Not by fiat

Three months ago, President Bush issued an order stating that the US government must limit its use of the doctrine of eminent domain, which allows the state to compulsorily take over private property, such as land. The US Constitution provides for two conditions under which such compulsory takeovers can be done: "just compensation" must be paid, and the land must be taken over for the "purpose of benefiting the general public". In his order, President Bush added one more limitation, by stating that the doctrine of eminent domain may not be used "for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken".

This issue has acquired an urgent Indian relevance, now that the Congress Party chief, Sonia Gandhi, has thrown her weight behind farmers when it comes to their land being acquired for creating Special Economic Zones that will be developed by private parties (sometimes in partnership with state governments). Two demands have been made in this context: that the farmers must be given a share of the subsequent profits made by the companies that develop the zones, and they must be given jobs in the zones. In other words, paying the current price of the land (the practice followed so far) is not good enough when the option of selling or not selling is taken away from the owner of the land.

Three questions arise. Is this what fairness demands? Should a Bush-style distinction be made between projects undertaken by the government for the public good (like building a road or a dam) and by private parties who seek profits as their primary goal? And, would imposing the two conditions of profit-share and job assurance render desirable and even necessary projects impossible to execute?

To address the last question first, Reliance Industries' Mukesh Ambani is willing to pay market prices for the land that he proposes to acquire for his Navi Mumbai SEZ; he is also willing to give farmers an equity stake and jobs in the new zone""since the whole purpose of developing the zone is to foster economic activity and create jobs. He therefore believes that he will face no problems in acquiring a contiguous territory that will make his SEZ a reality. This is not to say that everyone shares his confidence. It does not take much effort to think of many industrial projects, and of course dams, where no action would be possible without the state's forcible acquisition of land""and in many of them it would be impossible to offer jobs to all those displaced. Posco's steel project in Orissa will displace no more than 450 farmers, but the company will find it hard to offer that many jobs to essentially untrained people with no skills relevant to an industrial context.

As for the distinction that President Bush has made between public and private projects, this is specious since the "public good" generated by a dam or a port is the same, whether it is in the public or private sector. Indeed, state governments have routinely used eminent domain to acquire land for dodgy public sector schemes, and of course for private industrial projects as well. The issue is not public or private but the extent of public good that will materialise, and whether that is sufficient for the government to enter into the transaction as an enforcing party.

The answer to these difficult and urgent questions may lie in replacing forcible acquisition (which is a right flowing from the days when kings were above the law) with a form of collective bargaining by those owning the land. If 75 per cent of the owners have been persuaded to sell because the price offered is attractive enough, then the rest should have no choice but to sell on the same terms. And irrespective of whether a project is in the public or private sector, there should be judicial review of the fitness of a case being subjected to such collective bargaining. With such a system, no one would feel short-changed. It might raise the cost of many projects, but that would be better than being saddled with requirements on job provision; in any case, in a country where the pressure on land is immense, a higher land price may be unavoidable and could be a test of the true value of a project. Finally, such an approach may even render Medha Patkar's activism superfluous when it comes to building dams.