LAND REFORMS IN INDIA- DONE WITH AND THE UNFINISHED AGENDA

LAND REFORMS IN INDIA

DONE WITH AND THE UNFINISHED AGENDA

SUBHASH CHANDRA GARG

Economy, Finance and Fiscal Policy Strategy; Also, former Finance and Economic Affairs Secretary, Government of India

Prime Minister, in his address to the nation, on 12^th May, spoke about reforms of land, labour, liquidity and laws. Finance Minister was to spell out specific reform proposals. She proposed three reforms- agriculture produce marketing law, essential commodities law and another law for quality assurance in agriculture produce. However, land reforms agenda has not been spelt out as yet.

Total built up area- factories, roads, buildings- represent land used by non-agriculture economy. Based on satellite surveys carried out of the entire Indian land mass, total area occupied by buildings, land and railways, which covered all the built-up area was only 2.04 million hectares in 2010. It is less than 1% of the land mass of India. Agriculture Ministry reports about 25 million hectares as ‘area under non-agricultural uses’; however, this definition covers lands under rivers, water bodies, parks, social forestry and so on. Agriculture occupies about 140 million hectares- about 45% of reporting land area.

Agriculture, mining and other directly land based productive activities contribute only 20% of GDP of India. The rest of the economy, which uses 1% of land mass, contributes 80% of the GDP. Productivity of land use in non-agriculture and agriculture is 200:1.

India at Independence- A Poor Populous Country with Low Per Capita Land

India, at independence, was basically an agrarian economy with more than 60% output generated in agriculture and more than 80% people dependent on agriculture for their livelihood. It was also a poor country with more than 80% people living below the poverty line. Agriculture was the principal source of government revenue and land the main productive asset. The landowners made up India’s the wealthy class. Peasants tilled the land but lived in poverty.

Indian population was 360 million strong in 1951. Net land area sown in 1951 was a little less than 120 million hectares out of total reporting area of about 305 million hectares. Indians had, on an average, only .85 hectare of land per capita in 1951. Compared to any other part of the world, Indian had a very small per capita availability of agriculture land. 

More than 82% (295 million out of total counted population of 357 million in 1951 census) Indians lived in rural areas. Census 1951 counted 104 million Indians as self-supporting- those who depended for their livelihood on income generated by themselves. About 70% self-supporting persons (71 million) derived their income from cultivation of land. Land was the principal source of livelihood for about 75% Indian households.

Real gross value added at factor cost in agriculture, forestry, mining, and quarrying at current prices was Rs. 5274 crores (53% of total Gross Value Added of Rs. 10036 crores. Per capita income of 295 million people living in rural areas in 1950-51 was only about Rs. 180.  

Too many people living in rural area dependent upon land cultivation for their livelihood earning very low level of income was the root cause of India’s abject state of poverty at India’s independence. Poverty, malnutrition and disease was rampant in rural India.

India also inherited a highly lopsided distribution of land at independence. A great majority of people, the peasants, worked on the lands controlled by relatively fewer landlords. They earned pittance as wages and share in produce of their back breaking work. Much of the crop or proceeds of the crop went to landlords and the government as revenue. Too little per capita availability of land, also unevenly distributed, provided a fertile ground for creating sentiments of class injustice.

Land Reforms Imperative at Independence

There were four fundamentally disturbing situations as regards land and agriculture in British India and even when India became independent:

First, the Government, significantly dependent upon tax revenue from agriculture- the land revenue- was taxing poor farmers forcing a vast majority to live life of penury. It was universally felt that the land revenues have to be reduced drastically.  

Second, the Government collected land revenue mostly through intermediaries- the zamindars, who exploited peasants. Rich zamindars and poor peasants demonstrated stark inequality of India. This disturbed the conscience of everyone. There was widespread sympathy for abolition of zamindari system and establishing direct relationship with the state.

Third, while per capita availability of land was low, unequal ownership and possession of land made the matters worse socially. It was also widely felt that land was basic source of livelihood. This called for fairer redistribution of land.

Fourth, lot of peasants worked on others’ land as tenants. This called for conferring permanent tenurial titles on peasants.

