As India aspires for economic growth, it will need land for Industry and Urbanisation, to create more jobs. Here's an examination of what is ailing the Landing Acquisition system, and recommendations for amending these.
2. Land AcquisitionThe Analysis
The key to prosperity is jobs!
For larger numbers of Indians to prosper, !
many more well paid jobs need to be created.!
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Agriculture is already over-supplied with manpower, !
so these jobs can only come from manufacturing and services. !
These are located in industrial zones and urban centres.
3. Land AcquisitionThe Analysis
And to create jobs, !
Manufacturing !
and Services!
need Land!
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Land is required for urbanisation, for industrial zones and for infrastructure such as
roads, ports, airports and power plants to support the economy and urban society.
5. Land AcquisitionThe Analysis
How is land used in India?!
Why can’t industry use non-fertile land and let agricultural land be?!
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Because, Industry needs inputs like water, access to roads and proximity !
to population centres - inputs usually important to agriculture too.!
So for more and more Indians to get well paid jobs and prosper,
Some Land has to be diverted from agriculture !
to industry and urbanisation.
6. Land AcquisitionThe Analysis
Some Land has to be
diverted from agriculture !
to industry and !
urbanisation. That is a
significant conclusion!
Any other evidence
to support this?
7. Land AcquisitionThe Analysis
AGRICULTURE uses 152 mn hectares
of land and contributes 14% to India’s GDP
Source: Draft National Land Use Policy, CSO
Can Agriculture alone bring prosperity?
8. Land AcquisitionThe Analysis
AGRICULTURE uses 152 mn hectares
of land and contributes 14% to India’s GDP
Source: Draft National Land Use Policy, CSO
INDUSTRY and URBAN centres
use 11.6 mn hectares to contribute 68%
Can Agriculture alone bring prosperity?
9. Land AcquisitionThe Analysis
Can Agriculture alone bring prosperity!
for more and more Indians?
A Hectare under AGRICULTURE !
supports 5.5 people
Source: Census of India, 2011
10. Land AcquisitionThe Analysis
A Hectare in INDUSTRY & URBAN use
supports 32.3 people
A Hectare under AGRICULTURE !
supports 5.5 people
Source: Census of India, 2011
Can Agriculture alone bring prosperity!
for more and more Indians?
11. Land AcquisitionThe Analysis
A combined look at these numbers …
If every hectare of !
agricultural land is !
producing Rs 100 …
12. Land AcquisitionThe Analysis
… then every hectare of land under industrial and urban use produces Rs 6,400!!
Clearly, agriculture cannot create prosperity for more and more Indians.
If every hectare of !
agricultural land is !
producing Rs 100 …
A combined look at these numbers …
14. Land AcquisitionThe Analysis
Source: AskHOW Analysis
Will we have land to grow enough food?!
If India’s entire population was to be housed in urban areas, and if
everyone was to work in industry and service sector, even then …!
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The incremental land requirement for this seismic shift would be
25.5 million hectares or 17% of the present agricultural land.
17%
152 mn hctr
26 mn hctr
11.6 mn hctr
15. Land AcquisitionThe Analysis
Will we have land to grow enough food?!
Food Production = Productivity / unit of land x Amount of Land
As an example, let us examine Rice yield numbers, across geographies …!
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Clearly there is scope for improvement, and if land!
for agriculture goes down, impact can be mitigated!
by better productivity. !
Between 1950 and 2013, India has increased wheat yields 6-fold. Despite this, we are far
below world standards. As per FAO, yields for wheat can be further improved by 56%
without any significant investments. A similar story repeats across most other crops.
China
World
India 2.3
4.4
6.5
16. Land AcquisitionThe Analysis
Another point of view possibly aiming to maximise Food Production, is that !
Multi crop land cannot be sold to Industry
However well intentioned this may be, !
the result is that children of farmers!
with multi crop land have no choice but to!
pursue farming as a profession - when!
even neighbours with one crop land!
would be free to pursue other careers.
17. Land AcquisitionThe Analysis
So for larger number of Indians to prosper: !
Agricultural land needs to be made available for industry and urbanisation. !
! ! ! ! ! ! ! ! ! ! ! ! ! Views echoed by …!
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Prohibiting the use of agricultural
land for industries is ultimately
self-defeating.!
- Amartya Sen
Source: http://www.telegraphindia.com/1070723/asp/nation/story_8094453.asp
18. Land AcquisitionThe Analysis
So land is to be sold
to industry for it’s use.
What’s the problem? !
The system for buying !
and selling land to industry
is convoluted.
