The Difficulty Of Resolving Trade-Offs

The Gopalpur story will be repeated in several other places. The Enron power plant in Maharashtra and the Cogentrix plant in Karnataka will also result in the uprooting of large numbers of people. Many other large scale industrial projects will also have to be located in areas which currently provide income and employment to farmers and agricultural labourers. Indeed, the very process of development involves an increasing use of land in industrial, rather than agricultural use. Similarly, the construction of much-neededhighways will also eat up land. In all these cases, the alternative use of land will ultimately increase the country's national income by many times the loss of incomes of the people who are displaced from the land. Of course, this loss in income is not the only cost which needs to be taken in any social cost-benefit calculation. Often, large scale plants may significantly increase environmental pollution. The harmful effects of pollution are an important and significant element of cost, and can often outweigh the direct costs incurred by way of loss of incomes of the displaced persons.

 

But, if the benefits exceed all possible costs, then rational economic calculations dictate that the land be used for the industrial project. (I was called a hard-boiled economist when I said as much at a seminar on rehabilitation some time ago!) Of course, it is imperative to pay an adequate compensation to all those whose livelihood is threatened by such new projects. Since this is likely to become an increasingly contentious issue, it is important to agree on the scale of compensation as well as on who is to be compensated.

The last point is important because according to existing laws, only the owners of land can claim compensation. One implication of this is that agricultural labourers who are equally affected by the change are not entitled to any compensation. This is clearly iniquitous. Clearly, the government needs to pay immediate attention to issues related to acquisition of land, and introduce new legislation providing adequate protection to everyone affected by new projects.

The governments in India have generally resolved the trade-offs involved in such land disputes in a rational manner, or at worst remained passive. This is mainly because only small numbers of people are uprooted in each individual case. As I have mentioned, the number of displaced persons in Gopalpur is likely to be 25,000. Unfortunately, governments have not shown the same amount of economic sense in many other cases involving the allocation oent wants to alienate the urban middle class, and so we continue to be burdened with these absurdities.