Indian leadership decided to undertake three major land reforms:

First, confer ownership and tenancy rights in land to the tillers of the land;

Second, establish direct relationship between state and farmers by removing landlords and other intermediaries;

Third, ensure equitable distribution of agricultural land by imposing land ceilings and redistributing such acquired and government surplus lands to landless.

In addition, the land revenue was to cease as source of revenue for the governments. Instead, agriculture was to receive more and more subsidies from the governments.          

Land Reforms of Conferring ‘Ownership’ Rights on Tillers of Land and Abolition of Intermediaries Gets Mostly Completed in 1950s and 1960s

Two systems, defining relationships of the tiller with the State, were prevalent primarily in India at the time of independence.

First, the Zamindari System in which the intermediary- the Zamindar- had considerable ownership rights in land. The farmers had permission to till assigned lands and pay the tax to the Zamindar, who would in turn pay a part of it to the State. These farmers did not have either ownership or permanent tenancy in the land.

Second, under the system called ryotwari system, there was no formal intermediary; the farmer was in direct relationship with the State for tax payment. However, in practice, there were numerous intermediaries, acting under different authorities granted and assumed. The tenurial standing of the farmer was also not very clear and coded in laws.

States started enacting land tenancy laws in 1948. States also enacted zamindari abolition laws in 1950s. Almost all did so over a period of time. By 1960s, these seminal reforms got implemented fairly well in the country. The legislations abolishing zamindaris and intermediaries achieved a significant transformation of the countryside by enlarging the base of land ownership. Tenancy laws also succeeded in conferring permanent tenancy rights over the lands they tilled to the peasants.

As a result of the implementation of these laws, the ownership of nearly 40% of cultivable land was transferred to the direct producers. Further, under the tenancy laws nearly 12.4 million tenants obtained secured rights or ownership rights over an area of 6.16 million hectares (i.e. about 4.4% of cultivated area).

West Bengal went a step ahead. Share-cropping was a very common arrangement in rural India. The farmer would take land from the recorded land owner and pay a share of the produce to the owner- the share depending on several factors like who would provide inputs etc. West Bengal decided to convert share-cropper cultivators (called bargadars) into permanent tenants. Approximately 1.5 million bargadars were provided permanent tenancy in Operation Barga in West Bengal, which concluded sometime in 1980s.

India did see the end of Zamindari. India also witnessed tillers of land getting land recorded in their names and giving them the ownership title.

Land Revenue Stopped Being Source of Land Revenue

Land revenue was a major source of tax revenue in British India. British decided to settle the land revenue every 20/30 years. That is where the great settlement system began. Every settlement was likely to lead to increase in land revenue payable. Bardoli agitation was also the response to British Government decision to increase land revenue by 20-22% in 1920s when new settlement was taken up.

Post-independence, both land revenue and agriculture income tax were placed in the States’ list. Over the years, land revenues, in numerous forms in which it was collected, have been reduced to be made nominal and finally completely done away with. In some states, farmers protested total abolition of land revenue as payment of land revenue had become an evidence of the fact that the land continues to be in their names.

Almost no state levies agriculture income tax, except on plantations in some states. As land is primarily agricultural, whatever gets reflected under the land revenue head is largely the land conversion revenue which the states get on converting agriculture land into non-agriculture.

Land and agriculture incomes has stopped being a source of revenue for the governments.

Land Ceiling Reforms were not Successful: It Took 25 Years to Build ‘Consensus’ on Land Ceiling

Land redistribution by imposing ceiling on large landlords proved most contentious of the land reforms. There were too many vested interests. There were three key issues which bedevilled ceiling reforms- (a) what should the ceiling be, (b) whether to impose it on individual or family and if on family what should the definition of family be and (c) whether to pay compensation for acquiring land over ceiling and what that compensation should be.

In the pre-independence period, Congress took very conflicting policy stance on the issue of land ceilings. After independence, several Committees had to be appointed over 25 years, which examined the matter and made incoherent recommendations. Several states, in the meantime, enacted land ceiling legislations but with differing objectives and results.

The first major Committee, post-independence, the Congress Agrarian Reforms Committee appointed in 1947 with J. C. Kumarappa as Chairman, which comprehensive recommendations on the question of removal of intermediaries and conferring tenurial rights, did not even make any explicit recommendation on land ceilings.

