Land leasing in India is legally governed by multiple laws enacted by states within their respective jurisdiction. As a result, there is no uniformity in the land leasing laws across the country.
Telengana, Bihar, Karnataka, Madhya Pradesh and Uttar Pradesh ban land leasing with exceptions granted to landowners among widows, minors, disabled and defence personnel. Tenancy is banned in Kerala for long but the state has only recently permitted only self-help groups to lease land. States like Punjab, Haryana, Gujarat, Maharashtra and Assam do not ban leasing but the tenant acquires a right to purchase the leased land from the owner after a specified period of tenancy. Only Andhra Pradesh, Tamil Nadu, Rajasthan and West Bengal have liberal tenancylaws.
Why Model Law is needed ?
A well crafted formal land leasing law will allow big landholders to lease out some or all of their land and look to other sectors for employment thereby easing the pressure on agricultural sector. Simultaneously it will allow landless poor to lease in some land and earn a decent living .
In India, close to 20% of land holdings are managed by tenant farmers. But in absence of formal land leasing agreements these tenant farmers are not able to access formal credit, insurance, disaster relief and other support services provided by the government as they cannot prove any ownership or other rights over the land they are cultivating.
Also due to the presence of several clauses like 'adverse possession clause' or 'minimum area clause' the landowners are afraid of losing their land to tenants. As a result they keep on changing tenants and the tenants are left insecure and are wary of making long term investments in lands cultivated by them.
Features of the model act
The model land leasing act framed by T Haque of Niti Aayog aims at removing all the discrepancies in the state laws and set up a formal uniform land leasing law for the country to promote tenancy in agriculture. The core features of the model law are-
- It makes land leasing legal
- It aims at removing the 'adverse possession clause' from the state laws as it deters land owners from freely leasing out their lands. (under this clause the tenant may claim possession to the land for a certain period under certain circumstances)
- In some states, the tenancy laws have clauses that require a minimum area to be left to the tenant at the expiry of lease period to protect his/her future. The model law does away with this requirement as it deters the landowners from leasing out lands. The law allows automatic resumption of ownership to the actual owner after the end of lease period, without requiring any minimum area criteria.
- The terms of lease and rent are to be mutually determined by the tenant and the land owner.
- The law allows access to formal credit and insurance and other services to the tenants on basis of lease agreements.
Utility of the law
- The model act/law will promote land leasing thereby allowing landless poor to access productive land and at the same time allow big landowners to lease out land and take up some other economic activity thereby easing pressure on agriculture and diversifying rural economy.
- The model law will allow tenant farmers to access formal credit, insurance, disaster compensation and other government benefits.
- The law will allow unused lands to be used productively as the tenant farmer will feel secure in investing in the land and will have access to formal credit and insurance services.
- This will enable consolidation of fragmented land holdings as the small unviable plots could be leased out.Agriculture being a state subject, the states have to frame their own laws incorporating the features of the model law into their legislations. Some states like Madhya Pradesh, Gujarat, Odisha have started reforming their laws and others should be asked to follow the suit.
Also, the proposed Act limits the use of agricultural land to agriculture and allied activities only. However, Arvind Panagariya, Vice Chairman, NITI Aayog in his official blog said that he wished to extend this kind of Act to non-agricultural uses (industrial purposes) as well. He said that state governments wishing to facilitate industrialisation could further benefit from liberal land leasing if they simultaneously liberalised the use of agricultural land for non-agricultural purposes. He called upon state governments to amend laws to permit leasing of agriculture land for industrialisation. This could further contribute to the diversification of rural economy.