Readers will recall that at the time of introduction in the Parliament of the Draft Land Acquisition Bill, loud alarm bells had been sounded by Indian industry. A number of senior industry representatives and industry associations had pointed to the potential deleterious impact of the provisions of the Bill on the progress of industralisation and, indeed, the modernisation of the Indian economy.

It is perhaps a sign of our present times that despite these strong protests by the industry, the Parliamentary Standing Committee has suggested some far-reaching amendments to the Bill that are bound to have an even stronger negative impact on the industralisation and urbanisation of the Indian economy. Moreover, in response to the Standing Committee?s rather draconian suggestions, the minister in charge has let it be known in no uncertain terms that he will not budge from the provisions of the original Bill, however strong the objections from industry. But the more amazing feature of all this is that even the objections from several ministries and public sector agencies like the DMIC have been brushed aside. Let me elaborate why we think that the Standing Committee suggestions will have such strongly negative consequences. The Committee has further restricted the definition of public purpose for which land can be acquired by excluding industry from the definition, even for the limited purposes of last mile or marginal acquisition, necessitated because despite the best efforts of the entrepreneur, he may still not be able to persuade those handful of persons who may be motivated by malafide reasons and who will henceforth be able to block any industrial project in the country.

By excluding industrial zones and industrial corridors as well, the proposed amendments will directly work against the objectives of the government as stated in the National Manufacturing Policy. By excluding PPP projects, now the dominant mode for infrastructure development, the Standing Committee’s proposals will ensure that the 12th Plan targets will never be achieved. By restricting the use of irrigated multi-crop land for infrastructure to 5% of the multi-crop irrigated area in a district, the Bill will effectively render about 55 million hectares of arable land beyond the scope of acquisition. The extra resettlement and rehabilitation burden that will be imposed on industry even when they may have purchased the land from willing sellers, irrespective of the area of land to be acquired, will drive investors away from any industrial projects for which more than 100 hectares?not a large area for industrial use?is required.

The Land Acquisition Bill, if passed, will ensure that neither industry nor manufacturing units will have any future in this country.

The author is Secretary General, FICCI

The adverse reaction from industry on this report is actually not warranted. We heard them all out patiently and looking at other representations, as well as evidence on the ground, before we came out with our set of recommendations for the government.

The committee was firmly of the view that the government can acquire land for proven public purpose. What the committee was not in favour of was governments acting as land agents for private industry.

In fact, the Land Amendment Act of 1894 did not have any such provisions, it had purely been designed for acquisitions for public purpose. In 1984, the Act was amended to include any acquisition by the state.

We went through many representations made by various bodies, and also saw that when governments acquired land, sometimes they acquired more than was required. Vast tracts of land were lying unused. The private companies were able to use only part of the land acquired, with the rest of it going waste as it was not even being returned to the farmer for his use.

In fact, we have inserted a clause saying that if land has not been developed or used in the first five years of acquisition, it has to be returned to the owners.

The committee also questioned why the acquisition of land should be the only incentive that can be given by the state to attract industry. The government can still earmark land, say that this is suitable land, this is not so suitable looking at availability, fertillity of the soil, crop patterns, etc. Then private parties can directly negotiate with land-owners and other stake-holders in acquiring the land.

Maybe the government can even offer tax incentives or other kinds of industry-specific incentives to private bodies for setting up industries in their states. The Standing Committee report has been clear that ease of acquisition of land cannot be the only incentive for private industry to set up a plant in a particular state. This has to do with other incentives and the overall investment climate in the state.

I don’t agree that the recommendations of the committee are anti-industry. The attempt, at all times, has been to provide a just and equitable solution to the tightrope between industrial development and the rights of all stakeholders. Equity and justice have to go hand in hand.

This is, of course, just the Standing Committee?s report on the Bill. We do not know what attitude the government will take to our recommendations. As you know, these are not binding on the government. The report, however, was a product of a committee comprising MPs across party lines.

The author is chairman, Parliamentary Standing Committee on rural development