20. Land AcquisitionThe Analysis
Land Owners!
think they do not get complete financial value, !
and are unhappy with rehabilitation
The Players in the Convoluted System
21. Land AcquisitionThe Analysis
Industry!
feels fettered as process takes too long!
and the process is very bureaucratic
Land Owners!
think they do not get complete financial value, !
and are unhappy with rehabilitation
The Players in the Convoluted System
22. Land AcquisitionThe Analysis
Industry!
feels fettered as process takes too long!
and the process is very bureaucratic
Land Owners!
think they do not get complete financial value, !
and are unhappy with rehabilitation
The Middlemen!
exploit insider knowledge, and buy out !
land early to make windfall gains
The Players in the Convoluted System
23. Land AcquisitionThe Analysis
Industry!
feels fettered as process takes too long!
and the process is very bureaucratic
Land Owners!
think they do not get complete financial value, !
and are unhappy with rehabilitation
The Middlemen!
exploit insider knowledge, and buy out !
land early to make windfall gains
The Government!
has to interfere because !
of the broken system
The Players in the Convoluted System
24. Land AcquisitionThe Analysis
In a normal sale like buying a used car … !
we have a willing seller, a willing buyer !
and price is determined by the market.!
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For Land too, as far as possible, acquisition should !
be on a willing buyer - willing seller basis. !
Also in typical Land deals, sellers are small farmers with low bargaining !
power compared to the larger, more organised and resourceful buyers - !
so mechanisms should be put in place to protect sellers in such instances.
The Ideal System
25. Land AcquisitionThe Analysis
But willing seller - willing buyer is often not !
the case in land deals with Industry, and …!
the Government buys land from sellers - often
compulsorily - and uses or sells this land for !
industrial, urban or infrastructure development.
The Actual System
27. Land AcquisitionThe Analysis
WHY GOVERNMENT BUYS LAND FOR INDUSTRY!
A.1) Land records in India are unreliable.!
In the absence of accurate and updated land records, being
taken to court by ’n’ individuals with conflicting claims as
true land owners would become a common occurrence. !
So, Industry insists on dealing with the Government.!
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SOLUTION!
Digitisation of land records for an irrefutable
proof of true land owner, so that a sale can be
legally complete.
A) India specific Problems
28. Land AcquisitionThe Analysis
WHY GOVERNMENT BUYS LAND FOR INDUSTRY!
A.2) Different process and agency for zoning, and
for conversion of agricultural land use!
This opacity ensures that existing land owners cannot take
advantage of the reallocation of land and capture the value
appreciation through land use change. !
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SOLUTION!
Transparent, rule based guidelines would
ensure that politically connected individuals
do not make windfall guides.
A) India specific Problems
29. Land AcquisitionThe Analysis
Specific projects like roads, railways, city expansion and airports need specific linear
or contiguous land. But few land owners could block the project if they refuse to sell.!
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In such cases across the world, Government’s act in the larger
interest of citizens and resort to Compulsory Land Acquisition.
Why Government buys land for Industry
30. Land AcquisitionThe Analysis
B.1) Compensation to land owners from whom land
has been compulsorily acquired is often delayed,
as is their rehabilitation.!
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SOLUTION!
• Mandate timelines for delivery compensation
and for rehabilitation and resettlement!
• An independent regulator for monitoring
B) Problems with Compulsory Acquisition
31. Land AcquisitionThe Analysis
B.2) Land sales have a very high cash component so
official records do not reflect accurate prices.!
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SOLUTION!
• The multiplier used to calculate compensation
has to be different across different regions
B) Problems with Compulsory Acquisition
32. Land AcquisitionThe Analysis
B.3) Land owners often do not have financial skills
and often end up wasting their money.!
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SOLUTION!
• Financial training should be provided for land
owners to conserve and invest savings for
regular income
B) Problems with Compulsory Acquisition
33. Land AcquisitionThe Analysis
B.4) Land owners are economically stranded and
unable to get employment or new professions!
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SOLUTION!
• Vocational training should be given for land
owners to contribute and integrate with society
B) Problems with Compulsory Acquisition
34. Land AcquisitionThe Analysis
B) Problems with Compulsory Acquisition
B.5) The wider community of indirect dependents
like landless labourers, potters, ironsmiths,
repairmen and shopkeepers may not be
rehabilitated.!
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SOLUTION!
• The government’s new ordinance mandates a
Social Impact Assessment to identify and
ameliorate the wider community, but for 5
sectors like defence and affordable housing this
step has been relaxed. This temporary solution
has to be quickly plugged.
35. Land AcquisitionThe Analysis
B.6) Insiders with access to upcoming developments
buy land in advance from land owners and capture
the greatest value appreciation!
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SOLUTION!
• By having long term zoning and guidelines for
conversion of agricultural land use, the insiders
advantages can be minimised!
• Insider trading laws need to be put in place
B) Problems with Compulsory Acquisition
36. Land AcquisitionThe Analysis
B.7) Government officials are often slow to act as
moving fast could be perceived as favouring one
constituency over the other, possibly for unfair
personal gain.!
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SOLUTION!
• Trained on broader Urban planning principals,
Government officials need a Policy framework
to transparently guide their acquisition actions!
• In cases where land ‘choice’ is possible, reverse
auction tendering can reduce the incentives for
‘front-runners’
B) Problems with Compulsory Acquisition
37. Land AcquisitionThe Analysis
Where possible, land should be diverted !
on ‘willing seller - willing buyer’ basis,!
with mechanisms to ensure fair process for sellers. !
When Land is compulsorily acquired, conflict is
inevitable and the process can only !
be made more fair and just.