You are here: Rediff Home » India » Business » Special » Features
Search: The Web

Infrastructure: Crippled by the land hurdle
 · My Portfolio  · Live market report  · MF Selector  · Broker tips
Get Business updates:What's this?
March 27, 2009

It is a matter of regret that the government's bid to spend more on infrastructure projects, to provide a stimulus for the economy, has not delivered on this objective because of that familiar problem -- hurdles in the way of land acquisition.

An official review of projects that have been held up is reported to have revealed that as many as 70 per cent of the 190 delayed works are victims of roadblocks in the way of getting land. These include nearly 60 projects of the Indian railways, 40 of the National Highways Authority of India and 20 power projects. Some of them have been in limbo for over a decade and may have to be shelved eventually, as cost estimates have gone haywire.

Protests by land owners against the forcible takeover of their land, as seen in Singur and Nandigram, are not the only reason why land could not be acquired for these projects, though it is of course the most common reason. The dispute between state governments and the Centre over the manner of recompensing affected land owners has been found to be an equally significant factor. In some cases, the lack of environmental clearance has come in the way of executing the projects.

The genesis of the land procurement problem can be traced to the outmoded Land Acquisition Act that provides for the arbitrary fixation of land value, without negotiating with the owners. This naturally breeds discontentment among those who stand to lose their land, resulting in protests and litigation.

Since many states have put in place their own land acquisition and rehabilitation laws, which are at variance with the Central statute, disputes also arise between the Centre and states over the compensation to be paid to land owners.

And the fact that land prices in rural areas has spurted appreciably in recent years, owing in part to the expansion of rural roads and therefore improved accessibility, has made it all the more difficult to find willing sellers of land at the official acquisition rates.

Given such a scenario, there can be little doubt that the target set by the Planning Commission, to increase infrastructure spending to 9 per cent of the gross domestic product by 2012, is unlikely to be met.

The solution lies in amending the laws concerning land acquisition, and relief for and rehabilitation of the affected people. Though the outgoing United Progressive Alliance government cannot be accused of having been indifferent to this issue, it perhaps did not display sufficient urgency in dealing with the problem.

The Bills to amend the land acquisition and rehabilitation laws were introduced only on the penultimate day of the final session of the Lok Sabha. Though the government managed to get both Bills passed without debate, and in the absence of the opposition, it faced stiff resistance in the Rajya Sabha at the introduction stage and finally lapsed.

The Bills had key provisions which were controversial in nature and needed to be properly debated and, perhaps, even amended.

Powered by

More Specials
  Discuss  |    Share with friends  |    Print  |    Ask a question  |    Get latest news on your desktop

© 2009 India Limited. All Rights Reserved. Disclaimer | Feedback