Budget 2024: Centre to digitize land records, bring in labour reforms as part of next generation of reforms

Finance minister Nirmala Sitharaman told Parliament on Tuesday that the Centre will provide fiscal support to incentivize states to introduce land and labour reforms as part of the broader economic policy of the government.

These reforms will take in land administration, planning and management, and urban planning, usage and building bylaws. For rural land, the government plans to assign unique identification numbers and establish a new land registry that will be linked to a farmer registry to help credit flow.

“We will formulate an economic policy and will initiate and incentivize reforms for improving productivity of factors of production and facilitating markets and sectors to become more efficient. These reforms will cover all factors of production—namely land, labour, capital and entrepreneurship—and technology as an enabler of improving total factor productivity and bridging inequality," Sitharaman said.

Incentivized for completion

“Land-related reforms and actions, both in rural and urban areas, will cover land administration, planning and management and urban planning, usage and building bylaws. These will be incentivized for completion within the next three years through appropriate fiscal support. For promoting competitive federalism and incentivizing states for faster implementation of reforms, I propose to earmark a significant part of the 50-year interest-free loan (meant for states)." she said.

“Rural land-related actions will include assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, digitization of cadastral maps, survey of map sub-divisions as per current ownership, establishment of land registry, and linking to the farmers registry. These actions will also facilitate credit flow and other agricultural services," the finance minister added.

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On labour reforms, she said, “Our government will facilitate the provision of a wide array of services to labour, including those for employment and skilling. A comprehensive integration of e-shram portal with other portals will facilitate such a one-stop solution. Open architecture databases for the rapidly changing labour market, skill requirements available job roles, and a mechanism to connect job aspirants with potential employers and skill providers will be covered in these services."

Mint earlier reported that the budget may introduce digital cards for farmers with geo-tagging, containing their land details.

Facilitating credit flow

These actions will facilitate credit flow and other agricultural services, as per the finance minister's budget speech. The linking of land and farmer registries to help credit flow into agriculture aligns with the suggestions made by chief economic advisor V. Anantha Nageswaran in the economic survey for FY24 released on Monday.

The wider economic link was drawn out in February when the then rural development minister Giriraj Singh said that digitization of land records and registrations will likely improve India's GDP by about 1.5 percentage points.

“Completing the digitalization of land records will not only decrease the extensive backlog of land dispute cases in courts but also significantly improve the country's ease of doing business ranking," Singh had said.

In the FY25 budget, the rural development ministry has been allocated ₹1.77 trillion, including ₹2,667 crore for the land resources department, against ₹1.71 trillion of revised estimates for FY24. The department's FY24 revised budgetary allocation was ₹1,898 crore, as per the budget document.

 

However, some experts were sceptical about the proposals announced on Tuesday.

“This has been going on for decades. Around 90% of holdings are small and marginal, so their digitization may be of little help. These landholders earn less than ₹10,000 per month. Aggregation of their produce may be marginally helped by digitization. The more important issue is their corrections so that they are up to date," said Siraj Hussain, former union agriculture secretary.

Neeraj Hatekar, economist and professor at Azim Premji University, said, “The intentions of the government in land and labour reforms are pure. But the devil lies in the details. There is no clarity about how the government will gather farmer- and farmland-related data, let alone (how it will) digitize it. While digitization of data may be beneficial to farmers, these land reforms seem a little difficult to execute."

“There is no recent data about farmers or farmlands – the last agriculture survey was conducted in 2015. There are gaps in this plan about how the government will manage to collect data to digitize it."

The economic survey hailed the presence of primary agriculture credit societies (PACS), which facilitate various government schemes for farmers. The latest land reforms announced in Tuesday's budget may be transmitted via such co-operative bodies to pass on the benefits to farmers. These benefits are expected to bring more transparency in land records, helping marginalized identities like women.

Land records in urban areas will be digitized with GIS mapping. An IT-based system for property record administration, updating, and tax administration will be established, as per the budget address. “These will also facilitate improving the financial position of urban local bodies," the finance minister said.

Data to come under DPI

The Union government is also planning to bring agricultural data including land and farmers' data within the ambit of digital public infrastructure (DPI) over the next three years, the finance minister announced in her budget speech.

“The establishment of a DPI for agriculture will revolutionize the way we approach farming, with digital crop surveys and the issuance of Kisan Credit Cards under the Jan Samarth initiative paving the way for a tech-enabled agricultural landscape," said SK Chaudhary, Founder & Director at Safex Chemicals Ltd.

In the FY25 budget, the rural development ministry has been allocated ₹1.77 trillion, including ₹2,667 crore for the land resources department, against ₹1.71 trillion of revised estimates for FY24. The department's FY24 revised budgetary allocation was ₹1,898 crore. As far as the labour and employment ministry is concerned, it has been given ₹22,531 crore for FY25 against ₹12,521 crore in revised budgetary estimates for FY25, as per the budget document.