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Hasten slowly

The land acquisition Bill needs detailed debate before enactment

Business Standard  |  New Delhi 

The government has done well to quickly bring to Parliament a Bill for replacing the 1894 law on land acquisition, and thrown into the bag new provisions for relief and rehabilitation. A draft version of the composite Bill was put out for discussion some weeks ago by the rural development minister. Some key changes have been made to that draft, and the minister has said that further changes can be considered as the Bill goes through parliamentary scrutiny. Indeed, although the issue has gained some political urgency because of the protests over forcible land acquisition in many states, it would do well to hasten slowly so that what gets enacted into law is not one that creates new, unanticipated problems.

Businessmen have argued that the 80 per cent threshold prescribed for open market purchase before permitting forcible acquisition of the rest of the land for a project is a high threshold to cross. There is something to be said for lowering the figure. Others have criticised the Bill on the grounds that it will raise land prices. That is hardly a criticism, since the very purpose of the Bill is to give farmers a better deal when they have to part with their land. The cost of land accounts for only a small portion of the total cost of virtually any industrial project, so it cannot be argued that higher land prices will set back the industrialisation process. However, the stipulation that a public purpose used to justify forcible acquisition cannot ever be changed needs review. While lawmakers will be mindful of the Noida authorities acquiring land from villagers with one stated reason, and then selling the land to builders, a rigid definition of the original purpose can be counter-productive. To take examples from real life, land that was acquired decades ago for sundry industrial projects in the public sector has been used for other purposes after the companies became unviable and closed down. Or, what if a company adds on a new line of business and decides to throw in a power plant next to a steel mill? Putting legal rigidities in the way of such eventualities can only create procedural bottlenecks of the kind that already bedevil the country in every field. There are also questions about the way in which land market value is to be established, the multiple used to pay farmers (four, not the original six, which itself may have been too little), and even the way public purpose is defined; creatively used, it can include virtually everything.

It would also be a good idea for Parliament to study the experience of different states. The experiences of Gujarat, Haryana, Uttar Pradesh and West Bengal are quite different, and so are those of the southern states. There must be something to be learnt from the success stories, and from the problem cases. Lastly, since land is the preferred playground of politicians at all levels when they seek to make a quick buck, and given the powder keg that could explode if the new Bill creates new problems, all provisions must be carefully scrutinised from the perspective of potential, indeed inevitable, misuse.

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First Published: Mon, September 12 2011. 00:14 IST
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