MALAYSIAN CIVIL SERVICES LESSONS FOR INDIA .pdfPUNJAB HIMACHAL ECONOMY COMPARISON MARCH 2024_240401_222402.pdfAbhijeet_Banerji_Duflo_.pdfBangladesh LOOKING EAST.pdfAkshay_Sood_Demitting_Notes__Finance14_Sept_23_ (1).pdfCORRUPTION A WAY OF LIFE.pdfFISCAL AND ECONOMIC INDICATORS HIMACHAL BUDGET 2007 .pdfNITI AYOG Tajmul Haq Expert Committee on Land Reforms /Land Leasing
NITI 2016 Tajmul Haq Expert Committee Report Land Leasing
[05/03, 16:58] Akshay Sood: https://acrobat.adobe.com/id/urn:aaid:sc:AP:a82b084c-c985-43be-86c6-e0eac5ef7c9f
[05/03, 17:24] Akshay Sood: Sec *118* Discussion
Discussion on Sec 118 by the Group members is lively and energetic .
All points discussed in this group are very relevant .
The Policy of Sec 118 and the objectives behind the land transfer restrictions have largely been achieved. There has been no large-scale land transfer to non agriculturists , as a result , except through permissions and, in certain cases , through devious means , as is known and discussed here also in this group .
The principal objectives of conferring tenancy rights under the 1972 law too have been achieved , benefiting 5 lakh tenants , in the 70s .In fact , this was the main objective of the 1972 law , Sec 118, barring transfer of land to non agriculturists , being a somewhat subservient objective of the 1972 Act .
The political consensus in the state and one would say , even the public consensus is to retain Sec 118 provision , with appropriate concessions / relaxations / exceptions , many , already provided in this section / law .
Land alienation by small holders is a sensitive issue and also an economic and livelihood issue .
And rightly so .Given the strong economic strength of the business group(s ) / big traders / industry houses and real estate groups , protection of small / marginal farmers / landowners continues to be necessary. 97 % of land owners in HP are in this category .
That was the sentiment in Uttarakhand and hence the recent new law , and there is a similar sentiment in JK, too .
Land as a *Factor* of *Production* / Economic Asset .
Given the very small fragmented and Undivided land Holdings ( pointed in Sh Batta's paper too ), and other reasons as migration of youth , free / cheap foodgrain , and animals menace, land cultivation has become unviable and productivity in Agriculture sector in HP is very low .3rd lowest in the country , at par with 2 NE States .
Over 55 % of the labor of the State is in the farm sector, with the sector yielding low returns in Agriculture/ Food grains areas of the State .
To unlock land potential in these areas of the State is important through various means, including through organising farmers through FPO s, which can consolidate lands of farmers ( without actual land sale ) through Primary Agriculture Cooperatives and other such organised means .These groups can take up organised farming on behalf of land owners without land transfer .
2 .To consider how to suitably adopt 2016 NITI appointed Tajmul Haq Expert Committee Report on the draft Model Land Leasing Law for States ( shared separately here ) , to Himachal Pradesh , to benefit farmers and farming families, to increase their incomes .The law will / may also benefit landless labourers of the State , many of whom don't own land , but who work on land , informally / by unwritten agreements , as is also brought out in NITI Report .There are possibly other Reports too in this regard , which are referenced in the 3 Farm bills passed in 2020 and later repealed .
3 .Section 3 of the 2020 repealed Farmers Agreement on Price Assurance and Farm Services Act 2020 ( one of the 3 Farm laws ) provided for written farm agreements between Farmers and a Sponsor / Service provider for a period upto 5 years .The relevant repealed law is shared herewith .This law , too, can be a basis for debate / discussion with appropriate changes or by incorporating some of its provisions into 1972 LR & Tenancy Act .
Section 8 of this repealed Act provided that no farming agreement could provide for transfer of land, and no private sponsor could raise permanent structures on the land of farmers . Essentially , since States had not been able to move in the direction of land leasing laws / laws to enable agreements between Farmers and private parties / companies , Central Government came up with this law ( later repealed along with 2 other laws in 2022 ) to enable such agreements to provide security of land tenures and to help farmers get more income from their farms .Without transfer of land .
4 . A small tentative effort was made in this direction to enable land leasing / hiring by farmers with adequate safeguards , by an announcement in the 2020 -21 budget of HP , but the announcement lacked serious political backing , also Covid prevented any meaningful discussion on this tentative effort . Incidentally, the Budget statement in this regard was couched in a diplomatic / vague language to avoid the charge of putting " Himachal on Sale " an oft spoken tirade on both sides of the political divide .
