Recognising that land remains an emotive issue, configurations across the political spectrum in India have been vying with each other to be seen as pro-farmer. The persisting, strong human attachment to land was used to considerable advantage at Singur and Nandigram in West Bengal, and at Bhatta Parsaul in UP. Politicking, rather than rational economic and social reasoning, is now taking place around framing a new legislation to acquire privately-owned lands for non-agricultural usages.

Undoubtedly, the archaic Land Acquisition Act of 1894 needs to be replaced by a more contemporary statute. Pressure on land has grown several-fold with India?s population having since increased by almost 100 crore. The vast pool of available government land has depleted while economic and social activities requiring land have grown. Clearly, there is need for more circumspection about intensity of land use, valuation of land as per intended use rather than existing use (which in most cases, being agriculture, tends to be lower) and ensuring effective rehabilitation of those affected by compulsory acquisition. Noticing the emerging countrywide indignation, the UPA had in October last year introduced the National Land Acquisition, Rehabilitation & Resettlement Bill, 2011. Its provisions sought to reflect greater sensitivity to plight of landowners while not being oblivious to concerns of those who need land for other pursuits.

The report of the Standing Committee on Rural Development, to which the government Bill had been referred, has questioned the very premise on which acquisition through invoking the eminent domain of state is undertaken. Citing examples of developed economies, it has opined that the government should not assist private enterprises in securing land. Instead, as is the case for other factors of production, viz capital and labour, private industry and infrastructure developers should purchase land through direct negotiations with landowners. Even projects set up on PPP mode are sought to be excluded, as these too are considered ?for profit? entities. As per the panel, government role in acquisition should be limited to linear infrastructure (rail, roads), irrigation and social infrastructure of schools, hospitals, drinking water and sanitation financed by the state. It also recommends that the existing 16 central laws on acquisition for railways, highways, defence-works, atomic energy, SEZs etc be aligned with the new Bill.

Besides industry-representatives, whose reaction to the committee?s report has been on expected lines, disagreement almost bordering on annoyance has come from several other quarters. Its proposals have been found ?regressive? by the Union commerce & industry minister and ?non-binding? by the rural development minister, who envisages continued role for government in acquisition for private sector, as long as it produces public goods or serves a larger public purpose. To most others, the committee?s insistence on keeping the state out of land acquisition process is too premature as the country is not yet at a stage of development where the private sector can, by itself, arrange all the factors of production. The highly pro-farmer attitude of the parliamentary panel stems from its assertion that since there are no laws in India to compulsorily take over capital and labour, there should be no legal backing for expropriating land either. On grounds of equity, this might be reasonable but as long as economic growth remains a stated national goal, there is clear need to find a middle path.

All democratically-elected governments, while legislatively facilitating the attainment of certain objectives, have to ensure that society at large is not, directly or indirectly, adversely impacted in the process. Without doubt, both the government and the Standing Committee have been alive to this aspect. In the Bill, land compensation has been raised by 200% for urban and 400% for rural lands from existing levels, resettlement made obligatory upon acquirers of 100 acres or more of land in rural and 50 acres in urban areas, and all multi-cropped lands excluded from provisions of compulsory acquisition. It also envisages consent of at least 80% of the displaced families before acquisition is undertaken in public interest for ?production of public goods or provision of public services?.

The parliamentary committee has gone further left and recommended that no fertile (cultivable) land be acquired, and scheduled areas (in central and northeast India) be left out of compulsory acquisition. This would reduce the stock of land that can be put to uses other than agriculture. But to strive for greater food security and protection of tribal-interests, these may be acceptable. Its suggestion to invariably associate village councils in preparation of social impact assessment of each acquisition-proposal would make the exercise participative and meaningful. The proposal to return to the tiller all the unused land should ensure that excess land would not be acquired in the first instance. The government?s views on rehabilitation have been endorsed and can be acted upon.

What needs reconsideration is the Standing Committee?s suggestion to virtually withdraw the state altogether from the acquisition process for private enterprises. Landowners certainly require greater protection for what in most rural areas is probably their only tangible asset. At the same time, the other ?demandees? of land warrant assistance, at least as long as transparent markets for land are not established and land with conclusive ownership titles is not easily bought and sold. However, all governmental help, including for consolidating fragmented pieces already procured, should come at a high cost. When a developer has to fork out four or five times the market price for acquisition through government, he would be serious in assembling land by private negotiations, a process which might save him considerable sums of money.

Our new land law should help in evolving such market-driven alternatives rather than withdraw the state from arranging an important economic factor of production. This would necessarily entail not labelling the entire private sector self-seeking and not serving any public interest. Equally important is to usher in the revised statute quickly since uncertainty and dithering over land have slowed down capital-formation, the sine qua non for higher GDP growth.

The author is a former secretary in the Union ministry of commerce & industry