Is land pooling better than outright acquisition?

Navinchandra Ghatwal had recently been to Magarpatta near Pune and he was amazed to see the development there.

Once a sleepy village, Magarpatta is now a sprawling industrial zone that boasts of residential neighbourhoods, a multi-specialty hospital, a shopping mall and many restaurants.

It is far removed from Khalapur, a town near Mumbai, where Ghatwal owns 30 acre of land.

The residents of Magarpatta, once marginal farmers, are now well-to-do, many of whom drive swish cars.

Thanks to a wise decision 25 years ago to pool their lands and rent it out for setting up industries instead of just selling out, the Magarpatta farmers earn far more than they used to by tilling their land.

"Over a year ago we villagers had been to Magarpatta Township and witnessed how it monetarily benefited everyone. For each acre owned, the owner is getting monthly rental of Rs 60,000," said Ghatwal.

He is now looking forward to a similar development at his native Khalapur, where an upcoming airport has thrown up such an opportunity.

Khalapur falls under the Navi Mumbai Airport Influence Notified Area (Naina), which covers the second airport that would cater to Mumbai, where the government is acquiring land under a pooling scheme.

Usually development projects invite huge opposition from the locals as it requires them to sell their land, which is an inflation-beating asset, and forces them to stare to at a bleak future when that money is gone, and possible uprooting from their ecosystem.

The country has seen several industrial projects stall for opposition to land acquisitions, but experts say a pooling scheme can change all that and encourage farmers to give up their land in lieu of monthly rent and other benefits.

It's also a win-win for the government and investors as it will only help in expediting the infrastructure and development-related projects. Abhaya K Agarwal, partner, infrastructure and PPP leader at EY, said this is the only way to move forward to acquire land for critical infrastructure projects, be it townships or road projects.

"Land acquisition is increasingly becoming a problem and there's a lot of negativity around it. Through land pooling, people can be reached out more effectively and it's is win-win for everyone. If underpasses or bridges are provided for movement of local population, it will be effective even for road projects," said Agarwal.

Maharashtra has taken a lead in adopting the new model for land acquisition and move projects off the drawing board.

The Gujarat, Chhattisgarh, Chandigarh and Andhra Pradesh governments too have found it better to go for land pooling scheme as against complex Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Laar).

In the case of Laar, the compensation is higher, making the project expensive or unviable. In land pooling, resistance is least and compensation amount way less than Laar, making it feasible for the project to take off, something that is unfolding in Ghatwal's Khalapur.

At present, Cidco, the nodal development authority for Navi Mumbai, is in the process of finalising the Naina scheme. It has taken close to three years for things to fall in place, a relatively short time considering the requirement of 3,800 hectare for the pilot project.

"People from Khalapur came forward and signed a Memorandum of Understanding for a total of 9,000 acre of land," said V Radha, joint managing director of Cidco.

Under the project, villagers would retain 60% of the land area. From the balance of 40% given to Cidco, 25% would be meant for developing infrastructure like roads, parks, markets, schools, healthcare, sporting facilities, etc, and 15% will be sold by Cidco to generate revenue for creating infrastructure.

Those who own more than 7.5 hectare of land will have to surrender a part of it to Cidco while those below that threshold will not participate in the pooling scheme.

"We have created grids for Naina, under which people have the freedom to surrender part of their plot. For example, if a plot owner doesn't want to part with the parcel, s/he is at freedom to do so. The surrounding plots can have urban spaces as per the development plan," said Radha.

"Those owning land parcel below 7.5 hectare will have to seek permission from Cidco to develop their lands. They will get FSI of 0.5 (their present FSI is 0.2) and have to contribute charge towards city-scale infrastructure," said V Venu Gopal, additional chief planner of Naina project.

Those who participate in the scheme will not have to pay development charges and get monthly rent depending on the modalities.

Owners of smaller plots will also get a share certificate in the company that will be formed for the project. "Share certificate will be issued for each gunta (0.024 acre) of land. The worth of shareholding for each gunta will be Rs 2.5 lakh," said Ghatwal.

