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Land leasing reforms can prove to be very advantageous for states

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By Arvind Panagariya

Land leasing laws relating to rural agricultural land in Indian states were overwhelmingly enacted during decades immediately following the independence. At the time, the abolition of Zamindari and redistribution of land to the tiller were the highest policy priorities.

land for sale

Top leadership of the day saw tenancy and sub-tenancy as integral to the feudal land arrangements that India had inherited from the British. Therefore, tenancy reform laws that various states adopted sought to not only transfer ownership rights to the tenant but 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 percent of the operated land. Moreover, just seven states, Assam, Gujarat, Himachal Pradesh, Karnataka, Kerala, Maharashtra, and West Bengal, accounted for some 97 per cent of this transfer.

In trying to force the transfer of ownership to the cultivator, many states abolished tenancy altogether. But while resulting in minimal land transfer, the policy had the unintended consequence of ending any protection tenants might have had and forced future tenants underground.

Some states allowed tenancy but imposed a ceiling on land rent at one-fourth to one-fifth of the produce. But since this rent fell well below the market rate, contracts became oral in these states as well, with the tenant paying closer to 50 per cent 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 owner after a specified period of tenancy. This provision too has the effect of making tenancy agreements oral, leaving the tenant vulnerable.

Only the states of Andhra Pradesh, Tamil Nadu, Rajasthan and West Bengal have liberal tenancy laws with the last one limiting tenancy to sharecroppers. A large number of states among them Rajasthan and Tamil Nadu, which otherwise have liberal tenancy laws, do not recognize sharecroppers as tenants.

The original intent of the restrictive tenancy laws no longer holds any relevance. Today, 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 cultivation rights. Furthermore, it deprives her of potential access to credit by virtue of being a cultivator.

Landowner also feels a sense of insecurity when leasing land with many choosing to leave land fallow. The latter practice is becoming increasingly prevalent with landowners and their children seeking non-farm employment.

Public policy too faces serious challenges today in the absence of transparent land leasing laws. There are calls for expanded and more effective crop insurance. Recognizing that such insurance is likely to be highly subsidized, as has been the case with the past programs, 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 market. In principle, these leakages could be sharply curtailed by the introduction of direct benefit transfer (DBT) using Aadhar seeded bank accounts along the lines of the cooking gas subsidy transfer. But in face of difficulty in identifying the real cultivator and therefore intended beneficiary, DBT cannot be satisfactorily implemented.

In the context of the difficulties in land acquisition under the 2013 land acquisition law, 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.

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.

The reform will open up another avenue to the provision of land for industrialization: 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.

Therefore, the introduction of transparent land leasing laws that allow the potential tenant or sharecropper to engage in written contracts with the landowner is a win-win reform. The tenant will have an incentive to make investment in improvement of land, landowner will be able to lease land without fear of losing it to the tenant and the government will be able to implement its policies efficiently.

Simultaneous liberalization of land use laws will also open up an alternative avenue to the provision of land for industrialization that is fully within the state’s jurisdiction and allows the landowner to retain ownership of her land.

A potential hurdle to the land leasing reform laws is that landowners may fear that a future populist government may use the written tenancy contracts as the basis of transfer of land to the tenant and therefore would oppose the reform. This is a genuine fear but may be addressed in two alternative ways.

The ideal way would be yet another major reform: giving landowners indefeasible titles. States such as Karnataka that have fully digitized land records and the registration system are indeed in a position to move in this direction. For other states, such titles are a futuristic solution.

Therefore, in the interim, they can opt for the alternative solution of recording the contracts at the level of the Panchayat eschewing acknowledging the tenant in the revenue records. They may then insert in the relevant implementing regulations the clause that for purposes of ownership transfer, only the tenancy status in revenue records would be recognized.

State governments must seriously consider revisiting their leasing (and land use) laws to determine if they could bring about these simple but powerful changes to enhance productivity and welfare all around. We, at the NITI Aayog, stand ready to assist them in this endeavour.

