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A question of land
http://www.thehindubusinessline.com/opinion/editorial/article2780943.ece?homepage=true
There is no escaping the exercise of eminent domain in some form when it comes to land acquisition.
With an uncertain investment climate leading to shelving of many greenfield projects, concerns over land acquisition have receded relatively to the background. But they are bound to return as and when corporates regain the confidence to put their money on the ground, literally. The current period, hopefully short, should be used by the Government to work out a more coherent policy framework for acquisition of land for investments, especially in infrastructure projects. Some States like West Bengal have declared that their governments would not acquire any land for private industries, and it is for the latter to negotiate directly with owners. But that only wishes away the problem. In most parts of the country, land records are outdated and inaccurate. The absence of clean titles exposes purchasers to the risk of sellers not having full, unencumbered rights to the property being transferred. So rather than opt for market purchases, private industries prefer to rely on the state to acquire on their behalf. Such land, freed of all claims once vested with the government, can be transferred without any legal hassles to the investor.
The limitations of the above route have become apparent in recent times though, especially after the experiences of Tata Motors in West Bengal and Posco in Orissa. But at the same time, no State today can really hope to attract industry without its government making land available — more so if it involves contiguous tracts – either directly, or by mediating with individual owners. So, it means going back to state intervention with necessary correctives. The new Land Acquisition Bill enables governments to make land purchases for private companies, provided it is for the production of goods/services in “public interest”, and also if there is consent from at least 80 per cent of the project-affected people. This effectively places limits on the exercise of sovereign power to acquire land for private investors; it can be used only after the market route is sufficiently exhausted.
While the Bill — yet to be passed — is an improvement over the existing Act, the state's eminent domain powers need to give way completely, in the long run, to market transactions, even in so-called public purpose projects. But that cannot happen without computerised, up-to-date land records and title registrations bestowing conclusive, as against presumptive, ownership of property to be bought and sold. Till then, there is no escaping the exercise of eminent domain in one form or the other. Meanwhile, the good news is that some state agencies are beginning to get their acts together as far as acquiring land for public-private partnership projects are concerned. The National Highways Authority of India is set to acquire over 10,000 hectares of land this fiscal, against 8,600 hectares in 2010-11 and a mere 3,000-4,000 hectares in the previous years. It has made been possible through improved coordination with State and local-level authorities. The process should be encouraged.
(This article was published on January 6, 2012)