Impact on Ease of Doing Business with Special Reference to Section 118 (HPTLRA-1972) on Entrepreneurial Intentions

Abstract

Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act, 1972 (HPTLRA) embodies a distinctive framework for land regulation, aiming to safeguard the rights of local agricultural communities while simultaneously supporting the State’s developmental aspirations in this ecologically fragile hill terrain. Over the years, this provision has undergone several amendments, judicial scrutiny, and administrative refinements to maintain a balance between its original purpose and the need to encourage investment and economic growth. This paper examines Section 118's legal framework, incorporating recent judicial interpretations, legislative amendments, and procedural updates. Significantly, the Honourable Himachal Pradesh High Court and the Honourable Supreme Court have upheld the validity of Section 118 while providing clarity on its scope and limitations in specific cases. Concurrently, the State Government has introduced reforms, including streamlined approval processes, policy clarifications, and digital processing systems, to facilitate genuine investors in conducting business in Himachal Pradesh without compromising the law’s objectives. This analysis presents an updated overview of the implementation of Section 118 and suggests recommendations to further harmonise regulatory compliance with the ease of doing business. The findings underscore that Section 118 functions not as a rigid impediment but as a flexible, adaptable framework. Its evolution offers valuable insights for other Indian states grappling with the dual objectives of local protectionism and economic liberalisation. The paper concludes that sustained policy innovation, legal clarity, and institutional accountability are essential to realising the full potential of Section 118 as a tool for inclusive development.