Land Acquisition: An hurdle to Infrastructure development


A sigh of relief made its way through the farmlands of Singur as Mamata finally managed to return their rightly owned land to the farmers. An array of disappointment however marred the young of the same community who may have had a glorified vision of finally moving towards an industrial outlook that in some way would improve the environment they resided in. Land acquisition, the heated topic of debate across state governments and developmental boards has pricked the infrastructural development of the country in such a way that its growth is at questionable quarters.

One of the most prickly nettles for governments in India today is land acquisition for industry. The complex and ambiguous routines involved in Land acquisition by the government for public projects has adversely affected the infrastructural development.  The Land Acquisition bill of 1984 an almost draconian approach to acquire land for developmental purposes was recently sought to be replaced for which the Draft Land Acquisition Bill 2011 was tabled in parliament. But has it served any purpose or is it just the old wine in a new bottle failing to gain any results. Billion-dollar projects stalled or abandoned due to protests or legal battles with angry former landowners have exposed the dicey world of corporate land acquisition in Asia’s third-largest economy, sparking calls for a legislative fix.

India’s abysmal record in terms of providing adequate compensation and honouring promises to the oustees has contributed to the present trust deficit and consequent opposition on the part of owners of land to part with it. In the public eye, the government is no longer considered an honest broker.

Amidst this chaos the only sufferers are the common man who expecting better infrastructure pay stashes of money every year as taxes but are time and again left high and dry.  Himanshu Chandrakar, an IT salaried official working at Infosys says, ‘A silicon valley or a couple of SEZ’s do not decide the overall infrastructure of the country. So what if I live comfortably and work in these environments. The moment I step out and go to my native place which falls outside the territorial domains of the city it’s as sad as one can imagine. If this kind of lob sided infrastructural development continues we are most likely to have an urban outburst of excessive population.”

The beauracratic nuances with its ever prolonged red tapism has plagued the Indian developmental visions. In its  report – Building India: Accelerating Infrastructure Projects by the Economic Survey  drew the comparison that building a thermal power plant in India took three and a half years, while in China it took a year less. Such concerns cast doubt on the speed with which the economy can be transformed by big spending on infrastructure. MOSPI in its annual report showed that 293 Out Of 559 Construction Projects in India Were Delayed As Of October 2010.

Only a quarter of India’s 88 cities with populations of more than 500,000 have formal transport systems, according to the Asian Development Bank. Currently, the National Highway Authority of India (NHAI) is inviting bids for 65 highway projects, the equivalent of 6,800km of road for a total cost of Rs680.8bn. However, according to research by Macquarie, the Australian investment bank, only 15 have been awarded so far. Another 50 are still up for grabs. This is because progress has been hampered by disagreements between the government and private sector companies over whether roads would yield enough revenues to justify investment.

Even the new bill has failed to provide any kind of relief. Soumyajit Sen, practicing advocate at the High Court of Kolkata says, “Land owners badly needed a law that would offer a redressal system for disputes/acts of coercion, a fair compensation package and suitable rehabilitation. Corporates, on the other hand, were in dire need of a process-oriented system that would not only reduce the time involved in land acquisition but also provide safety for their massive investments, without entirely altering their payback estimates. The draft bill has disappointed both.”

The Chamber of Indian Industries  also suggested that the government should carry out an extensive survey of the country, identify the most fertile and productive agricultural land to be protected, and then carry out a massive zoning plan, designating certain areas for different types of development, including infrastructure. However, the new land bill makes no provision for any such an undertaking.

Not only has this new proposed system created further ambiguity but also raised the potential scope of land dealings. The Bill, prima facie, is expected to increase the cost of land acquisition for the Railways, National Highways Authority of India (NHAI), mining, airport and metal projects, even as it is expected to speed up land acquisition due to better compensation and lesser dispute.

Ninad Mishra, a real estate agent from Pune states, “The existent costs in land dealings including the payments made to the middlemen were already so expensive.

With the introduction of the new levels of transparency so as they call it has become newer levels of expenses. The more the running from one authority to another the more is the cost incurred.”

So if this new policy is a nightmare for the urbanites does it fare any better for the farmers as it claims. The new policy takes effect prospectively, and does not cover projects for which land has already been acquired. It promises added benefits to farmers and revises certain provisions of the earlier policy announced on September 3, 2010.

Besides compensation, farmers will get an annuity of Rs 23,000 per year per acre for the next 33 years, going up by Rs 800 every year. In the earlier policy, this amount was Rs 20,000 per acre, going up by Rs 600 every year. Farmers can also settle for one-time compensation of Rs 2.76 lakh (earlier Rs 2.40 lakh) per acre.

The new policy has three parts. The first deals with land to be acquired for basic infrastructure, such as highways and canals, which will be based on mutual agreement. The second part will deal with agencies that prepare master plans for planned development. Karar Niyamavali or mutual agreement will guide land acquisition for this and allow for all the benefits announced in the earlier policy.

A key difference now is that farmers will also be entitled to get 16 per cent of the developed land for free. If the farmer does not intend to keep the land or part of the 16 per cent developed land, he could liquidate a part of it for cash.

The third part deals with land acquisition for development and other commercial purposes by private developers, where companies can negotiate and acquire land directly from farmers, provided they have the consent of 70 per cent of the affected people.

The most major loop hole in this system is that there is a huge distance between the farmer and the development agency which does not allow the farmer to avail all the profits from the deal. Also due to illiteracy of the farmers in the state, many are fooled easily in giving up their lands.

Disappointments, disagreements, non implementations. This is all the infrastructure progress has faced in light of the recent land acquisition dramas. Will it fare any better in times to come ahead or will the hierarchical costs inculcated in land dealings proof to be a huge set back.

The prime challenge for the government is not to turn a blind eye to the needs of the people and have a comprehensive revision of the Bill along with the consent of various representations from groups as corporate, public infrastructure boards, state governments and most importantly local governments.

It’s time we realised that infrastructure is shaped more by the local forces than anyone else and hence decentralisation with effective outcome should be the need of the hour.


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