NEW DELHI: The Centre’s interest-free 50-year soft capex loans have yielded good results with states modernising building codes to push industrial growth, and digitisation of land records. These reforms are expected to boost rural economy by reducing litigation and increasing access to credit.
The Scheme for Special Assistance to States for Capital Investment (SASCI) has evolved from an initial Rs 12,000 crore in 2020-21 (during Covid-19) to Rs 1,50,000 crore in 2024-25, making the SASCI into a policy lever that incentivises critical reforms across states. Of the Rs 1,49,484 crore capex loans released to the states in FY25, half of that was for various reforms or project-linked as outlined in the scheme.
Under the scheme, untied funds are for priority state projects, while tied funds are conditional on implementing specific reforms. The Centre provided Rs 5,000 crore each to incentivise reforms in urban land reforms and rural land reforms in FY25.
As many as 22 states carried out reforms in building bylaws for industrial and commercial plots. While 18 states have reduced land wastage in setbacks and parking for standalone factories to less than 30%, 12 states doubled the built-up area permitted for flatted factories and 8 states increased Floor Area Ratio (FAR) for commercial buildings to 5 in normal areas and 7 in Central Business Districts, according to finance ministry.
These seemingly technical changes translate to significant economic outcomes with more efficient land use, increased manufacturing capacity, and enhanced urban productivity.
Perhaps the most far-reaching reforms have occurred in land administration in rural areas through digital transformation of land record that directly impact rural citizens by reducing land disputes, minimizing corruption, and streamlining agricultural credit access.
As much as 90% of cadastral maps now geo-referenced nationwide and 30% of land parcels (22 crore out of 76 crore) assigned Unique Land Parcel Identification Numbers (ULPIN), the finance ministry noted.
Madhya Pradesh now has fully online and paperless registry processes with five states have initiated making legacy records available online and searchable by citizens. As much as 91% of Records of Rights (35 crore out of 38 crore) digitised.
For rural land reforms, states had to achieve several milestones to receive incentives including sub-division of all land parcels as per current ownership, assignment of unique land parcel identification number (Bhu-Aadhar) and geo-referencing of all land parcels, making land registry process completely online and inter-link with other systems and saturation of land records and modernisation of revenue court case management systems.
For urban land reforms, incentives were provided for the digitisation of land records, using GIS mapping, and the establishment of an IT based system for property record administration, updating, and tax administration.
Land reforms are the most critical part for the country as it moves towards becoming the third-largest economy in the world in the next three years and aims to become a developed nation by 2047.
Source: The Financial Express
