Unlocking land assets

Transparent allocation policy for available land needed

A study by the Centre for Policy Research has shown that there has been a sharp rise in the number of land-related cases before the Supreme Court. In the past three years, as many as 280 cases have come up before the apex court pleading for annulling acquisition of land under the provisions of the Land Acquisition, Rehabilitation and Resettlement (LARR) Act of 2013. What is more significant is that in almost 95 per cent of the cases, the Supreme Court has invalidated acquisition of land on terms earlier approved by the authorities. Almost three-fourths of the cases pertain to land allotted in six states —Haryana, Uttar Pradesh, Karnataka, Punjab, Tamil Nadu and Delhi — and the matter in dispute in two-thirds of these cases pertains to calculation and payment of the market value for the land. Equally revealing is the study’s finding that in over 86 per cent of the cases, the apex court had to increase the overall compensation, including the market value of the land and rehabilitation of displaced persons, earlier awarded by the government. This shows the massive under-payment prevalent in land-related transactions.

 
This is a trend that can hardly be ignored. The land acquisition and rehabilitation law of 2013 has a provision that allows land losers to appeal against an order if acquisition is still pending. Successful petitions against pending land acquisitions are likely to see more such cases coming up before the apex court. Even land acquired for a state-owned project can now be challenged if the acquisition process is not completed. There is little doubt that a spate of fresh legal challenges against pending land acquisition can seriously undermine efforts to revive the manufacturing sector or kick-start the investment momentum that continues to remain feeble. The Narendra Modi-led government’s initial attempt to suitably amend the land acquisition and rehabilitation law of 2013 to facilitate easy land acquisition with attractive compensation packages met with political resistance. There are no signs yet that the government at the Centre will revive such efforts. There is no evidence either of the promised alternative path of pushing the states to bring about necessary amendments to land acquisition and rehabilitation laws.

 
A way out of this stalemate has been suggested in a study published by the India Development Foundation. If the government cannot amend the 2013 land law, it must explore alternative options of making available large tracts of land that the government already owns. The study has established that there are adequate land parcels with the government that remain unused. These are situated mostly within or near municipal limits or towns and can meet the land requirement for infrastructure projects in most states. In addition, all state governments have large tracts of land that are earmarked for industrial use. Taken together, the land parcels that are available with the state governments can meet the demand for fresh land needed for new infrastructure or large industrial projects. However, it would be important to allocate such land in a transparent manner, perhaps through an auction process that will counter charges of crony capitalism or allotment of land to a favoured few. To begin with, states in possession of such land should be encouraged to declare their land holdings so that the data on available land become public. In short, states should look for creative options so that the land that is already available with them can be allocated for industrial and infrastructure projects transparently with due compensation.