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Gujarat panel suggests leasing out wastelands to shore up economy

Rutam Vora Ahmedabad | Updated on June 16, 2020 Published on June 16, 2020

The Committee has recommended the government to identify wastelands in districts such as Kutch and create a land parcel at village level for auction to registered companies that are involved in food processing

Hasmukh Adhia-led committee eyes job creation, tax revenues from food processing companies

In a first for Gujarat, the State government has been advised to lease out its wastelands to private food processing companies, with an aim to shore up the economy that’s facing dwindling revenues due to the Covid-19 crisis.

The high-powered committee appointed by Chief Minister Vijay Rupani for the State’s economic revival has made several medium-term recommendations aimed at strengthening the rural economy. It submitted its final report to the government last week.

Chaired by former Union Finance Secretary Hasmukh Adhia, the committee has recommended that the government identify wastelands in districts such as Kutch and create a land parcel at the village level for auction.

Sources said the report suggested that such wastelands be auctioned for 10-35-year leases exclusively to registered companies involved in the food processing industry, to facilitate vertical integration of agricultural produce.

Auction, tax revenues

“This will not only create immediate auction revenues for the Government of Gujarat and employment for local youth, but also a possibility of taxing agricultural income of those companies regularly,” noted the report, accessed by BusinessLine. The Adhia committee has suggested the Rural Development Department and Revenue Department of the State work in close collaboration with a target to cover at least 10 per cent of the total geographical area over the next two years.

Auctioning of wasteland is seen as an innovative way to push employment and value-addition of agri produce at the local level.

Another suggestion for a major reform came for corporate and cooperative farming in the State. The committee has recommended allowing the sale or free leasing of agricultural land. This is meant to ensure better land allocation and increase the productivity of the scarce land resource.

“Land market imperfections arising out of restrictive legislation should be removed at the earliest. The corporate farming needs to be encouraged by easing of land ownership and land use regulations i.e. such that the farmers can retain ownership but lease out their land with or without labour for a longer term to receive either a share in the profits and/or a fixed income,” it said, adding that credit availability should be improved for sharecroppers and agricultural labourers as well. The organised credit sector should provide credit against the farm produce or output rather than land or inputs, it added.

Call for good agricultural practices

Besides suggesting skill development, strong quality testing and robust supply-chain infrastructure, the committed has also called for a “Good Agricultural Practices” certification by an independent agency to infuse an added level of trust in the produce for domestic sales and exports.

The final recommendation report, besides covering the overall rural economy, farm employment and entrepreneurship, also sought to encourage the blue economy by creating a seawater-based ecosystem across the State’s coastal line for socio-economic development in the region.

The government has also been advised to aggressively take up smart connectivity and digital adoption in villages. It has set a target to cover at least 20 per cent of the potential villages and towns in the next two years.

Published on June 16, 2020
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