The Planning Commission appointed Guljari Lal Nanda Panel on Land Reforms in May 1955. Nanda Panel recommended that the family should be taken as the operative unit in land. Panel defined family widely to consist of husband, wife and dependent sons and daughters and grandchildren. The Penal generously recommended exclusion of several categories of land holders from the ceiling- sugarcane farms owned by sugar factories, orchards, plantations, special farms such as cattle breeding, dairy farms etc., farms in compact block, efficient farms and mechanised farm and farms with heavy investment.

The Central Land Reforms Committee (CLRC), constituted in August 1971, recommended ‘family’ to include husband, wife and minor children only. CLRC also recommended an absolute ceiling for a family of five at 54 acres. It recommended withdrawal of exemptions in favour of mechanised farms, well managed farms etc.

A high-powered committee (HPC), which reviewed CLRC recommendations, disagreed with CLRC on the crucial issue of definition of family. The HPC was of the view that ceiling should be applied to the family of five as a unit, consisting of husband, wife and three children, whether major or minor. It recommended that if actual members in a family were less than five, the ceiling should be reduced by a fifth per person. A new recommendation made by the HPC proposed an allowance of 15% to be given to the landowner with land irrigated from private sources.

Diluted and Weaker Land Ceilings Got Implemented Finally But Poorly

The Government finally released its guidelines to the States on the question of ceiling in 1971-72.  The States enacted and aligned their land ceiling laws building with these Guidelines and new Constitutional mandate regarding compensation.

The Guidelines proposed that a ‘family holding’ may be considered from two aspects, namely (a) as an operational unit, and (b) as an area of land which can yield a certain average income. The States were delegated authority to decide whether the ceiling should apply to individual holdings or to holdings of families, and especially in the latter case, the basis on which the size of the family should be allowed in the application of the ceiling.

The States, in all, declared 2.7 million hectares land as surplus - the land found to be in excess of land ceiling. Out of this declared surplus land, 2.3 million (87%) hectares were taken possession of. Only 1.9 million hectares could be distributed to 5.5 million households.

The land ceiling issue was largely forgotten after 1980s. A Committee on Land Reforms appointed by the UPA Government in 2008 last reviewed the matter. This Committee quoted estimates made by IAS Academy, the LBSNAA, and placed the potential of ceiling surplus land at approximately 21 million hectares. It vigorously argued for taking up the land ceiling agenda again but the Committee’s report did not receive any consideration.

The Planning Commission captured the policy flip-flop in designing and implementing land reforms most poignantly. Its Task Force noted in its report in 1973- “in no sphere of public activity in our country since independence has the hiatus between the precept and practice, between policy-pronouncements and actual execution, been as great as in the domain of land reforms.”

A Sideshow- Urban Land Ceiling- was Badly Conceived, Failed but Left a Lot of Mess

Driven by misguided notion that urban land prices could be controlled by acquiring excess urban land and nobler objective of providing land for affordable housing, the Urban Land (Ceiling and Regulation) Act was enacted in 1976. Law provided for a specific ceiling limits for urban vacant land. The land in excess of ceiling was to be acquired by the state governments on payment of a meagre amount. A large number of exemptions were provided which was amenable to misuse.   

This law was repealed in 1999. About 50000 hectares of land got vested in state governments in about 20 years. Actual possession was taken for only 20000 hectares. Utilisation of land acquired for affordable housing was almost negligible.

This was a miserable failure. Urban land which was scarce in India became still scarcer. A vast corruption industry grew up in getting excess urban land exempted and handing over the excess lands in such manner that it defeated the purpose. 

Requisites of Modern Indian Economy

India graduated from an agriculture to a non-agriculture economy after industry was opened up in 1991. Non-agricultural economy has been expanding much faster than agriculture for five decades now.

Industry requires only a fraction of land to produce same amount of value addition. Still, land is scare for industrial purposes. It is not available where needed. Numerous restrictions apply on land use for industrial purposes. Services require still less land to produce equal amount of value addition. Service economy, however, runs on large infrastructure. It also requires lot of social infrastructure- houses, schools, hospitals and numerous other facilities. Urbanisation is the result of service economy.

