HP Assembly in session: Overhaul of land law to boost real estate & coop expansion

Revenue Minister Jagat Singh Negi on Tuesday introduced substantial amendments to Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972, marking one of the most significant attempts in recent years to liberalise the state’s land laws. The government argues that the socio-economic landscape has changed dramatically since the legislation was first enacted and the current framework often hampers genuine investment.

According to the Statement of Objects and Reasons, several investors have struggled to complete projects within stipulated timelines due to circumstances beyond their control. To address such delays, the amended law proposes a structured mechanism allowing time extensions on payment of a prescribed penalty, a move expected to bring flexibility and predictability for businesses investing in the state.

In a notable shift aimed at revitalising rural economies, the Bill seeks to exempt short-term building leases of up to 10 years from the purview of Section 118. This exemption is expected to ease commercial activity in villages, particularly for enterprises that require temporary operational spaces.

The government has also moved to significantly open the real-estate sector. Currently, transfer of land to non-agriculturists is heavily restricted through various modes, including sale, gift, lease or will. The amendments propose extending the existing exemption granted to the Himachal Pradesh Housing and Urban Development Authority (HIMUDA) to subsequent purchasers as well. Additionally, non-agriculturists will now be allowed to purchase completed buildings or flats from private real-estate developers, something previously not permitted and a long-standing demand of the industry.

Another key reform concerns cooperative societies, which include nearly 20 lakh agriculturist members across Himachal. Despite being farmer-led, these societies are legally barred from purchasing land as agriculturists or receiving land transferred by their members. The Bill now proposes allowing cooperatives composed solely of agriculturists to acquire land without seeking permission under Section 118. This change is expected to unlock new avenues for rural enterprises, employment generation and community-driven development.

Minister Negi said the amendments are designed to simplify the legal architecture, promote investment and strengthen local economies at the village level.

Unlocking its soil

• The proposed overhaul of Section 118 signals Himachal's intention to rebalance regulation with opportunity. By easing timelines for investors, freeing cooperative societies to buy land and opening real-estate access to non-agriculturists, the state is positioning itself for wider economic participation
• Rural communities, long constrained by rigid land rules, stand to gain from fresh investment and new ventures. For businesses, the message is equally clear: Himachal is ready to welcome projects, without compromising its identity, but with a renewed appetite for growth