Easy land acquisition becomes USP for competing states

This gives ballast to Modi's call to India's states to draw up their own land acquisition rules in order to become competitive

Half-a-dozen states are hosting global investor summits over the next six months to invite foreign direct investment (FDI), and almost all of them are offering easy land acquisition policies as their USP.

This gives ballast to Prime Minister Narendra Modi’s call to state governments to draw up their own land acquisition rules in order to become competitive when he abandoned efforts to promulgate a new industry-friendly land acquisition law following political opposition.

Chennai is getting ready for the Tamil Nadu Global Investors meeting (September 9-10) and among other things, has promised as much as 40,000 acres of developed land to foreign investors with a choice of three routes — the state-owned State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) that offers a package of infrastructural services, including land, special economic zones (SEZs), and direct acquisition of private land.

Punjab Deputy Chief Minister Sukhbir Singh Badal has been on a world tour to invite investments to Punjab. The Punjab global investors summit is scheduled for October 28-29. The state was one of the first to trash the amendments in the land acquisition law of 2013 proposed by the Narendra Modi-led government.

Yet Punjab is selling itself as an investment destination because of its “transparent” land acquisition policies. In Punjab, the government acquires no land except for projects that qualify under “public purpose”.

Farmers have the option of accepting compensation at rates fixed by the government — or market rates plus a ‘displacement allowance’. The Congress-led Karnataka government will host investors from November 23-25 at Bengaluru at Invest Karnataka 2015.

This is the third such meeting held by the state but the first that the ruling Congress government is hosting. According to Chief Minister Siddaramaiah, 30,000 acres of land has been acquired, and another 20,000 acres has been identified for acquisition to locate industrial projects in the state.

Despite all the problems in land acquisition and other clearances faced by POSCO, Odisha, which will host a global investors meeting sometime in 2016, is also showcasing easy land acquisition processes to lure foreign capital.  The state Industries Minister Debi Prasad Mishra says 0.2 million acres of compact land has been identified and the state is on its way to create a land bank, spread over Jagatsinghpur (Paradip), Bhadrak(Dhamra), Cuttack, Khurda, Dhenkanal, Angul, Sundergarh (Rourkela), Jharsuguda,Jajpur (Kalinga Nagar) and Balasore, ahead of the summit. Haryana plans to invite investors in early 2016 and says land is plentiful and is easy to acquire. Haryana Chief Minister ML Khattar has returned from an extended tour of the US and Canada last month to solicit capital and has said he is ready to offer land at highly competitive rates.

However, in the same breath, Khattar concedes that Haryana is an agrarian state and land would be acquired only with the consent of farmers and by evaluating the social impact of the acquisition.

Madhya Pradesh Chief Minister Shivraj Singh Chouhan recently told a group of industrialists that his state has a land bank of approximately 25,000 hectares. Suitable for big investors, this land can be acquired and developed according to individual project requirements. For small investors, the Madhya Pradesh government has developed 231 notified industrial areas spread over 15,000 hectares with facilities such as power, water and roads.

When the prime minister said the states would be free to decide their own methods of land acquisition and backed off from imposing a uniform pan-India law on them, he also hoped competition would drive the states to develop industry-friendly land acquisition policies. That competition is becoming increasingly evident.