As acquiring land for manufacturing industries becomes an issue of discord between various stakeholders, a Planning Commission committee has suggested setting up an independent regulator to lay down guidelines for such acquisitions.
To determine the value of land for industrial purposes, which is mostly the primary cause of dispute, the steering committee on manufacturing, headed by Planning Commission member Arun Maira, suggested two methods: In the first, the land owners would submit the application for the sale of their land, quoting a price. The committee termed this a reverse auction process. In the second method, the regulator would set a price based on a multiple of the historical land price, as mentioned in the government’s land records.
The committee, constituted to suggest measures to boost growth in manufacturing in the 12th five-year Plan, said while determining the price of land, the regulator should incorporate factors like upfront payments, annuity income streams and participation in the future appreciation of land prices.
The committee also suggested if the owner wasn’t satisfied with the compensation package, he could choose a package of his own.
The committee has also recommended that the regulator frame the norms for valuation of different types of land and encourage the setting up of a land development corporation (LDC). The LDC would act as an independent commercial entity for acquiring land, and would be given a licence by the regulator.
The panel also favoured a national land use policy for land mapping, zoning and digitisation of land records. “The policy, which could have similar statutes in states as well, should look at measures to optimise the use of land, as the resource is becoming scarce,” the committee said.
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The government has already tabled the Land Acquisition Relief and Rehabilitation Bill in Parliament.
India’s manufacturing sector was one of the primary laggards of the 11th five-year Plan. Against the target of 10-11 per cent growth during the Plan period, the sector is likely to grow by just 7.7 per cent.
The manufacturing sector’s contribution to growth in gross domestic product (GDP) has been stagnant at 15 per cent (excluding mining) for the last 30 years. In China, manufacturing accounts for 34 per cent of the GDP, while it contributes 40 per cent to the GDP in Thailand. To increase the share of manufacturing in India’s GDP to 25 per cent over a decade, the government had introduced a national manufacturing policy.
The Planning Commission’s committee on manufacturing has identified land as a critical input. In India, just two-four per cent of the available land is used for industrial purposes.
“The slow pace of growth of the manufacturing sector at this stage of India’s development is not acceptable. We must ensure manufacturing becomes the driver of GDP growth,” the committee said.