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Home/Practice questions/Economics
EconomicsIndian Economic Development: Indian Economy:1950-1990

Why do tenants lack incentives to make improvements on land?

Why do tenants lack incentives to make improvements on land?
Answer & explanation+

Correct answer: option 2

The correct answer is Option (2) → The landowners benefit more from higher output.

A tenant works land owned by someone else. If output rises, the landowner gains more, so the tenant has little reason to improve the land.

This is why the policy of land to the tiller made cultivators the owners: an owner keeps the profit from higher output.

NCERT (2026-27): “Box 2.5: Ownership and Incentives The policy of ‘land to the tiller’ is based on the idea that the cultivators will take more interest — they will have more incentive — in increasing output if they are the owners of the land. This is because ownership of land enables the tiller to make profit from the increased output. Tenants do not have the incentive to make improvements on land since it is the landowner who would benefit more from higher output. …”

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