Rationalization of the Sindh Land Revenue System From Radio Pakistan, Hyderabad, September 5, 1961
Last year, while speaking to you about the over-all progress of this region, I had made a mention of the land revenue assessment operative in this region, the agitation of the people against its iniquitous rates, and my efforts for a fair and just determination of this question.
It is admitted on all hands that the land revenue assessment in this region has been very high but there were valid reasons for it. In certain circumstances, a people are called upon to make sacrifices for a specific purpose. Heavy taxation is one such effective and classical form of a people’s sacrifice for a cause. Exceptional circumstances were responsible for the abnormally high incidence of land revenue assessment in the former province of Sindh. The rate of land revenue assessment was inextricably linked with the demand for separation of Sindh from Bombay Presidency.
Sindh was conquered by Sir Charles Napier in 1843. In the first few years of the conquest, the province was placed under a separate Governor but soon after the resignation of the first Governor, Sir Charles Napier, Sindh was annexed to Bombay Presidency. Sindh’s connection with Bombay was as unnatural as it was unbearable. The Bombay Government, which enjoyed powerful influence with the Central Government at Delhi and directly with the Secretary of State for India, contended that Sindh could not sustain itself financially as a separate province. Unless, therefore. Sindh showed its financial viability it could not make out a case for separation. At the Round Table Conference, the two representatives from Sindh, Sir Shah Nawaz Khan Bhutto and Sir Ghulam Hussain Hidayatullah forcefully advocated the separation of Sindh from Bombay Presidency, and the Russel Sub-Committee of that Conference accepted the principle of separation with the proviso that Sindh should demonstrate that it could successfully stand on its legs. The records of the Round Table Conference dated 17th July, 1933 state at page 2095 that an assurance was given by Sir Shah Nawaz Khan Bhutto, His Highness the Agha Khan and Mr. M. A. Jinnah at the Russel Sub-Committee that subvention to a separated Sindh was definitely ruled out…Sir Shah Nawaz Khan Bhutto said: “Sindh must stand on its own legs and we do not want any financial help. If we are not able to support ourselves, how can we ask for separation?” The Quaid-i-Azam, Mr. Mohamed Ali Jinnah, said “It is for the representatives of the proposed new province to show how the deficit should be met by taxing themselves.” The chairman of the sub-committee, the late Earl Russel, observed: “I will tell you what the recommendation of the sub-committee is: It is that if Sindh cannot show that it can stand successfully on its own legs then separation does not take place.”
It was, therefore, absolutely imperative for Sindh to make the necessary sacrifices to be able to become financially self-sufficient. As there was no other source of income, the newly constructed Lloyd Barrage had to come to the rescue. The lands that were to be commanded by it had to be heavily taxed. There was no other alternative. Sindh had the choice of either remaining in bondage to Bombay or of becoming a separate entity by facing heavy taxation. It was under these circumstances that the sliding scale formula was evolved and the incidence of land revenue assessment enhanced. The Barrage debt was paid much sooner than expected and Sindh became a surplus instead of a deficit province.
The system operative was and is of the sliding scale formula. This comprised two categories—one for the Barrage areas and the other for the non-Barrage areas. The rates of this assessment vary with the rise and fall in the prices except in the non-Barrage areas where an upper limit was laid down.
The last land revenue settlement for this region was made in 1943. It was to last for a period of ten years and a fresh revenue settlement had to be carried out in 1953. This was the time when Sindh existed as a separate province, but the provincial governments paid little attention to this vital question. In addition to the fact that the revision was necessitated by the expiry of the period for which the previous settlement was guaranteed, the revision had become essential because of increase in prices, deterioration in the quality of the land, the menace of water logging and salinity, and of stem borer in the case of rice, and a host of other factors.
The basis for this revision gained strength in the year 1955 when the province of West Pakistan came to be established. It was, therefore, absolutely essential to have, throughout the province, a unified system and an identical pattern of land revenue assessment. In pursuance of the realization of the objectives which had prompted the establishment of One Unit, the provincial governments should have given foremost consideration to this question but they did not.
This Government has been conscious of the fact that the incidence of taxation is generally determined by the ability of the tax-payer to bear the tax, otherwise, in the long run, political and economic upheavel follows. It has been said the fall of the Roman Empire was, in great part, due to an iniquitous and irrational system of taxation. Some historians contend that perhaps the union between England and the United States may have been more lasting or developed into a Commonwealth relationship had it not been for the agitation against the form of taxation. More than for political reasons, it is economically prudent to follow this principle. People lose the incentive to invest and to develop the economic life of a country if they are sapped by unbearable taxes.
As a member of the Cabinet, hailing from this region and having intimate personal knowledge of the problem, I have been devoting considerable attention to the task of securing a just and equitable settlement of this vital question. In view of the complex character of this problem, it’s just determination had to be tackled in stages. The first major step taken in this direction was the bifurcation of the water charges (abiana) from the land revenue. This was done under Ordinance No. IV of 1959. While promulgating this Ordinance it was decided to keep the following principles in view:
a) That the total burden of assessment of land revenue and water rate should not exceed the composite charge as levied before bifurcation.
b) That the land revenue assessment should be revised in accordance with the Sindh sliding system on the basis of the present crop yield instead of the yield determined at the time of settlement.
c) That if any increase has to be made in the total burden it should be on the non-sliding scale cash crops.
The second important step taken for affording relief to the ‘abadkars’ (settlers) of this region was the suspension of the development cess.
The third major step was taken at the high-level conference convened in Hyderabad on the 31st of July. I had placed before the conference the point of view of the ‘abadkars’ of this region. I am glad to say that a decision was taken to reduce the land revenue assessment by 25 percent. All these measures have brought relief and succor to the peasant.
It is very difficult for any Government, especially for one determined to stride ahead economically, to impose a cut in its revenues. Notwithstanding this, to right a long-standing wrong, we have taken the courageous decision to effect this substantial reduction in the land revenue assessment in this region.
As I have said earlier, the problem of unification and rationalization of the land revenue system is a very complicated problem and, before any final and firm decision can be taken, it requires a thorough examination by experts. The major disparities are being bridged, but in some cases the differences are linked with age-old traditions and practices. Some very material aspects, such as the history of the tract, general economic condition of the tract, the trend of prices, proximity of markets, means of communication and ordinary expenses borne by zamindars have to be examined and considered thoroughly.