Land is required for construction of infrastructure and urban facilities to meet housing and other requirements of the managers and workers of non-agricultural economy. A house becomes an aspirational asset which lot of non-agriculture economy people find worth making investment in. Infrastructure like roads, flyovers etc. are needed for post-agriculture economy.

Not more than 1% of Indian land mass is occupied by non-agriculture economic use, to produce over 80% of GDP and providing infrastructure and housing for living of more than 1/3^rd of Indian people. The productivity of land use in industry, infrastructure, services and urbanisation is 200 times the productivity in agriculture. It should be no brainer that we should liberally allow transfer of land from agriculture to non-agriculture use.

Essentially, there are five sets of land reforms issues which constitute India’s unfinished land reform agenda to usher India into an urban, industrial and largely service sector economy.

First, Creation of a National Land Record Registry.

Second, Abolition of all restrictions on agriculture land leasing and sale.

Third, Freely permissible conversion of agriculture land into non-agriculture use, subject only to environmental considerations.

Fourth, Purchase and Sale by free will to be the default mode of land transfer; acquisition under eminent domain only for exceptional situation. 

Five, Better management of Government lands; allotment or auction of government land encroached upon.

Creation of a National Land Record Registry

Land record system in the country has evolved over centuries essentially to record agriculture land. Our land record system does not recognise and record what non-agriculture use the land has been put to. The land record system was designed to assess and record the land revenue tax to be collected and collected from each land.

India is trying to digitise the land records for quite some time. Currently, a Programme named Digital India Land Records Modernisation Programme (DILRMP) is under implementation. The Record of Right has been completed in over 90% of villages and there are, in all, 291.10 million records of rights in the country.

There are three major deficiencies in the DILRMP. First, it computerises the record of rights as it exists in the states. There is no national template. There is no national or state registry of land records. Second, the record of right records essentially status of tenancy/ownership rights of the person over the surveyed plot of land. It is also a static record and assignment of different rights in the land- leasing, mortgage etc. are either not recorded or updated. Third, the record of rights is maintained basically for agricultural land and no record of rights for abadi plots are recorded anywhere.

Reforms in land record system are urgently called for. A National System of Land Records should be put in place. We should take up a 10- year Mission to complete all land records- agricultural, residential, businesses, housing, infrastructure- recording the type of activity the land is subject to, the ownership and other attributes. This National Register of Land Record should be managed by a Depository Institution and should record every transaction relating to ownership or rights in land. The Land Register should be publicly available for information.      

Reforms in Land Leasing Will Serve Interests of Both Lessor and Tenant

As self-cultivation was considered a nobler thing in the socialistic state of India and exploiting absentee landlord was the arch-typical villain, policy makers decided to outlaw agriculture land leasing in the country. Land leasing became illegal in most parts of the country under tenancy and land revenue laws.

Such statutory restrictions, however, could not overcome the real economy necessity of leasing lands. Land leasing is quite rampant. The land leasing restrictions have been relaxed in some states over the years. Andhra Pradesh passed- Andhra Pradesh Licenced Cultivators Act in 2011. Some other States brought contract farming through amendment in other laws. Yet, there are millions of landowners who still do not formally lease land.

NITI Aayog constituted an Expert Committee on Land Leasing in 2015. The Expert Committee documented the state of land leasing laws and restrictions in the country very well. The Committee recommended negating all the provisions in land laws of the states banning and restricting land leasing. The Committee also proposed a new Model Agricultural Land Leasing Act, 2016. The proposed Act protects legitimate interests of both lessor and lessee. The Committee also recommended a standard land leasing agreement.

The draft model law was circulated to States. A few States enacted laws to give effect to recommended model law. All these laws have however not come into effect as the Centre has not provided its concurrence to such laws. Apparently, the Department of Rural Development objected to the draft law.

Government appointed a Group of Ministers in November 2019 to go into the question of land leasing law again. It is not known what recommendations the GOM made. Finance Minister announced in her budget speech 2020-21 “We propose to encourage those State governments who undertake implementation of following model laws already issued by the Central government: a) Model Agriculture Land Leasing Act, 2016...” Nothing has been heard about progress made in this regard. This matter did not find mention in the reforms announced along with stimulus package.

