Land Acquisition in India is a Giant Hurdle in Industrialization

The central and state governments in India received a lot of flak from farmers whose lands they were planning to handover to industrialists to establish industries or special economic zones (SEZs) that would run without much governmental interference or paying taxes, but would export their products or services. The clashes at Singur or near battles at Nandigram, both in West Bengal, have unsettled governmental moves and suddenly the darling of the villagers, the Communist Party of India (Marxists), which ruled the state of West Bengal for three decades, seems to be slipping in support. It has even antagonized the people and the state's chief minister Buddhadeb Bhattacharya seems to be out of favor with both the people and the political parties that support his government.

However, some new moves by industrialists seem to have attracted the attention of the public, through not enthused those being displaced. Reliance Industries boss Mukesh Ambani's grand plans to build a new city outside Mumbai (former Bombay) which equals it in half has offered the villagers ten times the market value of the land and also will return 1/8^th of the developed land to the original owners. Surprisingly even this tempting offer did not cut ice with the villagers likely to be affected by the take over of the land. Jindal Steels in a wise move in West Bengal and Andhra Pradesh have offered to compensate the farmers at market value and also issue shares in the company at par value. The Korean steel giant Posco is facing herculean task in acquiring land in Orissa in its plans to build a new green field steel plant there. It has offered several sops to the people and has even appointed staff to educate the people affected of the benefits that accrue to them with Posco establishing the steel plant. The staff is being chased away by the villagers.

The governments in India have not bargained for the wrath of the people over the acquisition of land for industrialization. It had all along been an easy affair. It seems to be no longer the case going by the recent agitations against acquisition of land. If the governments become a little more sensitive to their concerns and provide the following benefits there might be less resistance. One has also to be concerned of the loss of livelihood of people depending on the landowners such as small shopkeepers and laborers.

The people displaced have no particular skill or knowledge of even farming outside of what they have been growing for generations. The big bad world frightens them. They may not be able to survive in the new and often hostile environments. Hence a lot of effort has to be made both by governments and industrialists to first catalog the concerns of the affected people, and go about convincing them by proactive approach.

A few solutions that could neutralize the ill-will are suggested here (surprisingly they do not cost much). It should be noted here that once the industries come up and the land value of those people whose lands have not been acquired shoot through the roof. Hence, the displaced people are even at a greater disadvantage compared to their peers in the village and therefore need to be compensated with a likely rate that would prevail when the industry blossoms there. .

1. Housing with enough space for rearing cows, buffaloes and livestock

2. Medical facilities for family plus medical, accident and term insurance

3. Employment to most family members

4. Education facilities for children

5. Perennial lease rentals for the land, apart from one-time compensation equivalent to the current market price.

7. Shares of the company at par value

8. Subsidized or free food while on work

9. Low-cost loans for medical emergencies, marriages, etc.

10. Overall development of the neighboring villages

11. Benefits for present lease-holders of land and agricultural laborers displaced

There will be least resistance if the above facilities are provided to the farmer; otherwise, it would be construed as sell-out to corporates and violent agitations will be the order of the day. The benefits also do not cost much in relation to the overall benefit both to the corporates and to the society at large. The displaced persons should be provided help and training to run small-time businesses that would be needed in the new environment.

One should learn from the massive layoffs that Tata Steel has made several years ago at Jamshedpur when it switched over to a new efficient process that needed fewer people at work. In fact, with the kind of incentives that it gave to people the world did not know there was a massive parting. Such models should be emulated in these cases too. There will be less pain and great success in industrial activity in the country. Also, one should learn how China is able to achieve the kind of growth it has been achieving by displacing people from their moorings. Apparently, the relief must be excellent not to make it a big issue, despite the pain associated with parting.