The State of Karnataka in India, also houses it’s capital Bengaluru, the ‘Silicon valley of India’. Two of Asia’s three fastest-growing cities are Bangalore and Hyderabad in southern India. According to Oxford Economics, Bangalore should achieve average annual real GDP growth of 9.9% over 2020-2024 – far above aggregate growth for India of 6.8% and average growth for Asian cities of 3.9% over the same period. Bangalore as it was traditionally called expanded in leaps and bounds, the sheer size and demography was far less precedented a decade ago. The expansion explosion has resulted in Bengaluru eating away all small villages and agricultural lands in it’s peripheries. This is not the only cause, the state has seen a lot of upsurge due to this economic activity that land as a commodity seemed to have been misused, aggregated beyond limits, destabilising the agrarian benefits and most importantly making it scarce. 

The Karnataka Land Reforms Act, 1961 (Land Reforms Act) was enacted to put in place a uniform law on land reforms in the State of Karnataka relating to agricultural land ceiling, ownership of agricultural land and prevent misuse of lands. Governor Vajubhai Vala signed the Karnataka Land Reforms (Amendment) Ordinance, 2020 and this Ordinance brings sweeping changes to the Karnataka Land Reforms Act, 1961, essentially easing restrictions on buying agricultural land, on who can buy it and the ceiling on extent of land one can hold. The amendment drops Sections 79A, 79B and 79C of the Act that imposed stringent restrictions on ownership of agricultural land.

The Ordinance signed on July 13th, provides that any land in excess of the prescribed ceiling limit is deemed as surplus land and liable to be surrendered to the State Government. Further, the Land Reforms Act originally prohibited sale, lease or mortgage of any agricultural land or an interest therein in favour of a person who is a non-agriculturist while it also imposed restriction on transfer of agricultural land to agriculturist beyond the prescribed income limit. So this Ordinance has come in timely to amend the provisions of the Land Reforms Act thereby removing the restrictions on non- agriculturist purchasing agricultural land and increasing the ceiling on agricultural land holdings. The government has decided to repeal Sections 63 (a), 79 (a), (b) and (c) in the existing legislation to enable these changes.

CEILING LIMIT ENHANCED - The ceiling limit on holding agricultural lands have been increased to 40 units; An increase from 10 to 20 Units for a person who is not a member of a family or has no family or for a family consisting not more than five members has been enhanced. In case of a family consisting of more than five members, the celling limit is revised to 20 units plus an additional extent of 4 units for every member in excess of five, however, an aggregate ceiling area not exceeding 40 units has been stipulated under this amendment. 

TRANSFER OF AGRICULTURAL LAND REGULATED - Section 79 A originally dealt with the income limit of 25 lakhs as a barrier to acquire land and Section 79 B  originally  prohibited any non-agriculturist, educational, religious or charitable institution, society, trust, company, association, body of individuals and cooperative society from holding agricultural land. The Ordinance has repealed Sections 79 A and 79 B and also 79 C of the Land Reforms Act which dealt with the penalty for failure to furnish the declaration under Sections 79 A and 79 B. In addition, Section 80 of the Land Reforms Act has been amended to remove the restriction imposed on transfer of agricultural land to non-agriculturists, educational, religious or charitable institutions, societies, trusts, companies, associations, body of individuals and cooperative societies. This has now paved way for industrialisation as a means for industrial growth and has now permitted liberalisation of the age old concept of protecting food yielding lands. 

LITIGATIONS ABATED - all cases pending in any court of law, as on the date of publication of the Ordinance in relation to Sections 79 A, 79 B and 79 C of the Land Reforms stand abated. By retrospectively repealing the Government has closed all cases pending adjudication.

ENCUMBERANCE THROUGH MORTGAGE - Accordingly, mortgage of agricultural land is permissible only to institutions referred to in Section 81 (1) of the Land Reforms Act namely, the Government, the Karnataka State Road Transport Corporation, the Karnataka Power Transmission Corporation Limited, the Karnataka Housing Board, the Karnataka Industrial Areas Development Board, the Karnataka Slum Clearance Board, the Bangalore Development Authority, Nagarabhivruddhi Pradhikara, Coffee Board, a cooperative society/financial institution/company in which the State or the Central Government or both hold more than fifty-one percent of the paid up share capital and any corporation established by the State or the Central Government or both. Sub - Section 2A was introduced to bring in this amendment to Section 81 in this regard.

CONCLUSION- While it is important to set the right tone for Industrial Growth, the Government can no longer turn a blind eye towards agriculture. Agriculture will prove to be the backbone of any economy and as long as this liberalisation does not allow for a drastic change in Farming ecosystem of the country and is regulated well - so shall the economy thrive. As per the new amendment to Section 109 approved by the Legislature in March, industrialists can buy land directly from farmers and the government feels large parcels of land cannot be brought under cultivation. Government vehemently argues that having removed these prohibitions, people who are not agriculturists but are interested in agriculture can purchase farmland enabling them to take up agriculture and thus increasing the land prices with demand.  Any reform can only be tested with time and we need to pay heed to how these amendments will bring about an optimistic change to farming, agriculture and allied industries.