The BJP government in Karnataka has passed an amendment to a key section of the Karnataka Land Reforms Act, 1961, to allow industries to sell agricultural land converted for industrial purposes. The move has been described as an effort to attract investments. The Opposition, however, called it a means to facilitate “real estate mafia”.
The amendment was a promise made to investors by Karnataka Chief Minister B S Yediyurappa following a visit to the World Economic Forum earlier this year.
A provision in the Act prevented industries from selling agricultural land — bought by them for industrial purposes — and required that the land be returned to the government at no cost in case of failure of the enterprise or inability of the entrepreneur to carry on with the industry.
The Karnataka Land Reforms (Amendment) Bill, 2020, allows industries to sell agricultural land converted for industrial use by the government after a period of seven years of the industry’s operation for the purpose of continuation of the same enterprise.
“It is considered necessary to amend the Karnataka Land Reforms Act, 1961, to provide for permission for sale of the lands exempted under Section 109 after utilizing such land for the period of seven years for the purpose for which it was permitted, to tide over the financial crisis to other company or organization for the same purpose to which it was permitted earlier,’’ the Bill states.
The changes to Section 109 of the Karnataka Land Reforms Act, 1961, were passed in the Assembly on Thursday even as the Congress staged a walkout.
Law Minister J C Madhuswamy said that people setting up industries on agricultural land that has been converted for industrial use often have no options if the industry becomes sick after a few years, and that allowing sale of land for the industry to continue will help the investor avert bankruptcy.
Revenue Minister R Ashok, who piloted the Bill, said provisions such as those under Section 109 do not exist in states like Maharashtra, Andhra Pradesh and Tamil Nadu, making them more attractive to investors.
Former Congress industries minister R V Deshpande suggested that industries should be allowed to sell only the portion utilised for industrial purposed instead of the entire plot.
Former Speaker Ramesh Kumar said the move will benefit the land mafia more than the industries.
Senior Congress leader H K Patil argued that some amount from the proceeds of sale must go to the original land owner.
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