Growing inclusively: The curious case of land acquisition

There is a widespread agitation around the country on the issue of land acquisition. It is obvious that if more roads, faster traffic, greater investment, industries have to come up, land acquisition will inevitably be the key. I am not getting into the debate whether this developmental model is the most suited for our needs at this moment. No matter which model we follow, rising consumer aspirations will require infrastructure which will need expansion of current capacity. How do we handle this process so that interests of not just farmers but also farm workers are served well besides that of other stakeholders without letting any one party extract too much out of such an asymmetrical situation.

My key argument is that current system which enables state to acquire land from farmers, pool it, reduce transaction costs of the investors, extract rent out of this in lieu of developmental services provided, is inherently flawed, unjust and unfair  because a) it doesn't create a stake of the farmers in the future gains that arise from rise in property value, b) make government an unfair rent seeker ( generating corruption through allocation of this scarce resource often in less than transparent manner), c) leaves landless labourers living in the acquired villages completely at the mercy of the market forces and makes no compensation to them and d) provides no skill upgradation opportunity to the farmers and labourers replaced in the process, even if farmers are giving a small portion of land for meeting their own residential needs.

Let me suggest certain measures which can be taken to improve the situation, make the growth more inclusive and participatory and fair and just to all stakeholders, including nature.
Few key principles which may be kept in mind are: a portfolio of compensation approach should be followed rather then giving most compensation as onetime cash payment, we should include labourers as legitimate claimant of compensation for the cost of disturbed livelihood and forgone access to common property resources of the villages for rearing livestock, crafts and meeting other needs and skill up-gradation should be a vital part of compensatory package. We should avoid the situation witnessed in many parts of the country where even the farmer, recipients of compensation blow it off in increased dowry rates, conspicuous consumption and become unskilled labourers, sometimes washing utensils and guarding houses of those who built houses on their erstwhile farms (if one wants to meet such people, please visit farm houses/colonies outside Ahmedabad or any other city).

My suggestions are: a) make landless labourers paying chulha tax to local panchayat and resident of villages whose land is acquired, as claimant of compensation, b) don't pay entire compensation as cash in one go, make it a portfolio of cash, bonds, medium duration deposits ( there can be different portfolios suggesting that those who prefer partly deferred gratification get higher amount than the ones who want immediate cash, c) develop training programmes for equipping man and women in providing various goods and services required in future ranging from running restaurant, to providing sanitation, gardening, repairs, plumbing and running various other services like creches , dry cleaning, washing etc., d) develop an entreprenurship development programme accompanied with a small regional venture fund constituted out of the rent collected by state, managed in PPP mode.

To some, it might appear utopian and too difficult because managing a complex of developmental opportunities will require NSDC and several other MSME promotion agencies a vital stake in the developmental process. If we don’t want crime rate to increase, security agencies to make millions, walls around housing/office complexes to become taller and secured through barbed wires and some people become internal refugees, destitutes and farmers and dalits to become poorer than before, then we have to change our polices. The cost of not going this way will be higher instability and who knows, a bigger revolution in future.

Anil gupta, The author is a professor at IIM-A