Reimagining land-pooling amid ground realities as states woo industries

The Bharatiya Janata Party (BJP) government in Madhya Pradesh, which marked a year in office earlier this month, is exploring a new model of land pooling to boost industrial investment.  

The primary objective of the scheme, Madhya Pradesh Chief Minister Mohan Yadav told Business Standard in an interview last week, is to ensure the process is mutually beneficial for farmers and industry. Taking a leaf out of Gujarat’s policies, the state plans to tweak its existing land pooling framework, the chief minister said. 

Madhya Pradesh has been working on a land pooling policy since 2019, with supporting legislation already in place.

Several other states, too, have experimented with land pooling, especially after the 2013 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR). This law established procedures for land acquisition for public purposes.  

Since its introduction, land pooling has emerged as a legal innovation to enable sustainable urban development. It has been used for projects such as Amaravati, the new capital of Andhra Pradesh, where the Telugu Desam Party government (2014–19) acquired 33,000 acres from farmers in Guntur district; the Dholera Smart City in Gujarat; and Magarpatta township in Pune city.  

What is land pooling?

  Land pooling generally involves owners offering land parcels to an agency for public purposes. The agency develops the land and returns a portion to the owners, typically less than the original parcel but with higher price value post-development. 

Land pooling as a concept is not new and in rural areas, a form of land consolidation has been in the works for the past several years. 

Land pooling and LARR Act

  The LARR Act has long been contentious for industries willing to set up projects due to its stringent social impact assessments and high compensation requirements. 

Shortly after taking office in 2014, the BJP-led National Democratic Alliance (NDA) government, under Prime Minister Narendra Modi, sought to amend the law at the behest of state governments.  

The proposed amendments sparked a furore across the country, with the Opposition Congress accusing the government of favouring big businesses.  

Congress leader Rahul Gandhi labelled it a “suit-boot ki Sarkar”, a government of and for big money. Even Rashtriya Swayamsevak Sangh (RSS) affiliates, such as the Bharatiya Kisan Sangh, opposed the proposed amendments.  

In December 2014, the Centre issued an Ordinance to amend the 2013 Act; it proposed to dilute the Social Impact Assessment and Consent Clauses for select few sectors. 

Later the government decided to extend the benefits under the Land Act to all the 13 sectors that it had earlier decided to exempt to speed up development works.  

Subsequently, and after sustained protests by the Opposition and objections that the RSS affiliates raised in front of the parliamentary panel that was set up to scrutinise the proposed amendments, the PM in one of his radio addresses announced that the Ordinance would lapse in the interest of the farmers.

  However, the Centre left it to the states to make changes suitable to their requirements on LARR. Since then many states have made significant changes to the Act which several critics said diluted much of the provisions of the mother Act.

  Central efforts on land pooling

  The government back in 2017 was looking at coming out with a model on land pooling to benefit growers. It formed a high-powered inter-ministerial panel to look into the concept from agriculturists’ point of view and also to scout for social entrepreneurs who could invest capital in it, so that scale could be upped. 

Namita Wahi, senior fellow at the Centre for Policy Research (CPR)’s Land Rights Initiative, notes that land-related conflicts remain widespread.  

“In fact, if anyone looks around, there are regular skirmishes between people and the administration across the country on land-related matters,” Wahi points out. 

A CPR analysis shows Punjab, Haryana, and Uttar Pradesh lead in land acquisition litigation, primarily due to their fertile land. 

On land pooling, Wahi says that devil lies in the details and if states would have followed the LARR in its full letter and spirit with proper Social Impact Assessment (SIA) and 70 per cent consent of affected parties for government projects and 80 per cent for PPP projects, there would not have been any conflict related to land acquisition anywhere in the country and no need for concepts, such as land pooling.  

“One has to look at the finer details of the land-pooling policy because many times, it has been seen that it is nothing but acquisition by private players under a different format,” said Wahi. 

In his interview, the Madhya Pradesh CM said that his state’s new land-pooling scheme will ensure that it “will make farmers partners in profit” once the land acquired from them is sold to private players, which leads to industrial and urban development.