The enactment of Model Agriculture Land Leasing Act is an absolute must for farmers’ welfare, growth of agriculture and Indian economy.

In fact, the scope of the law should be extended to allow leasing for non-agricultural purposes as well. The agricultural land taken under leasing arrangements should not be subject to agriculture ceiling laws. Leasing period should be left entirely at the will of the parties to the contract. Leasing can be for one crop or for 25 years, it should not matter to the State.

Free Conversion of Agriculture Land into Non-Agriculture Use

Agriculture yielded revenue to the state. Land was the tax base for collecting revenue from agriculture. The state went into very elaborate ‘settlement’ surveys of land to determine land revenue payable on each plot of land.

Agriculture land operates under severe restrictions. The biggest constraint is that it can be used only for agriculture purpose. Agriculture is a very low-income yielding business. As a result, asset value of land, as an agriculture property, is quite depressed.

Situation changes dramatically when agriculture land gets converted into non-agricultural land for several reasons. There is enormous demand supply gap of non-agricultural land as less than 1% of India’s landmass is available for use for all its residential, commercial, infrastructure and business needs. Incomes generated from non-agriculture use of land is also manifold as GDP produced per unit of land is at its minimum 200 times more for non-agriculture land than agriculture land.

Two major reasons motivate state governments to follow highly restrictive policies to convert lands from agriculture to non-agriculture use. First, there is a mistaken belief that there is shortage of agriculture land and it would hurt farmers if agriculture land is transferred to non-agriculture use. Second, the system has not figured out how to handle the big value jump the agriculture use land receives upon conversion in non-agriculture use. Unable to resolve these issues, the state governments have opted for no or very low conversion as a default policy. Rules for conversion are riddled with too much discretion with the conversion authorities. 

All these convoluted rules are a perfect recipe for inaction and corruption.

If India were to convert only 1-2% of its land mass into non-agriculture use, the entire demand supply would change. Non-agriculture use land would not be as costly as it is today. Industry, infrastructure and housing would become affordable and promote businesses and growth of the country. It would help farmers get little more money. Land availability for agriculture would not be affected at all.

The reform of land conversion regime is, therefore, absolutely justified. Conversion of agricultural land into non-agricultural use should be freely permitted. There should not be any requirement of a state officer passing a conversion order. In fact, the distinction that land is agricultural or non-agricultural should disappear. The environmental, health, safety and other legitimate common consideration are regulated by the laws which govern emissions. Pollution, safety etc. The land, whether called agricultural use or industrial use or infrastructure use would remain subject to these laws.

Sale Should be the Primary Mode; Compulsory Acquisition an Exception

For all practical purposes, the land ownership vests in the person recorded as tenant in the record of rights and is the private property of the landholder. Private property is normally transferable by sale and purchase contracts. Lot of agriculture land also gets purchased and sold by private contracts.

Normal system of free sale and purchase collapses in two situations. First, when the state needs land for public purpose. As it is generally difficult for state authorities to accept the price demanded by the seller or to determine right price in an accountable and objective manner, the State does not enter into purchase and sale contracts. Second, whenever private enterprises require large chunks of land for an industrial, infrastructure or residential project, getting past minority recalcitrant tenants becomes almost impossible.

As a result, larger procurement of land for non-agricultural purposes, has been made under the land acquisition laws. There was another real practical problem. Until converted for non-agriculture use, the agriculture land purchased remained agricultural. Agricultural land is subjected to ceilings. Ceilings were small. Consequently, industry or entrepreneur could not procure agriculture land by private purchase. Land Acquisition Act 1894 became the principal instrument of land acquisition for public and private projects in India post-independence. As development required good amount of agriculture land to be used for non-agriculture purposes, Land Acquisition Act, 1894 came to be used quite frequently.

Land Acquisition Act 1894, both in design and in operation, worked against the landholder farmer. Land could be acquired for almost any purpose as the ‘public purpose was quite widely defined and interpreted in practice. Compensation payable was the market value of similar land. Market value of such similar land, as recorded in registrar’s record, was quite depressed on account of agriculture being hardly a good value creator and the real transaction prices not being disclosed in registration documents. Solatium offered was meagre 30%. For first 30-40 years, the farmers literally got a pittance as compensation. As land was usually taken possession much before the compensation was provided, lakhs of farmers were rendered destitute.

