INSTITUTIONAL REFORMS AND AGRICULTURAL GROWTH 5 m the post-independence era, even after the abolition of the land revenue collection rights of the intermediaries in the fifties of this century (in the name of land reforms), there has hardly been any fundamental change in the 'production relations' in the rural belt of India and the rural oligarchy of the semi-feudal set-up remains inimical to rapid overall development.5 These reforms were initia^d in the mid-fifties and were completed by the end of the decade. This gave the rural oligarchy a temporary set-back. But by the early seventies it consolidated its position. It is evident that in India the two important modes of appropriation of surplus even to-day are Marxian ground rent and usury. Indian agriculture is still predominantly pre-capitalist. By capitalist mode of production we understand, at the risk of being accused of oversimplification, a situation characterised by "commodity production" and "free labour". Marx very clearly elaborated this when he said "that two very different kinds of commodity-possessors must come face to face and into contact ; on the one hand, the owners of money, means of production, means of subsistence, who are eager to increase the sum of values they possess, by buying other people's labour-power; on the other hand, free labourers, the sellers of their own labour-power, and therefore the sellers of labour. Free labourers, in the double sense that neither they themselves form part and parcel of the means of production, as in the case of slaves, bondsmen, nor do the means of production belong to them, as in the case of peasant-proprietors ; they are, therefore, free from, unencumbered by, any means of production of their own. With this polarisation of the mar-ket for commodities, the fundamental conditions of capitalist production are given. The capitalist system pre-supposes the complete separation of the labourers from all property in the means by which they can realise their labour. As soon as capitalist production is once on its own legs, it not only maintains this separation, but reproduces it on a continually extending scale The process, therefore, that clears the way for the capitalist system, can be none other than the process which takes away from the labourer the possession of his means of production ; a process that transforms, on the one hand, the social means of subsistence and of production into capital, on the other, the immediate producers into wage labourers.9'6 It is evident from this that in a capitalist mode of production, in its purest form, the surplus value is appropriated from direct producers through the labour process alone. The rent, interest and profits which exist therein, are the modes of sharing of surplus and not of appropriation of surplus from the direct producers. Hov^ever, this purest form of capitalist mode of production does not conform to the actual conditions even in the most advanced capitalist countries. Time never completely erases all the past institutions. Some institutions linger on for a considerable period of time. Therefore, while characterising any 'mode of production" or 'social formation9, one has to look at the dominant features of the production relations and its historical