Karnataka notifies major land reform rules to boost ease of business

Karnataka eases land rules: small industries & renewable projects need no conversion; urban farmlands auto‑convert online with strict penalties for misuse

The Karnataka government has introduced sweeping reforms to simplify land use regulations, marking one of the most significant changes in decades. Under the newly‑notified Karnataka Land Revenue (Amendment) Rules, renewable energy projects and small‑scale industries are exempted from obtaining prior permission to operate on agricultural land.

Previously, landowners were required to seek approval from the deputy commissioner to divert farmland for non‑agricultural purposes, a process widely criticized as cumbersome and prone to corruption. The new rules eliminate this requirement for industries established on agricultural land up to two acres, particularly small‑scale and agro‑based enterprises. Renewable energy projects such as solar, wind, hybrid systems, energy storage, biomass, and waste‑to‑energy facilities are also covered under the exemption.

Another key reform is the introduction of auto‑conversion of agricultural lands located within urban master plans. If farmland falls under a designated residential or commercial zone in a master plan, it will automatically be treated as converted for non‑agricultural use. This change removes the need for a separate conversion step, allowing landowners to directly apply for layout or project approvals.

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To further streamline the process, the government is developing an online system for land conversion applications. Applicants will be able to submit requests digitally, and deputy commissioners will be required to issue conversion orders within 30 days. If no order is issued within the stipulated time, the application will be deemed provisionally approved.

The reforms are designed to promote ease of governance and reduce bureaucratic hurdles for entrepreneurs and investors. However, strict penalties have been introduced to prevent misuse. Violations of the relaxed conversion norms will attract a fine of ₹1 lakh, along with an additional penalty of ₹2,500 for each day of continued violation. These penalties will be recorded as encumbrances in the official land records, ensuring accountability.

By removing procedural bottlenecks and encouraging investment in renewable energy and small‑scale industries, the state aims to foster sustainable development while supporting urban growth. The reforms are expected to significantly reduce delays, improve transparency, and enhance Karnataka’s appeal as a destination for business and innovation.

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