Land Reforms


Land is probably the single most valuable asset in the country today. Not only could greater liquidity for land allow more resources to be redeployed efficiently in agriculture, it could ease the way for land-utilizing businesses to set up. Perhaps as important, it could allow land to serve as collateral for credit. Three important needed steps are: to map land carefully and assign conclusive title, to facilitate land leasing, and to create a fair but speedy process of land acquisition for public purposes.
The National Land Records Modernization Programme (NLRMP) which started in 2008 aims at updating and digitizing land records by the end of the Twelfth Plan. Eventually the intent is to move from presumptive title—where registration of a title does not imply the owner’s title is legally valid—to conclusive title, where it does. Digitization will help enormously in lowering the costs of land transactions, while conclusive title will eliminate legal uncertainty and the need to use the government as an intermediary for acquiring land so as to ‘cleanse’ title. Given the importance of this programme, its rollout in various states needs to be accelerated. Easier and quicker land transactions will especially help small and medium enterprises that do not have the legal support or the management capacity that large enterprises have.
Widespread prohibition of land leasing raises the cost to rural-urban migration as villagers are unable to lease their land, and often have to leave the land untilled or leave a family member behind to work the land. Lifting these restrictions can help the landless (or more efficient landowners) get land from those who migrate, even while it will allow landowners with education and skills to move to industry or services. Compulsory registration of leaseholds and of the owner’s title would provide tenants and landowners protection. Of course, for such a leasing market to take off, owners should be confident that long term tenancy would not lead to their losing ownership. With a vibrant leasing market, and clear title, there should be little
reason for not strengthening ownership rights.
For large projects with a public purpose—such as the proposed National Industrial and Manufacturing Zones, which will facilitate the setting up of small and medium enterprises—large-scale land acquisition may be necessary. Given that the people currently living on the identified land will suffer significant costs including the loss of property and livelihoods, a
balance has to be drawn between the need for economic growth and the costs imposed on the displaced. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2011, currently before Parliament, attempts to draw such a balance. As experience is gained with large-scale land acquisition, the institutions set up by the bill can be fine-tuned to achieve its aims.
Finally, encouragement needs to be given to land readjustment schemes, where when an area is identified for development, owners participate by giving up some of their land for infrastructure creation, but get back the rest, with the benefit that its value is enhanced by the infrastructure. Small and medium enterprise clusters can benefit especially from such schemes. Given that large-scale land acquisition is still at a nascent stage, central schemes should allow room for states to experiment and should be modified in light of state experiences.

Thursday, 13th Mar 2014, 07:14:40 PM

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