Niti Aayog vice chair bats for development beyond land bill

Even as political parties spar over enacting a new land acquisition law, Niti Aayog Vice Chairman Arvind Panagariya has suggested alternative ways for states and industry to get hold of this crucial asset for development, such as long-term lease and land-pooling.

Stopping short of saying that a central land acquisition law wasn't required, the noted economist alternative ways were also imperative since the process to acquire land takes four-five years at times even for rural roads, affordable housing, infrastructure and building cities.

"Human instinct, especially in democratic societies, is to disapprove of coercion. In the context of land acquisition, this disapproval translates into a rejection of the taking of land by the government without the consent of the owner," Panagariya said in a blog post.

"But when both buyer and seller agree, the transaction can be completed, as a purchase instead of acquisition. The view that consent is always necessary amounts to arguing all ownership transfers must be through purchase transactions, eliminating the need for a land acquisition law," he said.

In the Indian context, he said, the issue gets more complicated since land acquisition belongs to the Concurrent List of the Constitution, under Article 254(2), allowing states to amend a central act provided the central government approves of the amendment.

This, he said, could be one of the ways forward.

"Under the present government, states of Rajasthan and Madhya Pradesh have amended several labour laws that fall under the Concurrent List. The same instrumentality can be applied to land acquisition, subject to the central government giving its approval," he said.

He said governments, per se, should not have much of a problem since the 2013 act has introduce a distinction between treatments of land acquired for specified public purposes for government use and that acquired for the same purposes but under private or public-private-partnerships.

"Whereas the act permits acquisition without consent when land is for the government's hold, use and control, it requires the consent of 80 percent of the owners if land is for private projects and of 70% of them if land is for public-private-partnership projects," he said.

As a way forward, he advocates the Tamil Nadu model, that has amended the 2013 act.

"The amendment empowers the Tamil Nadu government to apply the compensation and rehabilitation and resettlement provisions of the 2013 Act to the listed legislations, however," said the vice chair of India'sn top-most official think tank.

According to him, a major advantage of the Tamil Nadu amendment is that it allows states to add or delete legislations as conditions change.

"In view of the fact that the central government has given approval to the Tamil Nadu amendment, it is unlikely that it would refuse other states a similar amendment should they choose to introduce it," he added.

"An additional instrument that governments may use to make acquisition more acceptable to landowners is land pooling," he said.

"The idea here is to purchase or acquire more land than is required for the project and eventually transfer each landowner a fraction of her land back from the excess land after the project is complete."

Since public purpose projects such as highways raise the value of surrounding land, the value of just a fraction of the acquired asset that is returned could be higher than the value of the full piece prior to the completion of the project -- which will make it attractive for landowners.

"Alternatively, government may take land on long-term lease than purchase or acquire it. Again, landowners may find this option attractive because it allows them to keep ownership of land, earn an assured return and retain the option to renegotiate the terms once the initial terms of the lease expires."