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Rich club parallel in hands-off land advice-Basant Kumar Mohanty

A parliamentary panel has cited the practice in developed countries to reject a key provision in the land acquisition bill allowing the government to acquire plots for private companies.

The committee said in the US, Japan and Canada, land is purchased by private enterprises, not acquired by the state. Why should India continue this “anomalous practice”, asked the parliamentary standing committee on rural development in its report on the Land Acquisition, Rehabilitation and Resettlement (LARR) Bill.

Headed by BJP MP Sumitra Mahajan, the committee said there should also be no land acquisition in tribal-dominated Scheduled-V and Scheduled-VI areas except in unavoidable situations.

The bill says the government can acquire land for a public purpose. The scope of public purpose includes private companies and public-private-partnership projects where the benefits largely accrue to the public.

But the committee pointed out the way things were done in developed countries.

On June 23, 2006, then US President George W. Bush issued an executive order mandating the government to acquire land only for benefiting the general public, not merely for the purpose of advancing the economic interest of private parties.

Similarly in Canada, the Canadian Expropriation Act of 1985 allows expropriation but only on an exceptional case-by-case basis for public work, not to further commercial interest of entities. There is no provision in European Union for land acquisition by the state for private enterprises.

In Japan, for a key infrastructure project that sought to expand Tokyo’s Narita International Airport, the mode of obtaining land was through extensive negotiations and higher compensation for those who wanted to sell.

In China, all land is owned by the state, which allots plots for purposes determined by it.

“It is clear that in the developed democracies, the norm is private purchase of land, not state acquisition. In India alone, the ‘public purpose’ is defined to include virtually every form of enterprise in the Land Acquisition Act of 1894,” the committee said.

“…why should India in 21st century persist with this anomalous practice? Therefore public purpose in the bill should be limited to linear infrastructure and irrigation, dams and social sector infrastructure like schools, drinking water projects and hospitals etc constructed at state expenses,” it said.

It is not clear if the committee has touched upon the impact of high compensation on viability of projects in countries like India where the market for many products is still sensitive to price.

The committee’s stand has been welcomed by the Trinamul Congress, whose chief Mamata Banerjee has been against such acquisition.

“The industrialist believes in free market. They do not share their profit with government. Then why should the government acquire land for them? If you believe in free market, then buy land from the free market,” said Trinamul MP D. Bandopadhyay.

However, MPs from other parties differed. “The private companies are also doing public good. They are setting up schools, hospitals and other amenities for the public. If the government does not interfere, private companies will find it difficult to start these facilities,” BJD MP Bhartuhari Mahatab said.

There is a provision that the rehabilitation and resettlement benefits would be provided in case of specified private purchase of land equal to or more than 100 acres in rural areas and equal to or more than 50 acres in urban areas. The Madhya Pradesh and Himachal governments opposed this but the panel backed it.

The committee said as far as possible, there should be no land acquisition in scheduled areas dominated by the tribal people. Where public-purpose projects are unavoidable, special provision should be made for increased compensation and resettlement and rehabilitation. The affected tribals should be relocated to a similar ecological location.

The provisions of the LARR Bill do not override those in the Atomic Energy Act, the Cantonments Act, the Land Acquisition Mines Act, the National Highway Act, the Special Economic Zones Act, the Coal Bearing Areas Acquisition and Development Act and the Railways Act.

The committee said 95 per cent of land acquisition by the central government would be outside the scope of the land acquisition law since these 16 central acts are exempt from this bill. So the committee opposed the exemption.

Industry feels the recommendations would adversely impact industry, especially the manufacturing sector. “…the recommendations.. do not seem to be taking into account the need of industry, thereby, leaving it to fend for itself,” said CII president Adi Godrej. “The recommendations will make land acquisition more complex and difficult, leading to slower growth in industry and therefore, the economy.”

Assocham said the recommendations needed consultation with industry as their implementation would affect manufacturing zones the government plans to set up.