(IANS)

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Top 5 IAS Officers Who Acted As The ‘Steel Frame’ Of Bureaucracy

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Indian Administrative Service is the steel frame of bureaucracy. Wikimedia Commons
Indian Administrative Service is the steel frame of bureaucracy. Wikimedia Commons

BY SHANTAM SAHAI

Indian Administrative Service (IAS), as described by Sardar Vallabhbhai Patel is the steel frame upon which the bureaucracy rests. No matter how many times the government changes, if we have good IAS officers, they would ensure good governance. Since the decades that have passed after Independence, doubts over the competence of the Indian Administrative Service have been raised. People wished to know if the steel frame is still strong, or has it became rusty and weak?

The answer lies in these dynamic and dedicated IAS officers who are doing wonders in their districts through fresh ideas. They are actually changing the country for the better!

ALSO READ: Woman IAS officer Gauri Parashar Joshi saved Panchkula when Local Police Ran Away

1. Rohini R. Bhajibhakare

Rohini  Bhajibhakare is the daughter of a marginal farmer who became the first woman collector in Tamil Nadu in 1790. She is known for her people-centric governance.
  • She conducts surprise checks in government hospitals.
  • Keeps in touch with officials through WhatsApp.
  • Also, gives pep talks to school students.
  • Even visits the rural areas to directly listen to grievances of the people.
  • Banned the use of plastic or polythene articles on the Collectorate campus.

She has recently been appointed the collector of Salem district.

Salem District Collectorate. Wikimedia Commons
Salem District Collectorate. Wikimedia Commons

2. Ronald Rose

A 2006 batch IAS officer of the Telangana cadre, Ronald had single-handedly ensured the effective implementation of government initiatives in the district and taken it to the forefront of the rural development in the state. He is a man who is driving an amazing transformation of Mahbubnagar district of Telangana.

  • Villages have become free of open defecation.
  • Farmers use organic methods.
  • Soak pits have been successfully dug in the houses.
  • Haritha Haaram programme, a large-scale tree-planting campaign has also been successful.

Ronald Rose is also the brain behind Divyang Solar Society.

3. Saurabh Kumar

A 2009-batch IAS officer of Chhattisgarh cadre, Saurabh Kumar converted a Naxal-hit Palnar village to a cashless village post demonetisation, despite the village had no cellular connectivity.

Lunch with the Collector

Kumar understands how lack of education and unemployment could lead the youth towards violence and extremism. Hence, he introduced counselling sessions to help students make the right career choice. These sessions involve Saurabh and other senior officials directly interacting with the students.

Through this thoughtful initiative, he has earned the respect of the locals of Dantewada.

4. Prasanth Nair

A 2007 batch IAS officer of Kerala cadre, Prasanth Nair is affectionately called ‘Collector Bro’. He is popular for the initiatives he kickstarted as the collector of Kozhikode.

  • Operation Sulaimani: It is a decentralized participatory project to address the issue of hunger in urban areas.
  • Tere Mere Beach Mein: It is a project to tackle waste management at Kozhikode Beach.
  • Yo Appooppa: It is an attempt to improve the quality of life of the elderly.

Nair also once offered a free plate of Malabar biryani to each individual who volunteers to clean a 14-acre pond. The idea, unsurprisingly, worked.

ALSO READ: The world of Civil Services Aspirants – Coaching Institutes

5. PS Pradyumna

PS Pradyumna is a man on a mission. His well-planned and inclusive initiatives have breathed new life into the development of the Andhra Pradesh district.

  • Palle Vanam: It is a rural afforestation programme that will create natural green spots with benches and walking tracks for villagers.
  • Nirbhaya Patrolling: it is a programme in which women cops on electric bicycles keep an eagle eye on zones covering educational institutions, bus stops and areas vulnerable to sexual harassment.
  • Construction of one lakh individual toilets (under the Palle Nidra programme)
  • Water conservation in drought-prone areas (under the Handri-Neeva project)

He has also established affordable selling centres for providing the agriculture equipment to farmers.