In the times of Bhatta-Parsaul, Singur and Nandigram crises, the way Tamil Nadu has gone about land acquisition for industry could be a lesson for all states.
Whose land is it anyway? That’s the question the ruling United Progressive Alliance (UPA) government at the centre has promised to answer after the recent agitation in Bhatta-Parsaul villages against land acquisition by the Uttar Pradesh government. The government is determined to table the Land Acquisition Bill in the monsoon session of Parliament.
Consider this situation against the backdrop of Tamil Nadu, which has, till now, not had to face any major protest against land acquisition. This has mainly been so because the state government has negotiated with the land owners, instead of using the traditional Land acquisition Act, to get hold of land for industrial purposes.
After the recent problems faced in Singur, Nandigram and Noida, and the opposition of the Posco project in Orissa, the Union government has decided that the Land Acquisition (Amendment) Bill and legislation on rehabilitation & resettlement (R&R) will incorporate farmer-friendly provisions, such as flexibility in fixing land rates after factoring in land prices in adjoining areas and employment to people displaced by the project. The twin Bills are in the final stages of being drafted by the Union rural development ministry. (Click here for table)
The draft Bill, formulated by the National Advisory Council (NAC), led by UPA Chairperson Sonia Gandhi, suggests that approval for land acquisition be granted only if 70 per cent of the people being displaced agree to it. And, if a party transfers the land acquired with the help of the government at a profit, it should have to pay 25 per cent of the differential to the farmers.
The state government should step in only after the private player has done its bit by agreeing to take over the remaining 30 per cent and if it feels the project falls in what is called the ‘public purpose’ domain. Welcoming the move to prevent any agitation by land owners, mostly farmers, industry experts have said the central government can look at Tamil Nadu as a model state for land acquisition policy — like it was seen at the time of formulating the National SEZ Policy.
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Between April 2000 and May 2010, the state attracted cumulative foreign direct investment FDI of $5.7 billion — one of the highest figures among all states. During this period, the other states together attracted $120.2 billionin FDI. Tamil Nadu’s FDI story was led by the automobile industry, with global car manufacturers investing over $3 billion (around Rs 13,800 crore) in Chennai.
Around 3,000 foreign companies have set up their facilities in the state so far. Of these, 34 are Fortune 500 companies. About 26,000 factories in the manufacturing sector operate from the state, creating employment for 1.77 million people.
When it comes to special economic zones (SEZs), the state has 22 operational multi-product SEZs. Till now, it has not reported any major issue in relation with land acquisition. This is mainly because identity of the landowners has been kept in mind and most of the industrialisation has happened on wasteland, says Sunil Rallan, president of the Tamil Nadu Association of SEZ Infrastructure Developers (Tasid) and managing director of the Chennai Free Trade Zone, which is spread over 240 acres in Sriperumbudur.
It is estimated that Tamil Nadu has 2.41 million hectares of wasteland that can be utilised for industrial development.
Twenty-two Fortune 500 companies have their units in the Sriperumbudur-Oragadam belt. Of these, six are global car manufacturers, including Renault Nissan, Daimler and Hyundai. Besides, global players like Nokia, Caterpillar, Dell, Samsung, Flextronics, Foxconn, Saintgobain have also set up shop here.
Investments worth Rs 30,000-35,000 crore would have come in this belt alone. Most of the land acquisition was done by the State Industries Promotion Corporation of Tamil Nadu.
Pit this situation against that in Singur, where Tata’s Nano project was severely affected due to issues concerning land acquisition. It was reported that 400 acres had been acquired from unwilling farmers.
An exceptional case in point could be Tatas’ Rs 2,300-crore titanium dioxide project. For this, Tatas had signed an MoU with the Tamil Nadu government in 2002. The project never took off due to land acquisition issues, but in this case, an industry source says, the problem had more to do with the local politics and industry pressure.
Another interesting fact, Rallan notes, is that 70 per cent of SEZs in the state are located in Tier-II and -III cities, 200-500 km away from the main towns, while 25 per cent are in 80-km radius of a main city.
The Sriperumbudur-Oragadam belt is around 50-60 km from the Chennai.
In Nandigram, West Bengal, violence was reported after the state government allocated 10,000 acres to an Indonesian company for a chemicals project. This meant displacement of thousands living there. In Tamil Nadu, on the other hand, industrialisation is happening in five districts — Kanchipuram, Tiruvanamalai, Tirunelveli, Tuticorin and Krishnagiri. Most of the land used in these districts cannot be used for agricultural purposes, says N NR Sharavanan, vice-president of Tasid and general manager & head (administration) of Syntel Ltd, which is setting up its centres at Siruseri and Tirunelveli SEZs.
Another interesting case is that of the power sector. Industry estimates suggest that at least 0.8-0.9 acre is required for every the generation of every megawatt of power. If private power producers are expected to generate 120,000 Mw of power, they would require around 90,000-1,10,000 acres. The question is whether the government can provide land for its Ultra Mega Power projects?
It may be noted that the 4,000-Mw Sasan project in Madhya Pradesh and the Mundra project in Gujarat had earlier been held up due to land acquisition problems.
On the other hand, Tuticorin in Tamil Nadu has emerged as the single largest district in the country to attract investment in the power sector. The district has an area of 459,054 hectares, of which only 11,012 hectares, or 2.47 per cent, are forests. It is one of the driest parts of the state and is located on the tip of coastal Tamil Nadu.
Various coal-based power generators are in the process of setting up plants in the district, at a total investment of around Rs 42,000 crore.
A farmer who migrated to Chennai from Sriperumbdur said his ancestors had about 4.5 acres of land that could not be used for cultivation. “We even tried for water and drilled up to 400 ft, but could not find anything but mud. So we sold the land to an infrastructure company that is promoting a warehousing zone and got three times the market value.”
Tamil Nadu is the only state that has multi-product SEZs, besides various industries. It may not be on top of the list in terms of value, but should be the leader in terms of units, says Sharavanan.