let me know!

And once again, a very happy Republic Day to you!

India: Understanding our Constitution a little bit better

In less than a week, we celebrate our Republic Day.

But what exactly is a republic? How is it different from a democracy – which begs the question, what is a democracy?

One of the definitions of democracy, given by Google, is this: “control of an organization or group by the majority of its members.”.

Or, as children in India have been saying for years at around 5.30 in the evening, “majority wins” (Extra points for reading this in that wonderfully evocative sing-song cadence.) But hey, there’s so much more to it than that!

So what is a republic? Once again, Google to the rescue: “a state in which supreme power is held by the people and their elected representatives, and which has an elected or nominated president rather than a monarch.”

So when we celebrate Republic Day, we’re really celebrating the fact that we’re not ruled by a monarch anymore, but rather by ourselves. Except that we elect some people to do the job for us.

So when we appoint somebody, what powers do we give them? What powers do we not give them? Do we give them the power to change the powers that we give them – if you see what I mean?

That is where the constitution comes in. Again, our old pal Google: “a body of fundamental principles or established precedents according to which a state or other organization is acknowledged to be governed.”

The Constitution, sets the maryadas of the government in power. This you can and should do, this, uh, not so much. That, not at all. The Constitution does so much more than that, but that is certainly one of its main purposes.

Which begs the question: who came up with the idea of constitutions? Who, in India’s specific case, was appointed to write India’s Constitution? On what basis? What were their ideas and motivating principles? And that is the direction in which today’s post will go.

Disclaimer: I don’t pretend to be anywhere near an expert on this topic. This is on the basis of stuff I have been reading in order to teach myself. If you have links to share that will broaden my understanding of this topic, please do share.

Many thanks to Murali Neelakantan for providing a ton of helpful suggestions!

  1. “To understand the first conceptualisation, that of constitution-as-function, we should clarify what scholars view to be the traditional purposes of constitutions. A central idea here is the limitation of government power. Constitutions generate a set of inviolable principles and more specific provisions to which future law and government activity more generally must conform. This function, commonly termed constitutionalism, is vital to the functioning of democracy. Without a commitment to higher law, the state can operate for the short-term benefit of those in power or the current majority. Those who find themselves out of power may find that they are virtually unprotected, which in turn may make them more likely to resort to extra-constitutional means of securing power. By limiting the scope of government and precommitting politicians to respect certain limits, constitutions make government possible.”
    That’s the whole maryada angle we were talking about earlier. That is from the UCL website, and the website is worth a detailed look.
  2. So if the idea of the Constitution is to, in this case, set up the framework for the operation of the government, that makes it pretty darn important. Who did we give the job to, and how?
    “”India was still under British rule when the Constituent Assembly was established following negotiations between Indian leaders and members of the 1946 Cabinet Mission to India from the United Kingdom. Provincial assembly elections were held in mid 1946. Constituent Assembly members were elected indirectly by members of the newly elected provincial assemblies, and initially included representatives for those provinces that formed part of Pakistan (some of which are now in Bangladesh). The Constituent Assembly had 299 representatives, including fifteen women.”
    Note that we didn’t really give the job to anybody. There were provincial assembly elections, and the Constituent Assembly members were elected indirectly by members of these provincial assemblies. But that may be a good thing! As Vijay Kelkar and Ajay Shah note in their recent book, In The Service Of The Republic: “The Constitution of India my not have won a referendum either in 1950 or today.” (Emphasis added).
    I really wish we had the time to explore this question in more detail: who frames the rules by which we agree to live as a country, and on what basis. But I promise to get to it in later posts. For the moment, we move on.
  3. “(1) This Constituent Assembly declares its firm and solemn resolve to proclaim India as an Independent Sovereign Republic and to draw up for her future governance a Constitution;(2) WHEREIN the territories that now comprise British India, the territories that now form the Indian States, and such other parts of India as are outside British India and the States as well as such other territories as are willing to be constituted into the Independent Sovereign India, shall be a Union of them all; and

    (3) WHEREIN the said territories, whether with their present boundaries or with such others as may be determined by the Constituent Assembly and thereafter according to the Law of the Constitution, shall possess and retain the status of autonomous Units, together with residuary powers, and exercise all powers and functions of government and administration, save and except such powers and functions as are vested in or assigned to the Union, or as are inherent or implied in the Union or resulting therefrom; and

    (4) WHEREIN all power and authority of the Sovereign Independent India, its constituent parts and organs of government, are derived from the people; and

    (5) WHEREIN shall be guaranteed and secured to all the people of India justice, social, economic and political; equality of status, of opportunity, and before the law; freedom of thought, expression, belief, faith worship, vocation, association and action, subject to law and public morality; and

    (6) WHEREIN adequate safeguards shall be provided for minorities, backward and tribal areas, and depressed and other backward classes; and

    (7) WHEREBY shall be maintained the integrity of the territory of the Republic and its sovereign rights on land, sea, and air according to Justice and the law of civilised nations, and

    (8) this ancient land attains its rightful and honoured place in the world and make its full and willing contribution to the promotion of world peace and the welfare of mankind.”
    This is the famous Objectives Resolution, put forth by Jawaharlal Nehru on the 13th of December, 1946, in one of the first few (the very first?) meetings of the Constituent Assembly. (5) and (6), to me, are the most crucial parts of the resolution. If the question is, what were the aims and aspirations of the members of the Constituent Assembly in terms of what they hoped the Constitution would achieve, this is the best answer I could find.

