While the amendments to land acquisition law was put in abeyance in 2015 due to fierce political opposition, the Centre will likely revisit the issue after the general election to usher in the much-needed reforms in land records and titling and tenancy. Changes could be proposed in the land-use policies for urban, forest and agricultural land, to ensure that the pace of industrialisation and infrastrcture creation is not stymied by delays in land acquisition.
Streamlining these issues would augment credit flow to the needy sectors and resolve land-related disputes, which comprise almost two-thirds of pending court cases in India, analysts said.
“Small and fragmented land holdings are likely the biggest challenge to improving India’s economic productivity. Reform in land laws and records for ownership and tenancy are critical to bring agricultural activity to a more competitive scale, enable mechanisation, bring greater financial flexibility, and improve supply chain efficiencies,” said Ajit Pai, Strategy Lead Partner, Government and Public Sector, EY India.
After coming to power in May 2014, the Narendra Modi government promulgated an Ordinance to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act, 2013, which was enacted during the previous Manmohan Singh government and came into effect from January 1, 2014.
On December 31, 2014, the government sought to amend the Act by promulgating an Ordinance to make several changes to the 2013 Act including empowering it to exempt five categories of projects — national security, rural infrastructure, affordable housing, industrial corridors, and infrastructure and social infrastructure projects — from the requirements of ‘determination of social impact and public purpose’, and ‘special provision to safeguard food security’. It also exempted these categories of projects from the ‘consent’ clause provided under the 2013 law. Faced with widespread protests, the government allowed the Ordinance to lapse.
In 2021, the government had also withdrawn three farm laws which included legalising contract farming as farmer groups argued against it as they thought it would lead to loss of land ownership. Nearly 40% of the total cultivable land follows a tenancy farming model.
“Today, it is estimated that about 44% of India’s workforce is engaged in agriculture, compared to about 2% for advanced large economies. Small and fragmented holdings are a critical factor driving this massive underemployment” Pai said.
To improve land access to small and marginal farmers through land leasing, the Centre enacted the Model Agriculture Land Leasing Act, 2016, which also provided a mechanism for tenants to avail of institutional credit. A major constraint to land leasing under the present regulatory environment is the unwillingness of landowners to lease out land due to fears of land capture by tenants. The Model Act spells out the rights and responsibilities of both landowners and tenants as well as dispute resolution within a specified timeframe. However, most states did not implement it, major not to antagonise farmers, which form a large chunk of electoral base.
After coming back to power, the BJP-led government will make sure that low-hanging fruits like the ongoing Digital India Land Records Modernization Programme (DILRMP) and Bhu-Aadhar or Unique Land Parcel Identification Number (ULPIN) are completed to make it easier for banks to lend for projects where land is collateral as well as bring down land-related disputes, a major issue in the implementation of infrastructure/industrial projects, said Sandeep Vempati, an Economist with the BJP.
Substantial progress has been achieved under the DILRMP Programme. In terms of basic components, 95.08% of Record of Rights (RoR) have been completed (6,25,062 villages out of a total 6,57,396 villages in the country), 68.02% of Cadastral Maps have been digitized (2,49,57,221 maps out of total 3,66,92,728 maps), 94.95% Computerization of Registration completed (5060 Sub-Registrar Offices out of total 5,329 SROs) and 87.48% Integration of Sub Registrar offices(SROs) with Land Records have been completed (4,662 SROs out of total 5329 SROs). The DILRMP, a central sector scheme, will run till FY26.
“We want to make sure these projects are fully implemented and see the greater impact of these reforms in the next five years or so,” Vempati said.
ULPIN system is a 14 digit Alpha–numeric unique ID for each land parcel based on Geo-coordinates of vertices of the parcel which is of international standard and complies with Electronic Commerce Code Management Association (ECCMA) standard and Open Geospatial Consortium (OGC) standard, is being implemented across the country. ULPIN will have ownership details of the plot besides its size and longitudinal and latitudinal details. This would facilitate real estate transactions, help resolve property boundaries issues and improve disaster planning and response efforts, among others.
“India needs to shift from presumptive land titling to a conclusive titling system providing guaranteed titles that cannot be challenged in court,” Pai said.
According to the Ministry of Rural Development, the GDP loss to the country’s economy is about 1.3% due to projects being stalled over litigation involving land disputes. A study says, 66% of all Civil suits in India are related to land or property disputes, and the average pendency of a land acquisition dispute is 20 years.
Some of the main reasons of cost escalation in projects include spiralling land acquisition costs, high cost of environmental safeguards and rehabilitation measures, changes in scope of projects, monopolistic pricing by vendors of equipment services and time overrun. The main causes of time overrun are delays in land acquisition and obtaining environment clearances, lack of infrastructure support and linkages and delays in tie-up of project financing.
“This is where part of the east becomes a drag for the country for the reasons that even today a lot of land in these regions are not digitised. Then only investments can pick up in those regions,” said N R Bhanumurthy, Vice-Chancellor of Bengaluru’s BASE University.