Himachal Moves to Ease Land Laws: Major Section 118 Overhaul to Boost Real Estate and Rural Cooperatives

During the ongoing session of the Himachal Pradesh Assembly, Revenue Minister Jagat Singh Negi on Tuesday introduced sweeping amendments to Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972—one of the most significant steps in recent years toward liberalising the state’s land policies. The government maintains that Himachal’s socio-economic conditions have changed substantially since the Act was enacted, and the current provisions often deter genuine investment.

According to the Statement of Objects and Reasons, many investors have faced difficulties completing projects within the stipulated timelines due to factors beyond their control. To address this, the proposed amendments introduce a structured mechanism for granting time extensions on payment of a prescribed penalty. The move is expected to offer businesses greater flexibility and certainty when investing in the state.

In a major shift aimed at energising rural economies, the Bill proposes that short-term building leases of up to 10 years be exempted from Section 118 restrictions. The government believes this will encourage small-scale commercial activity in villages, especially for enterprises that require temporary operational spaces.

Another key reform targets the real-estate sector. At present, land transfers to non-agriculturists—whether through sale, gift, lease or will—are tightly restricted. The amendments propose extending the existing exemption granted to the Himachal Pradesh Housing and Urban Development Authority (HIMUDA) to subsequent purchasers as well. Non-agriculturists will also be allowed to buy completed buildings or flats from private real-estate developers, addressing a long-pending demand within the industry.

The Bill further seeks to strengthen cooperative societies, which collectively include nearly 20 lakh agriculturist members across Himachal Pradesh. Despite being farmer-led, these cooperatives are currently barred from purchasing land as agriculturists or accepting land transferred by their members. The proposed changes will allow cooperatives composed exclusively of agriculturists to acquire land without seeking Section 118 permission. The government expects this to open new opportunities for rural enterprises, job creation and community-driven development.

Minister Negi said the amendments aim to simplify legal processes, attract investment and support economic growth at the grassroots level.