The recent farmer agitation over land acquisition in Uttar Pradesh is another reminder of just how complicated the process of acquiring land for industry (or indeed for any other non-agricultural purpose) has become. It now threatens to be the major bottleneck for growth and development. It is well known that one of the roots of the problem is the antiquated legal framework for land acquisition, which actually dates back to 1894. That particular law gives the state almost unbridled powers to acquire land. There was an attempt to draft a new law in 2007, but it never came to fruition. Under the UPA-2 regime, Mamata Banerjee has been adamant on not supporting any new legislation on land acquisition. The new draft Bill did try to address some of the concerns of those opposed to the old system of land acquisition by mandating the private sector to acquire a certain proportion of the land directly, with the state only empowered to acquire a minority share. It also contained better provisions for resettlement and rehabilitation than had ever existed before. Unfortunately, the UPA government seems unwilling to press Mamata Banerjee on this issue.
At the core of the problem is identifying the right price for a particular piece of agricultural land. All considered, it makes sense to consider the future use of a piece of land before deciding its price?the current price of agricultural land is likely to be lower than its price when converted to industrial use. And it isn?t necessarily impossible to discover this price if the private sector is allowed to negotiate directly with the farmers, rather than the state mandating a particular price. There will, after all, be some price at which the farmers will not say no and it will still be worthwhile for the industry to buy. The problem, of course, is that land markets, particularly in rural areas, are not well developed. There is a serious problem of titling?without a formal title, a farmer will obviously not agree to sell. Assigning titles is a gigantic exercise but it must be done along with computerisation of land records. This will help farmers sell their land. Interestingly, in states that are richer (also where farmers are better off) and where land markets are better developed, there is much less controversy over land acquisition?when was the last time you heard about agitation over land in Gujarat? The poorer states, Orissa, UP and West Bengal are at the epicentre of the agitation. The government needs to act on new legislation immediately.
