How to prevent Singurs

DLF's public share issue may or may not do well, but from a public policy perspective the important point is that, since the company filed its first draft prospectus last year, it has increased the size of its land bank dramatically, to 10,255 acres. In addition, the company has identified 60 cities in which it plans to identify and then acquire land to build shopping malls. Unitech, another major realty firm, has a land bank slightly larger than DLF's at around 10,500 acres, and has already added 200 acres to this in three months. Meanwhile, Reliance is reported to have already acquired (in a few months) 8,000 acres for its proposed special economic zone in Haryana.

If privately-owned realty firms can sew up large tracts of land in a short period of time, why does the government need to be in the business of acquiring land from farmers by invoking the doctrine of eminent domain, and then handing the land over to businessmen to set up factories""and frequently inviting controversy in the process? It is true that if a state government promises to make land readily available to industry, it enhances the state's attractiveness as an investment destination. But it is equally obvious that governments are not distinguishing themselves in the process. In West Bengal, the Singur fire is yet to die down even as another one, this time over the proposed Salim project, has become the next battleground. In Haryana, the protest by a Congress MP over the Reliance SEZ could well result in a similar situation. The situation is no different in most other states, the government's inability to get land for Posco in Orissa being one of the more prominent examples. It should be obvious that the solution lies in asking the private sector to get its own land; indeed, some of the firms planning large retail footprints across the country are tying up with specialised realty firms for precisely this reason.

While there is no definitive evidence that anyone can offer in support of the argument, it is entirely likely that protests would reduce dramatically if the government went out of the picture""compare the lack of protests when Reliance Petroleum hikes its petrol/diesel prices with those when the government hikes them for state-owned enterprises; and the lack of protest when the two private sector power distribution companies BSES and NDPL raise their tariffs, compared to the time when the Delhi Vidyut Board did the same as a government organisation.

None of this should be taken to mean that the government has no role to play, or that the private sector will now be free to go and buy the most fertile land, though it has to be recognised that the world over capitalism has progressed only with the landed becoming landless and getting absorbed in the industrial/service sector labour force""indeed, it is obvious that if people don't get off the land, their incomes will rise only slowly. The government's role, in this scheme of things, will get enforced through the process of zoning""once the government decides, for instance, that wasteland around Bhopal can be converted for industrial use and notifies this, then it is up to the private firms to go and buy up the land on their own. So, if it wishes to protect fertile land around Bhopal, to continue with the same example, the government only has to refuse to notify it as commercial land.