Gujarat has introduced an interesting land policy for industrialisation, which may well be the beginning of the end of the land crisis, at least to the extent it is man-made. The policy essentially follows the model some of us have advocated, which is to make the farmers stakeholders in land development for non-agricultural purposes. The state has a long tradition of support to industry, particularly small industry for infrastructure provision. It has a highly decentralised pattern of industrial location. I remember a cousin-in-law who, in 1972, had developed, in his garage in Surat, a centrifugally-casted oil liner for auto engines when the usual liners were sand-casted. He wanted to shift to Ahmedabad for mass production and went to the industrial estate office. In six weeks time he shifted to Ahmedabad and went into production. In more recent times while the state is growing fast, land for industry is increasingly becoming scarce. Gujarat?s urban and industrial sectors were expanding fast. It also had a relatively diversified agricultural economy, further supporting decentralised market towns, although in recent years the growth of wheat and rice is faster on account of Sardar Sarovar waters.
Land for urban construction was always easily available and even in the days of urban land ceilings the government would make available land for housing. In cities like Ahmedabad, a few land developers were always available supplying housing at, say, a rate roughly a quarter above the cost of self construction. But land has become increasingly scarce in recent years and land prices have been shooting up. Land purchases for industry is expanding very fast, but by the government agencies for industrial estates is slowing. This has led to the new policy. It provides for purchase at close to market prices, as estimated by an independent planning consulting university. Of course, market prices can only be figured out with recent land transfers and the data is on the low side since prices declared for transfers are lower than the transacted prices on account of tax evasion. However, these prices would be much higher than the price paid for land acquisition.
The policy also provides that out of the surpluses that would accrue after farm land is developed for industrial purposes, a share would be given to the farmer who originally sold the land. Also, his kin would get training for industrial and other support jobs likely to emerge with the new activities. The farming communities could then be genuinely called stakeholders in the process. These are novel features that create an interest in agro-based urbanisation by the farming community in a process of balanced growth. It tries to frontally face and resolve the traditional hostility of farming communities to perceived land grabbing by outside groups. The Bharat Krishak Samaj has protested against the new policies but it is likely the farming community will stand by them.
This would still leave the lone ranger who would stand in the way of transfer of land and this problem may need to be resolved by state power, hopefully in the framework of community support to the process. This is an old public finance problem and the literature has solutions to it. One of the features we wanted to be looked at was creating community organisations of farmers, say producer group companies, to get involved in the newer activities being planned but the government stayed away from that and opted, for understandable reasons, for negotiations with individual farmers on a liberal negotiating platform.
It is also interesting that the civil servant who reportedly designed the scheme has filed a case to protect his individual rights. He has argued that as a public servant he is not obliged in RTI queries to disclose his wealth. It is time that honest civil servants stood up against busy bodies who want to interfere everywhere.
The author is a former Union minister