Column : Specially contentious zones

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: As the new government prepares to take charge, economic issues dominate the list of priorities. Most counter-cyclical policies for arresting growth deceleration are already in place. The economy is showing signs of settling in the 6.0-6.5% growth mode. Pushing the growth trajectory upward will require action on some pending concerns. Special economic zones (SEZs) figure highly among these.

Acquisition of land for SEZs has resulted in bloodshed, loss of lives and remarkable political upheavals. What is the current status of policy actions on land?

Land acquisition in India is governed by the century old Land Acquisition Act of 1894. The SEZ debate highlighted glaring shortcomings in the Act. A Bill—Land Acquisition Amendment Bill of 2007—containing several amendments was introduced in the winter session of Parliament in 2007. The Lok Sabha passed the Bill in February 2009. However, the same is yet to become an Act. For doing so, it needs to pass two more stages. First, it needs to be cleared by Rajya Sabha. Second, it requires Presidential assent.

For being considered by the Rajya Sabha, however, it should have been tabled in the last session. Had it not been tabled then it would lapse and require to be reintroduced in the Lower House. The status of the Bill is unclear at the moment.

Procedural technicalities apart, do the suggested amendments take care of the problems in land acquisition? Unfortunately, it appears that more ground needs to be covered.

One of the foremost concerns in land acquisition is defining and interpreting ‘public purpose’. Central and state governments in India have been acquiring private land by citing ‘public purpose’ as mentioned in the 1894 Act. The Bill has expanded ‘public purpose’ to include infrastructure (electricity, roads, ports, highways, water supply, sewerage, irrigation, sanitation and any public facility). SEZs are expected to be justified on ‘infrastructure’ grounds. The Bill also mentions ‘any other purpose useful to general public’ where governments can intervene in ‘public purpose’ if 70% land has already been acquired.

‘Public purpose’ was arguably redefined because state mediation in land acquisition was questioned both on ethical and efficiency grounds. But given the information asymmetries in India’s land markets, state mediation is unavoidable. Most mediation requests are likely to come from developers. And the state will have to cite ‘public purpose’ whenever it intervenes. Thus in spite of amplifying ‘public purpose’, intervention will remain contentious.