Letters: Fair land deal

This refers to Vinayak Chatterjee’s “The ‘L’ word” (September 21) in which he articulated Indian industry’s fears about the proposed amendments to land acquisition legislation.

He has some good reasons — primarily related to land titling. These title defects vanish if land is acquired, rather than purchased. Acquisition is thus a short-cut across our byzantine land records — a distortion that partly corrects for another distortion. Another obvious procedural nightmare is the provision that the original acquirer is to distribute 80 per cent of the capital gains to the original owners or their heirs, if acquired land is ever resold. Besides, direct private transactions may lead to worse outcomes, based on local asymmetries in information and power. These asymmetries are likely to reduce as communities become more market-integrated but state’s intervention can help only if it is seen as a neutral arbiter, rather than as siding with the acquiring side, as is currently the case.

Compensation needs to respect three minimal principles vis-à-vis those affected. They are:

• maintenance of existing living standards,
• sharing in gains from the transaction and
• preparation for life without land, especially for the children,that is, by providing free access to high-quality education and health.

The setting up of stand-alone public-sector Land Bank Corporations (LBCs) proposed by Mr Chatterjee could be an interim mechanism, till land titles are sorted out, provided they have the following safeguards:

• acquisition price based on a reasonable discount (based on the cost of providing infrastructure) to the price of developed land in the neighbourhood,
• compensation to all affected people, including those who are not landowners, that is, sharecroppers, agricultural labourers etc, based on the minimal principles above,
• use of the 70 per cent rule in the proposed legislation to determine whether an offer is acceptable to the people affected by the project,
• lease of developed land primarily through auction, recognising that exceptions may have to be made in cases where large tracts of land have to be assembled,
• substantial shareholding in LBCs for acquirees, based on extent of land acquired — so that they can share in the upside, if any, after all compensation claims are met,
• transparent public accounts for LBCs, so that the government’s gains from land transactions are visible and can be shared in a manner determined by the political process,
• state oversight over LBCs — this means through the proposed Land Acquisition Compensation Disputes Settlement Authority, like other regulated state-owned public utilities.

Accepting these will indicate that industry is truly concerned about the implementation of the proposed changes to the land acquisition rather than simply trying to protect the current subsidy it gets from cheap land, at the cost of some of our poorest citizens.

Partha Mukhopadhyay, New Delhi