Why HP govt should be cautious with simplifying its Land Act

Himachal Pradesh does not allow non-Himachalis to buy land in the State easily. Now HP’s new CM has spoken of simplifying the tough Land Act to attract investment. But will this put farmers at risk?

The the hills of Himachal Pradesh have since colonial times drawn people from the plains to acquire land in its cool climes. Rising temperatures and disposable incomes in the hot cities of North India have seen a swarms of builders, educational institutions, tourist operators and those looking for second home in the hills come scouting for land. In fact, it may not be wrong to say that real estate developers from all over India are drawn to Himachal Pradesh (HP).

Yet, it is not simple to acquire land in HP. Those who manage to break through the stiff bureaucratic system and tough laws that prevent non-Himachalis from buying land here, meet with success. Others back off, daunted by paperwork and arbitrary permissions usually granted as favours by the political establishment of the day. On the whole, however, Himachalis are very possessive of their agricultural lands which is why proposals to dilute the tough HP Tenancy and Land Reforms Act, 1972 rings alarm bells across the State.

This is what happened last month when soon after assuming power Bharatiya Janata Party’s (BJP’s) new chief minister Jai Ram Thakur said that there was a need to simplify the Act to facilitate industrial development and big investment. Section 118 of the Act bars non-Himachalis from purchasing land in the hill State without permission and when it is given it is limited to a fixed area. The restrictions apply even to Himachalis who have lived in the State for decades but do not own agricultural land.

The chief minister’s statement led to an immediate reaction from the Opposition Congress which accused the BJP government of trying to protect the interest of capitalists and businessmen at the cost of the State and its farmers.

But why is HP so protective of its agricultural lands? The state’s economy is entirely dependent on horticulture and agriculture which provides even the smallest of its farmers a good living. Besides apples, apricots, plums and peaches, the State has emerged as a major producer of off-season vegetables, providing farmers with handsome incomes. But the worry comes from the shrinking of cultivable agricultural lands due to urbanisation, government infrastructure development and division of family holdings due to increase in rural populations.

According to the Agriculture Census 2010-2011 (Phase I), cultivable agricultural land holdings are decreasing by 30,000 hectares each year. Cultivable land in Himachal Pradesh declined from 9,68,000 hectares in 2005-06 to 9,55,000 hectares in 2010-11. This is a decrease of 1.41 % against an all-India average of 0.80 %.

In the last two decades or so fruit farming on marginal lands in the hills have improved the quality of life dramatically and it remains a highly remunerative cultivation option for farmers. Over 86 % of the State’s population is now literate, and below the age of 14 years there is 100 % literacy. Non-viable subsistence farming practiced in earlier times has given away to viable farming done to harness the niche potential of marginal land holdings. On the whole, it has promoted the productive use and management of land resources.

“Today a marginal farmer with a micro land holding can earn a good income by growing cash crops. It is important to safeguard the interests of these farmers and prevent them from being exploited by land sharks who will inevitably tempt them with instant money in return for their lands. This is why any dilution of Section 118 of the Act should be carefully considered,” said Vikram Rawat, a well- known horticulture entrepreneur who is encouraging farmers to grow English vegetables and high density dwarf apples in HP.

Presently, non-Himachalis can buy land for non-agricultural use in areas such as tourism, education, medical facilities, hydro power generation among other areas after obtaining permission from the State cabinet. Individual outsiders can also buy limited constructed property for residential purposes in urban areas only.

Despite these stringent provisions the previous Congress government gave permission to 853 individuals and institutions in the last three years and 124 violations of the Act were detected, according to figures given by CM Thakur in the Assembly this week (March 28, 2017). Of this 187 industrial projects too got permission.

He also admitted that “the issue of simplification of the Act is under consideration of the government.” Amendments to the contentious Section 118 of the Tenancy and Land Reforms Act have been made on five occasions in 1976, 1987-88, 1994-95, 1996-97 and 2005-06, he said in a written reply to a question.

A look at the figures given by Thakur shows that maximum permissions were given in the districts of Shimla, Solan and Kangra which have for long been the favourite destinations of land developers from the plains. His statements clearly reveal the government’s intention to further dilute the Act to make it easier for non-Himachali industrialists to set up ventures here. The government claims that this will spur development and open up the hill State’s economy. The tricky question however is whether the HP government will be able to keep a check on violations and the inevitable misuse of the intended dilutions in order to protect the interests of its vulnerable small and marginal farmers. After all, it doesn’t take long for a crack in the door to split wide open.

(Photo credit: Narendra Bisht/Fortune India)

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