Himachal Pradesh’s debatable land law, Section 118 of the Tenancy and Land Reforms Act, 1972, which is considered a protective wall for local farmers, is now on the verge of its most significant transformation in five decades. The state government has initiated a process to relax key provisions of the Act under the Ease of Doing Business framework, sparking both optimism and concern across the state.
The Revenue Department has already presented a detailed proposal to the state Cabinet, and a team of officials has been constituted to recommend changes aimed at making the law more business-friendly. The government argues that the stringent restrictions imposed by Section 118 have hindered investment, limited job opportunities, and discouraged youth entrepreneurship in the state.
But critics warn that diluting this historic safeguard could open the door to large-scale land transfers, threatening Himachal’s fragile social and ecological balance.
From Protection to Policy Dilemma
Section 118 was enacted by Dr. Y.S. Parmar, Himachal’s first Chief Minister, to protect the state’s limited agricultural land from being purchased by outsiders. Under this provision, non-Himachali residents or non-agriculturists cannot buy land without explicit government permission. The intent was clear — to prevent exploitation of small farmers and ensure that the land remained with the people who depended on it.
However, over time, the same law that shielded farmers has become a roadblock for local entrepreneurs, cooperatives, and start-ups. Even Himachali youth forming companies or Farmer Producer Organisations (FPOs) are treated as separate entities under the law and must seek permission under Section 118 to acquire land. This bureaucratic tangle has frustrated many young business owners who find it easier to invest in neighbouring states like Uttarakhand or Haryana.
Pressure for Reform
The push for change has gained momentum following repeated observations by the Government of India, which has urged the state to simplify land-related laws under the Ease of Doing Business initiative. Institutions such as NABARD and cooperative banks have also conveyed their inability to fund agriculture and horticulture ventures due to the procedural complexities of Section 118.
During the budget session in March 2025, Chief Minister Sukhu promised to simplify “sections that obstruct economic activity,” and the latest move appears to be a step in that direction. The proposed reforms include:
- Allowing a longer window for land utilisation before it reverts to the government.
- Empowering Deputy Commissioners to grant approvals instead of routing all cases through the state government.
- Introducing penalties instead of land confiscation in case of non-utilisation within the specified period.
- Removing the dual permission process for land purchase and construction by bringing in a single-window clearance system.
Supporters of the reform argue that these steps will make Himachal more attractive for investment, especially in sectors like tourism, education, and technology, without compromising local ownership.
The Risk Beneath the Reform
Yet, not everyone is convinced. Several farmer organisations, social activists, and retired bureaucrats have warned that relaxing Section 118 could gradually erode the very identity of Himachal’s land laws. “This section was not merely about land — it was about preserving Himachal’s demographic and ecological integrity,” said a former revenue officer who served during the 1980s. “Once we start loosening it, the pressure from investors will be immense, and local farmers could be the first to lose.”
There are also concerns that increased external investment could trigger land speculation, drive up property prices, and make it harder for rural youth to afford agricultural land. Some experts point out that earlier amendments — such as the doubling of stamp duty from 6% to 12% for land transactions under Section 118 — were meant to curb speculative buying, not pave the way for broader liberalisation.
Finding the Balance
The state government insists that the reforms will be implemented carefully, to empower Himachalis rather than outsiders. Officials suggest that the essence of Section 118 — preventing unrestricted land transfer — will remain intact, while easing procedural barriers that stifle business activity.
Still, the debate reflects a deeper tension between economic liberalisation and regional protectionism. For many in Himachal, land remains not just an asset but a symbol of identity and stability. Any change to its legal framework, they believe, must be approached with utmost caution.
As the state prepares to rewrite one of its most defining laws, the question remains: can Himachal modernise without compromising its roots? Section 118, once a shield for its farmers, now stands at the crossroads of preservation and progress — and the choices made today will shape the state’s economic and social landscape for decades to come.