With success in Navi Mumbai project in sight, the Maharashtra government is extending the scheme to other projects – latest being the Mumbai-Nagpur Super Communication Expressway.

The state cabinet gave nod to the policy on June 5 for the 710-kilometre long highway connecting Mumbai and Nagpur through Nagpur, Wardha, Amravati, Washim, Buldhana, Aurangabad, Jalna, Ahmednagar, Nashik and Thane before finally touching Mumbai.

"This is a path-breaking, landmark policy. The Cidco has tried this out to an extent in Navi Mumbai, but now this policy includes new points," said state chief secretary Swadheen Kshatriya.

Around 22,000 hectare will be needed for the alignment between Bhiwandi and Nagpur. The corridor will pass through 350 villages from 27 talukas. As a compensation, non-cultivable land owners would get developed plot(s) for commercial exploitation. The size of the plot(s) would be 25% of the area given up by them. For those having irrigated or cultivable land, it would be 30% of the land given up. Also, if a plot is given up for a Node, compensation would be 30% of the land as five new townships are planned along the corridor.

"Unirrigated and irrigated farmers will stand to get annuity of Rs 50,000 and Rs 1 lakh per hectare with a provision of 10% hike every year for a decade," said a Maharashtra State Development Corporation official.

Other states too are gung-ho about such a scheme.

"This policy has been put into effect in Andhra Pradesh and Gujarat, but I am not very sure how useful will it be for an expressway. It will be good for townships planned along the highway corridor," said Vishwas Udgirkar, senior director, Deloitte.

The locals will get various benefits, he said, stressing on the need for more flexibility to adopt various kinds of land acquisition models.

Meanwhile at Khalapur, the locals are in conversation with the various departments of the state government to sort out taxation issues. The plots are reserved as agriculture land and nothing apart from farming is allowed. In order to convert the reservation into non-agriculture land, the taxes running into several crores will have to be paid by the land owners. "We have proposed if the tax can be paid at a later stage when we start generating funds from the land development," said Ghatwal, who is affiliated with Shiv Sena, ruling ally of the state government.

If the idea is accepted, it will also ensure that the implementing government agency doesn't face stiff opposition from the locals, but the government will have to keep a check on tax recovery at a later year. While the developers stand to gain by having their residential or commercial structures, investors too get returns from the rising market value of the real estate in the area. Locals, by retaining 60% of the land, too benefit from increase in property value and amenities in place along with better connectivity.

For the proposed Navi Mumbai airport, there is a mix of Laar and land pooling.

"A majority of 95% of the population have given consent to surrender their homes and plots, in lieu of three times of other piece of land in the vicinity. Only 5% opted for monetary compensation as per Laar, wherein they do not stand to get any alternate land," said Vijay Patil, head of rehabilitation and resettlement department in Cidco.

The other benefits for residential structure owners are 100 shares to each of the families in the special purpose vehicle that will be formed for the airport, 50% of development contracts for locals, vocational training, logistics cost of Rs 50,000, rent and one-time compensation of Rs 1.60 lakh. Whereas the land owners would get 22.5% of the land lost for the project in the developed plot in Pushpak Node.

Even for establishing a new state capital of Amravati, Andhra Pradesh government adopted land pooling model and smoothly got 33,000 acre, or 13,355 hectare, of land. So did Naya Raipur (Chhattisgarh) and Chandigarh apart from Gujarat.

At Naina, other infrastructure is also being readied. The 'smart city' is expected to draw 118 million litres of water daily from Patalganga River and Morbe Dam, while power will be supplied by a private electricity firm from its nearby hydropower plant.

But there's a word of caution, too.

The land pooling , like any other government policy, seems attractive on paper. But it has to be seen whether the model would benefit only with large landholdings.

Among the few big land owners in the Khalapur area is a developer based in eastern Mumbai suburbs, a top industrial empire, a foreign firm and local big shots. While it is certain that the bigger players will make windfall gains, the smaller fry of the 11 villages will have to keep their fingers crossed to become part of the new-age urban and smart India.