Centre's reform nudge to States resulting in less land wastage, increased digitisation
The Centre's attempts to nudge States into implementing land and industrial reforms have resulted in a reduction in land wastage and a sharp jump in digitisation of land records, data from the Finance Ministry show.
The Centre, in 2020, launched the Scheme for Special Assistance to States for Capital Investment, under which it provided States 50-year interest-free loans for capital investment.
While a portion of these loans were untied, a significant part was made available to the States only if they undertook particular reforms relating to road construction, digitisation, optical fibre installation, urban reforms, and disinvestment and monetisation.
In the first year, the scheme was capped at ₹12,000 crore worth of loans, which has grown over the years to ₹1,50,000 crore in 2025-26.
According to data shared by the Finance Ministry, 22 States have carried out reforms in building bye laws for industrial and commercial plots. Of these, 18 States have reduced land wastage in factory plots due to outdated setbacks and parking regulations to less than 30%.
Previously, companies had to dedicate about half of their factory land to parking space and setbacks, which are buffer areas between the factory and the boundary wall. By updating these regulations, states have managed to reduce this land wastage.
In addition, the data show 12 States have doubled the built-up area permitted for flatted factories (multi-storey industrial buildings), and eight States have increased their Floor Area Ratio (FAR) for commercial buildings.
Notably, the information shared also shows that 90% of cadastral maps — showing details of land ownership boundaries — have been digitised. Additionally, 30% of land parcels (22 crore out of 76 crore) have been assigned Unique Land Parcel Identification Numbers (ULPIN) so far, and 91% of the Records of Rights (35 crore out of 38 crore) have been digitised.
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