The study examines the trends and dynamics of annual shifts among different land use classes in Indian States which may have adverse implica­ tions for agricultural growth and ecological balance. A general declining trend was observed in the area under permanent pastures and grazing lands and barren and unculturable lands. The area under non-agricultural uses, cultivable wastes and fallow showed a positive growth in most of the States. Jntersectoral land budgeting revealed that area sh'fts are occuring from both desirable and undesirable ecology sectors towards agricultural as well as non-agricultural sectors. Further, the study identifies the operation of vicious circle of land use dynamics within agricultural sector.