The Baseless Development

Why Land Acquisition Really Matters? And What Could Be Done About It?

Don't Take My Land

India is growing at over 8% annually. To fuel this growth consistent supply of huge amount of resources are required. Whether it's fuel, minerals or land, everything is required at a scale that has never been experienced before. But there's a common problem that is holding all these from being input to the development cycle and that is land. The huge population has made the world's 7^th largest country a 'People Surplus, Land Deficit Country'. Adding to the problem is years of inefficient handling of land.

Since early 2000's, India's frantic pace of growth has ensured that the land and their owners are exploited to a huge extent. Earlier unawareness among farmers & their hope to benefit has largely ensured peaceful industrialization. But after years of experience & feeling of being left out they now consider industrialization a monster, which just gobble up their land. They feel that the sole beneficiaries of the whole process are corporates, who in tandem with local government officials acquire much more land than required. A waste of a precious resource that must be stopped, immediately. The proposed 'Land Acquisition, Rehabilitation and Resettlement(LARR) Act, 2011' is a good step in that direction and I am sure that it will induce some discipline among the buyers.

The bill proposes that for every acquisition of more than 100 acres of land, the consent of atleast 80% locals should be taken. Industry fears that this could make 'Land Acquisition' a tough and slow process. But I think once completed, projects can be executed at much faster pace with less probability of people protesting thereafter. Also the compensation clause will increase the cost of projects for sure but it will reduce the tendency of businesses to acquire land in much larger quantum than required and force them to use it efficiently. However there should be one modification in the bill, instead of high one time payment monthly compensation amount should be increased from Rs2000/acre/month. As experienced till now compensation beneficiaries spend lavishly in initial years and due to lack of any skills other than farming, they face a tough question for survival once that compensation finishes. The increased regular compensation will ensure that those displaced are assured of regular income. In addition guaranteed job to a member of each displaced family will make them live a respectful life.

Share It, Don't Capture It

But profit sharing can be tricky and difficult to implement, since locals lack resources to effectively audit the books of mining companies and thus probability of frauds will be high. Also the profits from mining will come slowly after the projects go on-stream. Also compensation in the form of monthly allowance, profit sharing, taxes and one time allowances may render the projects unviable. To solve this, a 'Rehabilitation Authority' should be set up which would be the sole organization responsible for rehabilitation and resettlement of displaced people and will work on non-profit basis. The organization will be responsible for facilitating all the acquisition in future from its own corpus, which will be funded by profit sharing and one time compensation from corporates who acquire land.

There are more such problems with the proposed bill, which has to be looked into. However it's clear that whatever government do, it has to do it fast and has to do it right, it can't experiment on that count or else India would risk losing it's competitive and demographic edge.