The 2013 Law- Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013- moved the pendulum to the other extreme. Compensation was made 4 times in rural areas and 2 times in urban areas. Such multiples hurt more as the base price, as recorded in registrar’s office, was manipulated to be much higher than the normal market price. Many other compensation and assistance was mandated to be provided to not only the landowners but also various others affected persons. Provisions of social assessments and obtaining free consent of large number of people (70-80%) in case of projects with private participation were made quite stringent. The process also became impossible to navigate.

Results have been quite disastrous. Private sector has stopped making land acquisition under the 2013 Act. The Government is making payments which are way above anything justifiable. Land cost is making infrastructure projects of NHAI and others quite unviable. No road projects are being built on Build, Own and Transfer (BOT) basis. NHAI has got into debt trap.

The situation has to change. A balance in the interests of landowners and purchasers has to be restored. Land has to become freely available for industrialisation and infrastructure building of the country. This is necessary to build a $10 trillion Indian economy.

2013 Law mixes up several things. It enmeshes the environmental and social considerations of an infrastructure or industrial project with land acquisition. It confuses the welfare and development of the people with the compensation for land procurement. It fails to recognise the forces at play which affect the market prices and artificially inflates the compensation payable. It forgets considerations of viability of the infrastructure project totally. Two fundamental reforms are called for in the 2013 law.

First, the applicability of the law needs to be severely limited. It should be used only for the projects which require land for the government to produce public goods and services only. Defence, policing, health, regulation etc. should be the purposes for which land could be ‘acquired’. For the private projects, the acquisition law should be used only for the situations where the private entrepreneur is able to buy more than 80% of the land by private negotiations but some minority landowners are unjustifiably holding up remaining land. In such situations, the land acquisition law should be used only for determining what is a reasonable price.

Second, all the confusions and contradictions of the 2013 Law should be sorted out. The environmental and social impact consideration should be made applicable to the project, not the land acquisition. Price paid for land should be related to market price of land plus a compensation. If the underlying market price is not reflective of true price, the same should be objectively determined by the acquisition officer. Other interests in the land property should be recognised and compensated in a fair manner. All the requirements of giving jobs, annuities etc. should be done away with.

Land Reforms for Slums Development

Census 2011 informs that there were 44 lakh households in slums in 2011. At 5 persons a household, this meant over 2 crore people lived in slums in 2011. A Committee of the Government of India estimated that India’s slum population might increase to 10.4 crore by 2018. No good estimates of land area occupied by slums are available.

There are two basic facts about slums.

First, all slums are invariably on government and local authorities land. A survey estimated that 60% of slum land is government land and 40% that of local bodies.

Second, slums are almost always inhabited by migrants. Those migrants who come to cities in search of work and unable to find an affordable rental place to live and work from in cities end up finding shelter in slums.

It is the economic policies pursued by India which are responsible for creating slums. Elite urban planning did not envisage and allow building of affordable housing and renting places in cities at locations where such supply was needed reflected in the location of slums. Renting as a policy for housing was totally decimated by misconceived policy of rent control and almost impossible ejectment of tenant. Private sector did not build affordable rentable apartments for migrants to live in cities. The Government planners did not allow any such housing to come up as well. Result was absolute shortage of affordable rentable houses which is at the root of mushrooming slums on government lands.

While the slum development programmes undertaken by central and state governments would somewhat improve the living conditions at least in some slums, the solution, for slums, slum dwellers and the cities, has to be found in the roots of the problem.

First, the government and local bodies must recognise that clearance of slums is neither feasible nor necessary.

Second, the entire government and local bodies land occupied under slums, minus what is required for creating minimum infrastructure of utilities, should be, as a policy, be used for creating affordable housing, mostly rental housing, for migrants.

Third, the slum lands, excluding the utilities infrastructure land, should be auctioned to cooperatives of slum dwellers and private developers for developing primarily rental housing for migrants. As the rental housing would be developed in higher rise buildings, which a liberal policy should allow, the existing inhabitants should be able to get rental housing for them. The proceeds of auction can be used for infrastructure creation and providing cash support for the slum-dwellers.

