India's Economic Survey 2012-13, which was tabled in parliament on Wednesday, has called for a balance between the need to acquire land for economic growth and costs related to the displacement of its owners.
"For projects - such as the proposed national industrial and manufacturing zones - large-scale land acquisition may be necessary," said the survey authored by Raghuram Rajan, chief economic advisor to the finance ministry.
"Given that the people currently living on the identified land will suffer significant costs, a balance has to be drawn between the need for economic growth and the costs imposed on the displaced," it said.
The survey prescribed three important steps to create the balance in the policy - mapping land carefully, assigning conclusive title to facilitate land leasing, and creating a fair but speedy process of land acquisition for public purposes.
It also pointed out that the Land Acquisition, Rehabilitation and Resettlement Bill, 2011, currently before parliament, attempts to draw such a balance.
"As experience is gained with large-scale land acquisition, the institutions set up by the bill can be fine-tuned to achieve its aims," the survey said.
It suggested that land readjustment schemes should be encouraged, in which land owners participate by giving a part of their property, but get back the rest with the benefit that its value is enhanced by the infrastructure.
"Given that large-scale land acquisition is still at a nascent stage, central schemes should allow room for states to experiment and should be modified in light of state experiences," the survey suggested.