Long-term mutual benefits will make land acquisitions fruitful

About 120 years ago when India enacted the land acquisition law, it was under British control. Civil rights were limited. The new law that is in parliament seeks not just to correct the wrongs of the past, but also lay the rules for a conflict-free future.

Despite a fair, new law, this will remain a challenge for central and state governments. Among all the natural resources available to a country, land is the most finite. And as population increases, the availability of land for each citizen shrinks.

Increasing consumer aspirations drive utilities and companies to create more products and services. The pressure to acquire land is immense. The power of consumption creates an overwhelming and insatiable need for land.

The new law is awaiting passage in parliament even as political parties bicker over a consensus. In truth, no land law can satisfy all stakeholders. If political leaders stem the acquisition of land for the needs of a growing population, they will contribute to creating scarcities in the economy.

If government and private sector go for unbridled acquisition of land, they will create millions of poor, homeless people who will create serious social disruptions.

Balance is never easy and in the case of the land bill, it has been particularly tough.

Perhaps, the best part of the bill is its name. The full name of the proposed law is Land Acquisition, Resettlement and Rehabilitation Bill. Implicit is the fact that land acquisition will not be allowed without concomitant efforts to create livelihood and habitat for the people whose land is taken.

The challenge now is in the implementation and the intent. Forcible acquisition of land by government should be minimised. Corporations that sing for free market norms, must allow the market to determine land prices.

Much will depend on corporations that are seeking to acquire land. They will have to play with a straight hand to offer due compensation and ensure proper rehabilitation.

Creating employment opportunities for the displaced would be a critical cornerstone.

Despite all the laws, land owners will welcome acquisition if they see a long term improvement in quality of life.

Smart companies ensure that they invest in skill building, health facilities, education in the communities that they operate in. Unfortunately, such companies are few.

Most still go for the short term option of immediate return on investment. They prefer to grease palms rather than give communities their due. This approach works for a short while at best. Soon enough the sense of loss dawns on the people and resentment against the acquirer will build up creating festering tensions.  Corporations that acquire land but delay rehab or a new project must be penalized swiftly. 

The key divisive issue is of acquiring fertile agricultural land for industrial projects. Ideally, fertile land should not be used for factories. Ideally, such land should be used for farming and processing of agro products.

At the same time, desolate barren land that is far away from basic facilities will be deemed useless by most acquirers. The solution lies in creating value in barren land. Traditionally, the government has persuaded companies to invest in remote or barren areas with tax breaks. This has not worked very well. Remote and barren locations can be made more attractive by improving facilities in the region. Road and power connectivity for such land will automatically bring in investors.

Once passed, this law can succeed only when corporations and communities find long term mutual benefit in land acquisition.

The author is the former editor of a news TV network. He tracks India’s political economy and its engagement with the world.