INDIA’S UNFINISHED LAND REFORM AGENDA

First, it is time to move over from our present land record system of Mughal era vintage. We should create a modern national system of land records, covering both rural and urban areas. We need to move beyond recording only ownership and other rights only from agricultural relationship. We should take up a National System of Land Records to complete all land records- agricultural, residential, businesses, housing, infrastructure- recording the type of activity the land is subject to, the ownership and other attributes. This National Land Record should be managed by a Depository Institution. The Land Register should be dynamic register with every change relating to ownership or rights in land being recorded in the Land Register, as part of the transaction itself. The Land Register should be publicly available for information.     

Second, enactment of the draft Model Agriculture Land Leasing Act circulated by the NITI Aayog is an absolute must for farmers’ welfare, growth of agriculture and Indian economy. It would be advisable to widen the leasing reforms proposed in the model law. The scope of the law should be extended to allow leasing for non-agricultural purposes as well. The enactment of this law should be accompanied by deletion of all restrictive provisions in respective tenancy and land revenue laws of the states. The agricultural land taken under leasing arrangements should not be subject to agriculture ceiling laws. Leasing period should be left entirely at the will of the parties to the contract.

Third, non-agriculture use of land in India in industrialisation, urbanisation and infrastructure is very small. Less than 1% of land is used in buildings, roads and railways- which produces entire 60% plus non-agriculture GDP. Apprehensions of large-scale transfer of agriculture land into non-agriculture land are entirely misplaced and misconceived. Paucity of non-agriculture land is also responsible for excessive urban land prices. If India were to convert only 1-2% of its land mass into non-agriculture use, the entire demand supply situation for urban land would change. Non-agriculture use land would not be as costly as it is today. Industry, infrastructure and housing would become affordable and promote businesses and growth of the country. It would help farmers get little more money. Land availability for agriculture would not be affected at all.

This calls for fundamental reform of land conversion regime. Conversion of agricultural land into non-agricultural use should be freely permitted. In fact, the distinction that land is agricultural or non-agricultural should disappear. The environmental, health, safety and other legitimate common consideration are regulated by the laws which govern emissions, pollution, safety etc. Linking conversion to such requirements needs to be done away with.

Fourth, the 2013 land acquisition law- The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 needs to be thoroughly recast and refocussed.

Two fundamental reforms are called for in the 2013 law. First, it should be limited to only two types of acquisitions- the government projects to produce public goods and services like defence, policing, health, regulation etc. and private projects where more than 80% of the land has been bought by private negotiations but minority landowners are unjustifiably holding up remaining land. In case of private purpose acquisitions, land acquisition authority should only determine the fair price to be paid. Second, all the confusions and contradictions of the 2013 Law should be sorted out. The environmental and social impact consideration should be made applicable to the project, not the land acquisition. Other interests in the land property should be recognised and compensated in a fair manner but all the stipulations of giving jobs, annuities etc. should be done away with.

Fifth, slums are the result of flawed policy of not creating regulatory system and incentives for building rental housing at appropriate locations in cities. All the lands over which slums have come up are government and local bodies land. The government and local bodies must recognise that clearance of slums is neither feasible nor necessary.

To make slums habitable places to live, entire government and local bodies land occupied under slums, minus what is required for creating minimum infrastructure of utilities, should be, as a policy, be used for creating affordable housing, mostly rental housing, for migrants. Further, the slum lands, excluding the utilities infrastructure land, be auctioned to cooperatives of slum dwellers and private developers for developing primarily rental housing for migrants. As the rental housing would be developed in higher rise buildings, which a liberal policy should allow, the existing inhabitants should be able to get rental housing for them. The proceeds of auction can be used for infrastructure creation and providing cash support for the slum-dwellers.

These unfinished land reforms are critical for India’s growth and for achieving any ambition of being a high-income country in a foreseeable future. These land reforms need to be fast tracked. These are tough reforms but absolutely necessary. If we don’t bite the bullet, we will get into a low growth trajectory once again.

SUBHASH CHANDRA GARG

NEW DELHI 29/05/2020