Churchill referred to the subordination of the ruling classes to the settled customs of the people. Scholars ranging from Niall Ferguson to Francis Fukuyama attributed the industrial revolution to these very principlespre-eminence of the law helped spur widespread ownership of property, and provided incentive to make something out of it.
Ratan Tata, while talking of how the government needed to give an irreversible commitment that the law of land had sanctity, had some more specifics to offer. In an interview to PTI, he said, You get FIPB approval to invest in India and then three years later the same government tells you that your licenses are illegal and that you have lost everything. If India doesnt give a commitment that government approvals are not to be taken lightly, he added, India would be taken lightly.
Though Tata hasnt mentioned any company by name, its apparent he is talking of Telenors purchase of a stake in Unitechs telecom license after getting an FIPB approval. While this case isnt quite the same as the Mal expropriation of the GMR airport since the telecom licenses were cancelled by the Supreme Court, there is a larger issue here for investors. Telenor, for instance, paid a market price for its share of the company which had a valid license from the government of India, and certainly those who funded the company just got caught up in something they had no hand in. Tatas is not an easy question to answer, but clearly someone in the government needs to be thinking about a solution. The Torrens title offers one such solution where the state compensates those who buy land in good faith based on official land records. Perhaps some version of that is worth looking at.