To get over land acquisition hurdles, States wishing to facilitate industrialisation can go in for liberal land leasing if they simultaneously liberalise the use of agricultural land for non-agricultural purposes, according to Arvind Panagariya, Vice-Chairman of NITI Aayog, the think-tank that advises the Prime Minister on crucial policy matters.
In a blog posted on NITI Aayog’s website on Monday, Panagariya called for transparent land leasing laws that allow the potential tenant or sharecropper to engage in written contracts with the landowner, terming it a “win-win reform”.
Panagariya’s views are significant as they come ahead of NITI Aayog’s meeting on July 15 on the controversial Land Bill, among other issues, to be addressed by Prime Minister Narendra Modi. According to reports, some Congress Chief Ministers are considering boycotting the meeting.
In his blog, Panagariya called upon State governments to “seriously” consider revisiting their leasing (and land use) laws. “We, at the NITI Aayog, stand ready to assist them in this endeavour,” he added.
He said currently, conversion of agricultural land for non-agricultural use requires permission from the appropriate authority, which can take a long time.
“State governments can address this barrier by either an amendment of the law to permit non-agricultural use or by the introduction of time-bound clearances of applications for the conversion of agricultural land use in the implementing regulations,” he added. To facilitate industrialisation, he suggested long-term land leases that allow the owner to retain the ownership while earning rent on her land. In addition, she will have the right to renegotiate the terms of the lease once the existing lease expires, he added.
Panagariya said many large States, including Telangana, Bihar, Karnataka, Madhya Pradesh and Uttar Pradesh, ban land leasing, with exceptions granted to landowners among widows, minors, disabled and defence personnel. Kerala has also for long banned tenancy, permitting only recently self-help groups to lease land.
However, Punjab, Haryana, Gujarat, Maharashtra and Assam do not ban leasing but the tenant acquires a right to purchase the leased land from the owner after a specified period of tenancy.
This provision, too, has the effect of making tenancy agreements oral, leaving the tenant vulnerable, he added.
Only Andhra Pradesh, Tamil Nadu, Rajasthan and West Bengal have liberal tenancy laws, with the latter limiting tenancy to sharecroppers, he said, adding that the “original intent of the restrictive tenancy laws no longer holds any relevance.”