Fixing the land acquisition problem

Rarely has a Parliamentary legislation created as much heat and dust as the Land Acquisition Act 2013, which came into force early this year. Many State governments have come out openly against specific provisions of the Act and industry, which has often found acquiring land a cumbersome task, feels their job has been further complicated.

The new Act, which seeks to replace the archaic Land Acquisition Act, 1894, has been formulated keeping in view some genuine concerns with regard to rehabilitation and resettlement of the land owners and ensure fair compensation keeping in mind the loss of livelihoods.

Often, the land owner/farmer was seen being uprooted from his only source of livelihood for the benefit of the industry or large infrastructure projects and does not receive a fair deal or market price for the land.

The new law has provisions for Rehabilitation and Resettlement in the case of specified private purchase of land; provides for a Social Impact Assessment (SIA) study in all cases where the Government intends to acquire land for a public purpose; puts limitations on acquisition of multi-crop land for safeguarding food security; requires consent of 80 per cent of the affected families for land acquisition for private sector and 70 per cent of affected families for PPP projects under ‘Public Purpose’ etc.

But there are serious concerns that the timeframe for execution will render the process of land acquisition unviable, thus stalling investments, more so at a time when there is intense focus on reviving the manufacturing sector.

As we all know ‘Change in ownership of land’ lies at the heart of ‘Acquisition’.

Ownership of land is a very emotional issue for most and the fear of losing their land permanently inevitably generates resentment and resistance among potential land oustees.

So, how does one manage the land requirements for the industry while retaining the interest of the land owners?

Model law needed

A simple alternative, I believe, would lie in agriculture land being made available through a long term lease based approach.

A Model National Land Leasing Guideline, which enables long-term leasing of agricultural land to private parties while ensuring the continuity of ownership, can go a long way in resolving the concerns of land owners.

This arrangement will not only provide land owners/farmers with regular income from the land but also help improve occupational mobility by encouraging people to enter new vocations.

This approach obviously requires proactive initiative from state governments, as leasing of land is a State subject. States like Rajasthan and Punjab have already undertaken some pioneering work in this regard.

In Rajasthan, the Government in its Agro policy 2010 allowed leasing of Government land for for captive production and consumption (15+15 years) in the case of projects with an investment of Rs 50 crore or more.

Punjab in comparison follows a more open ended Lease Policy, where the lease period is agreed upon as per mutual agreement between the lessor and lessee.

The legislation in Punjab has ensured that (a) the land reverts back to the owner at the expiry of lease period and (b) the lessee will not have any tenancy rights after the expiry of lease period.

In another instance of progressive action, the state government recently issued a notification under the Punjab Village Common Lands Regulations Act allowing panchayats to lease out village common land to private parties for industrial, educational and commercial purposes for 33 years, which can be further renewed for a maximum period of 33 years.

The Model National Land Leasing Guideline can improve upon the provisions of these state laws to encourage other states to introduce similar laws.

Long term leasing can offer dual benefits to farmers and other land owners. They can not only continue to own their land and earn rental income from their land but find gainful employment in these projects to earn wages as well. In the case of farmers, it potentially de-risks their incomes from the vagaries of the weather or the prices of commodities, while avoiding a debt trap with money lenders.

Corporates can fast track much-needed private investment in agriculture as well. In fact, thousands of farmers can become partners of such corporates and grow crops, as per their requirements.

The private sector will provide them with farm technologies and modern farming techniques, good quality seeds, extension services and training to help them improve productivity, which will result in enhancing farmers’ income levels.

Once States allow leasing of land we can look at models where dedicated institutions like State Land Bank Corporations (SLBCs) are set up for acquiring fallow, barren and unproductive land, ex-ante , for industrial purposes.

The job of these SLBCs will be to acquire large tracts of non-cultivable and other land, develop them as land banks for future and follow a transparent mechanism to pass them on to the private sector.

A National Model Land Leasing Act for agricultural land and setting up SLBCs can effectively address the weaknesses in the current regime of land acquisition and help break the rigidities in the land market.

Such a change can help build win-win partnerships between affected populations and the private sector.

This will not only ensure higher agri yield per hectare to help tackle the food security issue but facilitate faster project execution in other sectors as well to accelerate growth, employment opportunities and reduce poverty.

The writer is Vice Chairman of Bharti Enterprises

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