AUTHORED BY - PRANAV N & TANISHA B C

The Karnataka Land Reforms Act of 1961 aimed to ensure equitable access to farmland ownership by regulating landholding, granting ownership rights to tenants, and imposing ceilings on landholdings. The 2020 amendment to the Act marked a significant shift in policy by easing restrictions on agricultural land purchases, allowing non-agriculturists to invest in farmland. Key provisions, including Sections 79A, 79B, and 79C, which restricted land ownership to genuine farmers, were repealed. This change is anticipated to modernize agriculture and increase investment, thereby boosting agricultural output and state GDP. However, the amendment has also raised concerns about its impact on small and marginal farmers, potential artificial inflation of land prices, and threats to the rural economy and food security. The debate centers on balancing economic growth with the protection of traditional farming communities as Karnataka adapts to these new land ownership dynamics.

The Karnataka Land Reforms Act, introduced in 1961, aimed to ensure equitable access to farmland ownership. The Act sought to consolidate and standardize the laws concerning the purchase and holding of agricultural land, grant ownership rights to tenants, establish occupancy rights, and impose a ceiling on landholdings within the state of Karnataka.[1]

The Karnataka Land Reforms Act was revised in 2020 to reflect shifts in the state's policies and viewpoints about land ownership and use. The goal of the Karnataka Land Reforms (Amendment) Ordinance, 2020 (Karnataka Ordinance No 13 of 2020), dated July 13, 2020, is to ease the process of opening up agricultural lands for greater investments, free from any restrictions formerly imposed by the Sections 63, 79A, 79B, and 80 of the Act.

The Act's Section 63(2) and Proviso have been revised by the Ordinance, increasing the maximum extent of agricultural land that can be owned or purchased from 10 to 20 units. Both individuals without a family and families consisting of four members are subject to this new criterion. Families with more than five members are permitted an additional four units of land per person, up to a maximum of forty units.

Note: One unit is approximately equal to 5.4 acres

The Karnataka Land Reforms Act's most important amendment is the abolition of this section. The Act has been amended to remove Sections 79A, 79B, and 79C, which formerly prohibited non-agriculturists from purchasing, possessing, or owning agricultural land in the State of Karnataka. Thus, it is now possible for non- agriculturists earning more than INR 25 lakhs to own and possess agricultural land in Karnataka.

Note: Notwithstanding the foregoing, any pending cases relevant to sections 79A, 79B, and 79C and their consequences are alleviated, and instances that have previously been resolved prior to the Ordinance's publication shall not be impacted.

Section 80, which prohibited the sale of agricultural land to non-agriculturists, has been lifted, and the prohibition now applies to the transfer of specific types of land. For example, Class A land that is irrigated using dam water is restricted to agricultural use. Therefore, even though certain limitations have been lifted, there are still particular circumstances to take into account while working with particular kinds of agricultural property.

According to Section 81 of the Act, mortgages of agricultural land are only permitted in the name of certain institutions, such as co-ops, financial institutions, and any company as defined by Section 3 of the Companies Act, 1956, wherein the State or Central governments, or both, own at least 51 percent of the paid-up share capital.

The recently incorporated provision in the Act guarantees that any amendments to the legislation will not affect anyone belonging to the Scheduled Caste or Scheduled Tribe communities. This protection was established by the Karnataka SC/ST Act of 1978, also known as the Prohibition of Transfer of Certain Lands. Consequently, the rights to land awarded to members of SC/ST communities under the Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of Certain Lands) Act, 1978, shall be unaffected by any such subsequent revisions made to the Act.[4]

In order to discourage land hoarding, the Act placed a number of limitations on an individual's ability to purchase agricultural property in the State of Karnataka. Therefore, by eliminating Sections 79A, 79B, and 79C of the Act, allowing non-agriculturists to buy agricultural land, and doing away with the previous provisions' income threshold, the Ordinance seeks to liberalise this land-holding structure.

Therefore, irrespective of the revenue that such individual(s) derives from non-agricultural sources, any individual (or a trust, firm, organisation, or educational institution) will be qualified to purchase agricultural land under the terms of the Ordinance.

On September 28, 2020, the Karnataka State Assembly passed the modification to the Karnataka Land Reforms Act by voice vote. It is anticipated that this shift will make it easier to use cutting-edge, contemporary farming methods, which could increase agricultural output. The amendment's major feature is the dismissal of 13814 cases that were still ongoing and involved violations of Sections 79A and 79B.[5]

The amendment has made it possible to invest more in crop production, which has raised food grain yields for both local consumption and agricultural exports. The amendment will have a favourable effect on the state GDP and increase revenue from the agriculture sector while addressing the growing demand for food brought on by population growth. The Act significantly boosts the infrastructure, tourism, transportation, and hospitality sectors by encouraging more capital and labour to be invested in these areas. Anyone who has a strong interest in agriculture, regardless of occupation or financial status, can now buy farmland in Karnataka and realise their ambition of owning a piece of land.[6]

Another way that black money is being directed towards land investments through the 2020 amendment to the Land Reforms Act is to inflate land values artificially. The amendment did not help farmers, and it is predicted to ruin rural life and the rural economy, especially harming small and marginal farmers. Food shortages may also arise.[7]

In conclusion, the 2020 amendment to the Karnataka Land Reforms Act represents a significant shift in land ownership policies, opening up agricultural land to a broader range of investors. While this change aims to modernize agriculture, increase agricultural output, and boost the state’s GDP through enhanced investment, it has also sparked controversy. The removal of Sections 79A, 79B, and 79C has enabled non-agriculturists, including those with substantial incomes, to purchase farmland, raising concerns about the potential impact on small and marginal farmers. Critics argue that this could lead to the artificial inflation of land prices and threaten the rural economy and food security. However, proponents believe that increased investment and the introduction of advanced farming techniques will benefit the agricultural sector. As Karnataka navigates these changes, the balance between economic growth and the protection of traditional farming communities remains a critical consideration.