New Delhi: A Group of Ministers (GoM) set up to promote Indian manufacturing, led by Union Textiles and Women and Child Development Minister Smriti Irani, has suggested that state governments should consider allowing industries to buy land directly from farmers.
The ministers flagged that acquisition of land for industrial purposes is a long-drawn process, and emphasised the need to create a better operating environment.
“All state governments should be recommended to consider allowing industries to buy land directly from farmers. While industries will still need to seek permission, a deemed approval after 30 days may be provided,” stated the GoM report, which was submitted to the government in October, and accessed by ThePrint
“Further, land titling is a major issue due to involvement of multiple authorities — like surveying, revenue, stamp registration, lending institutions, local bodies and courts — who work in silos.”
Land acquisition and Indian states
Soon after coming to power in 2014, the Narendra Modi government had tried amending the land acquisition laws to encourage industrial growth, which would have even allowed companies to obtain land without the consent of the owner, in some cases.
However, faced with stiff resistance from farmers as well as opposition parties, the government had decided to not push for the move. The bill was cleared by the Lok Sabha, but as the government did not have a majority in the Rajya Sabha, it got stuck.
This year, a number of Indian states, battling the economic impact of Covid-19, relaxed their land acquisition norms to improve ease of doing business. States like Uttar Pradesh, Gujarat and Telangana, among others, allowed purchase of agricultural land for industrial use.
Now, the GoM report has stressed on ensuring availability and timely approvals for land acquisition. It stated: “Registering property for industrial purposes in India is a cumbersome and costly process, which is why India country ranks 154th in ‘registering property’ in the Doing Business report.”
The GoM report has advocated that states must be encouraged to acquire sizeable areas of non-inhabited land and carve out investment zones, which should be notified as industrial townships.
“Investments can then be managed by special purpose vehicles (SPVs), which should be allowed to function as independent self-governing bodies. Plug-and-play facilities and financial incentives can be offered to further incentivise investors,” it said, giving the example of Dholera and GIFT cities in Gujarat.
The GoM report has been shared with all ministries who will have to take action according to its recommendations.
It has also suggested that a nationwide investment data repository be created with clear metrics relating to each state’s regulatory and procedural environment, land availability, infrastructure accessibility, skilled labour pool, incentives structures and taxation and tariff regimes.
“This initiative will not only help investing companies in making informed choices, but also promote sectoral cluster development,” it stated.
The GoM added that all state governments should further be encouraged to undertake digitisation and integration of land records of the last two years across the sub-registrar’s office, land records office and local municipality offices.
It has also highlighted that uniformity in data record keeping across states should be encouraged. “Standard template can be provided by the government of India. Create a single online portal providing integrated information of transaction deeds from the aforementioned offices and the civil courts,” it said.