To facilitate the process of land reforms across India, the NITI Aayog has formulated a model land leasing law that allows transfer of leased land directly from the tenant, said Arvind Panagariya, vice-chairman of India’s policy thinktank that has replaced the planning commission.
Panagariya said that the model law is part of a report formulated by a NITI Aayog committee chaired by Tajamul Haque and will be made public in two days. The model can be adopted by states to reform their land laws.
“The purpose of the model act is to offer a way by which you can introduce tenancy legally, thereby securing the rights of the tenant and security of ownership of land with the owner,” Panagariya said at the annual session of the Confederation of Indian Industry (CII) here on Monday.
In many states, the governments have undertaken land reforms assuming tenant as the owner. This has made official leasing of land difficult. “Many states officially allowed only limited tenancy. So a lot of tenancy went underground,” he said, “But today many even marginal farmers want to lease out their land.”
During a session on “Delivering on the Promise that is Indian Economy”, he said non-performing assets (NPAs) of banks and job creation are the two biggest challenges that the economy faces.
Panagariya said that in the banking sector problems are more challenging as banks require capital infusion on the one hand, while needing proper fiscal management on the other. “73% of the workers are engaged in small industries that contribute to only 12% of the output, which needs to change,” he said.
Panagariya cited the slowdown and rising wages in China, coupled with its aging population, as an opportunity for India to attract capital and managerial skill that can create quality jobs and better Indian firms. “We have got a great opportunity here. But we need to create the right ecosystem,” he said.