  4. “It was here that the enduring distinction between “justiciable” and “non-justiciable” rights (Directive Principles) was first mooted, much to the consternation of K.T. Shah. It was in the Sub-Committee that Minoo Masani, Hansa Mehta and Rajkumari Amrit Kaur argued strongly for a right to inter-religious marriages and to a uniform civil code (with Ambedkar’s support), but were voted down. It was in the Advisory Committee that the right to privacy (secrecy of correspondence and prohibition of unreasonable searches and seizures) was dropped from the draft bill of rights, as was the right to vote. Here you find Ambedkar’s eloquent arguments for the link between constitutional rights and the economic structure, and K.T. Shah’s radical proposals to make remuneration for housework a fundamental right. In short, endlessly fascinating stuff.”
    All of that comes from Gautam Bhatia’s blog, written in collaboration with Vasudev Devadasan. The blog is worth subscribing to, and reading this post (part 1 of 3, no less) makes me want to burrow into this topic for a long time to come. Alas, accursed economics!
  5. And finally, from a column written in 2018 by Gautam Bhatia, this excerpt – but do read the whole thing!
    “In hearing and deciding these cases, the court has an opportunity to affirm the words of one of its greatest civil rights judges, Justice Vivian Bose, who recognised the deeply transformative character of the Constitution when he said: “Is not the sanctity of the individual recognised and emphasised again and again? Is not our Constitution in violent contrast to those of states where the state is everything and the individual but a slave or a serf to serve the will of those who for the time being wield almost absolute power?” How India Became Democratic helps us to understand that the answer to both those questions is an unambiguous “yes.””


It shames me to realize how little I know about India’s constitution, and the history of that constitution. We live by a set of rules whose origins, aims and framers are largely unknown to most of us. This post was my attempt to begin to change my own status quo, and I hope to dedicate at least one Monday a month to writing a post that helps me learn more about the Indian Constitution.

And on that aspirational note, a very happy Republic Day to you all!

India: Links for 16th December, 2019

  1. “Farmers cultivating perishable crops suffer more in times like these. The harvest is destroyed quickly due to unseasonal rains, and what survives has to be sold off without any delay. like fenugreek, that cost Rs 8, Rs 7 and Rs 13 respectively at Nashik market cost about Rs 30, Rs 15 and Rs 30 respectively at the typical vendor’s stall in Matunga. Cabbage goes up to Rs 70 per kilo from Rs 8 per kilo in a span of 300 km. Eggplant, following a similar trajectory, is pegged at Rs 80 per kilo in Mumbai, while even at Vashi, it is sold at Rs 15 per kilo.”
    I wish it had been written (and edited) better, but that being said, it is still an interesting, informative read about the supply chain in agriculture.
  2. “if the Assembly had been elected on the basis of universal suffrage it would not necessarily have “possess[ed] greater wisdom…”. Indeed, “It might easily have been worse…I am quite frank enough to say that this House, such as it is, has probably a greater modicum and quantum of knowledge and information than the future Parliament is likely to have.” Despite being an ardent backer of universal franchise and (limited) reservations, Ambedkar expressed unease throughout the life of the Constituent Assembly about what would happen to the quality of the country’s democratic institutions once all Indians were allowed to participate.”
    This might be behind a paywall, and if so, my apologies. But even the excerpt above is worth spending some time over. Dr. Ambedkar on the Constitution of India. That is from an essay in the Caravan magazine.
  3. I find myself unable to excerpt form this article, I am not quite sure why – but the entire thing is worth a read, particularly if you are not familiar with the politics of CAB in the North-East.
  4. “Much of the decline in the overall LFPR is because of a steep fall in the female LFPR, from 43 per cent in 2004-05 to a pathetic 23 per cent in 2017-18. This compares poorly with female LFPRs (in 2018) of 61 per cent in China, 52 per cent in Indonesia and 36 per cent in Bangladesh. Nor can this precipitous decline in female LFPR be explained away by higher rates of female enrolment in education, since the 20 percentage point drop in LFPR is observed among both the 30+ age group (down from 46 per cent to 27 per cent) and female youth (down from 37 per cent to a heartbreakingly low 16 per cent). The current and future implications for overall female economic and social empowerment are deeply saddening.”
    Two articles by Shankar Acharya in the Business Standard next. One on the employment crisis in India
  5. “The chart shows that between 2011 and 2018, India’s goods exports increased by only 8 per cent. In sharp contrast, Vietnam’s exports grew by 154 per cent, Cambodia’s by 114 per cent, Myanmar’s by 82 per cent, Bangladesh’s by 61 per cent, the Philippines’ by 40 per cent, and China’s by 31 per cent. Rapid export growth is all about increasing market share. Between 2011 and 2018, our share of world exports stagnated at 1.7 per cent, while Vietnam’s share more than doubled, Myanmar’s increased by 80 per cent, Bangladesh’s by more than 50 per cent, the Philippines’ by 27 per cent, and even giant China’s by over 20 per cent despite trade wars. China’s share of world exports increased by 2.4 percentage points over the seven years, which is 60 per cent more than India’s total share in 2018!”
    And the second, in which he debunks the notion that the slowdown in India is because of the slowdown in global trade.

India: Links for 29th July, 2019

Five links from the time of India’s independence, to help me remind myself of what was going on then. This series will get more structured over the coming weeks…


  1. What made India India in terms of its rules? An article that sheds some light on the Constituent Assembly.
  2. And in the same vein, a short history of the men who made it possible. By the way, if any of you have any articles about this topic that you could send my way, I would be most grateful.
  3. When Bengal burned.
  4. Operation Polo, or how Hyderabad became a part of India.
  5. What India’s economic policies might have looked like.