TO SUM UP
Sec 118 has to continue given the State policy , as mentioned by Sh Sihag .
Let an effort be made to modify the 1972 law to enable better farming practices / to improve productivity through the above-mentioned means / alternative legal means . And also to consider starting a debate on land leasing provisions by suitable changes in Sec 118 .
For the industry/ real estate / service sector , the existing provision of case by case approvals by the government should continue despite the issue of delay / sharp practices, etc , as brought out in the discussion. There have to be meaningful policy changes in policies of the State ( this being only one of them ) since HP , along with Punjab , Bengal, and 2 NE States, are highly debt stressed. Uttarakhand is better than HP on this parameter, as mentioned by Sh Mehta .
Thanks
Akshay
PS : My Notes on a discussion on Section 118 HP Land Reforms and Tenancy Act
21st April 2025
Mint Article on on Himachal Finances December 2024
[06/12/2024, ]The Mint Reporter's story is correct and useful as it explains the weak Treasury/ Fiscal position of the State
But fortunately, States never go bankrupt.
Because States are semi sovereign entities.
But yes , salaries/ pensions may frequently get delayed , a la Punjab , where it has been happening so for several years .
Payment of arrears too will get delayed .
For employees, additional DA release on GOI pattern could be delayed for a long time .
Similarly, for additional Dearness Relief of OPS Pensioners .So there will be many losers especially the youth .
We not only have a weak treasury, but more importantly , State's economy continues to be tepid .
Both the Industry and Agriculture sectors .
As has partly explained in an attached note comparing Punjab and Himachal economies , shared below .
One way to walk the talk ( and it will be a long walk ! ) would be to follow sound economic policies for the medium/ long term for the State .
In the short run , the Mint correspondent has rightly suggested steps to be taken .
Some steps that can be considered :
Among the 4 Factors of Production , maybe we can do something with the land Factor of Production by relaxing Sec 118 in the Industrial border areas of the State , by law .
Maybe create Special Zones in only Border districts to attract Industry , without 118 restriction. Something like what China did and what Economist Prof Karthik Murlidharan too has suggested for the country ( not HP ) to attract Industry in his recent Book .
2. To allow leasing of agriculture lands , without land alienation / outright sale , to attract investment in Agriculture, to modernise agriculture, and to cultivate fallow lands . Suitable changes in Tenancy law needed .
NITI / GOI has suggested land leasing for all States , some time back .There are papers on this subject .One such NITI Paper is attached .The recommendation is at para 1.3.6 of the NITI Report .
HP has the 2nd / 3rd lowest Agricultural productivity in the Country . Making Agriculture productive is especially relevant for the agriculturally backward districts of Kangra , Hamirpur, Una , Bilaspur , Chamba , Mandi .Also some other areas of other districts too .
3 . A few more things need to be considered, for eg making FPOs more extensive and vibrant , especially in Horticulture districts of Shimla , Kullu , Solan etc ,strengthening and promoting Cooperatives (more relevant to new Himachal districts where Cooperatives play an important role ).Presently , even PACS ( Farmer societies ) can not buy land due to Sec 118 restriction .
https://acrobat.adobe.com/id/urn:aaid:sc:AP:51d20bf6-51c4-4d7c-9aba-6cb5fa1a522c
Akshay Sood: https://acrobat.adobe.com/id/urn:aaid:sc:AP:320bf3ef-41e2-4521-b711-073730311769
Akshay Sood: A limited comparison of Pb and HP Eco surveys in March 24 .
Sharing it
Abhay Pant views : 1.I liked your comparison between Punjab and Himachal
2.The write up in Mint we all know.
3.My randum thoughts on Fiscal issues of Himachal: Demise of Planning commission, introduction of GST, a destination based tax(VAT increased our tax revenues) , increase in cess and surcharges by centre from about 10 percent to about 20 percent has reduced FC tax devolution from about 36 percent to about 31%, 15th FC deserting adoption of 1971 census population data have also impacted fiscal space for Himachal. Besides though by definition, GDP is goods and services produced within a State but a significant portion is transfered out side. Per capita tax and non tax revenue should also be considered we should take up with 16th FC. I was looking at the numbers. They look good.
You would recall initially class 4 used to get 100%DA, few 65% and class 1 used to get 35% . We could freeze DA, introduce graded pattern, or even freeze salary.
It is very important to take up with the 16th FC to use the 1971 census data.
From the report of 15th FC, I found Bihar, UP have benefited a lot.