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Land Leasing A Big Win-Win Reform for the States - Arvind Panagariya

Dated:- 14-7-2015 - The Vice chairman of NITI Aayog, Arvind Panagariya has said that states wishing to facilitate industrialization can further benefit from liberal land leasing if they simultaneously liberalize the use of agricultural land for non-agricultural purposes. He shared the views with the people in his blog post published on the website of NITI Aayog in New Delhi. The full text of the blog post is as follows and can also be accessed at www.niti.gov.in Land leasing laws relating to rur .....

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also either prohibited or heavily discouraged leasing and sub-leasing of land. Politically influential landowners were successful in subverting the reform, however. As P.S. Appu documents in his brilliant 1996 book Land Reforms in India, till as late as 1992, ownership rights were transferred to the cultivator on just 4% of the operated land. Moreover, just seven states, Assam, Gujarat, Himachal Pradesh, Karnataka, Kerala, Maharashtra, and West Bengal, accounted for some 97% of this transfer. I .....

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t paying closer to 50% of the produce in rent. 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 for long banned tenancy, permitting only recently self-help groups to lease land. Some states including Punjab, Haryana, Gujarat, Maharashtra and Assam do not ban leasing but the tenant acquires a right to purchase the leased land from the own .....

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r holds any relevance. These restrictions have detrimental effects on not only the tenant for whose protection the laws were originally enacted but also on the landowner and implementation of public policy. The tenant lacks the security of tenure that she would have if laws permitted her and the landowner to freely write transparent contracts. In turn, this discourages her from making long-term investments in land and also leaves her feeling perpetually insecure about continuing to maintain cult .....

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ng that such insurance is likely to be highly subsidized, as has been the case with the past programmes, a natural question is how to ensure that the tenant who bears the bulk of the risk of cultivation receives this benefit. The same problem arises in the face of a natural calamity; if tenancy is informal, how do we ensure that the actual cultivator receives disaster relief. In a similar vein, fertilizer subsidy today is subject to vast leakages and sales of subsidized fertilizer in the black m .....

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from liberal land leasing if they simultaneously liberalize the use of agricultural land for non-agricultural purposes. 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 implemen .....

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