Reforming Supply of Policy Land in India : Policy Note

Abstract

This note summarizes the key findings of the attached consultant report. India is still primarily a rural, agrarian economy in which land use and land rights are an emotional issue. Prior to 1990 the presumption was that only residual land (non agricultural) would be made available for industrial use and because the state was the principal industrial investor the state would acquire any land needed. After 1990 the expectation was that private investors would act to acquire industrial land but a set of policy and institutional problems have left both investors and landholders unhappy and have impeded industrial development. This report documents the nature of the policy and institutional constraints to industrial land acquisition by the private sector and recommends policy changes to address them. The broad objectives of this study are to: identify issues related to availability of land for industry and those pertaining to purchase of land by private sector and/or purchase/acquisition of land by Government for private sector industrial investments; examine the related constraints that impede the functioning of an effective land market in the country and recommend possible solutions to address such constraints; and suggest alternatives for making suitable land available to private sector industrial investors with necessary social and environmental safeguards.