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Development depends on land availability...

The lead taken by Chandrababu Naidu in acquiring land through the new land ordinance is bound to be followed by other states.

On 14 May, the Andhra Pradesh government issued a notification for acquiring land from farmers in the capital region in Guntur district. The ordinance will enable the government to make farmers who are not willing to part with their lands, to fall in line.

There is the urgency to complete land acquisition; the date of foundation laying of the new capital city Amaravathi has been fixed for 6 June. Municipal Administration Minister P Narayana stated : “the government is firm on its stand to build the capital in the identified land. If farmers do not give land under land pooling, it would be acquired under the Land Acquisition Act.”

The government had already informed the court that it would be acquiring lands this way. Already 33,000 acres had been taken through land pooling and additional 8000 acres would be acquired through such acquisition, if the farmers do not opt for land pooling.

Land acquisition for development has been a major problem. For decades, state governments have been acquiring land for purposes it deemed essential. The 2013 Act passed by the UPA government made it more difficult. This in part explains the slowdown of investments in industrial and infrastructure projects and to the reluctance of entrepreneurs, both foreign and Indian, to invest in India. P Chidambaram as UPA’s Finance Minister estimated projects that got stuck were worth over Rs 700,000 crore. Arun Jaitley estimates this higher at Rs 800,000 crore.

I point to a couple of specific instances on land acquisition stalling large investments:

•    In 2001-02 the Tatas planned to set up the Tata titanium project at Tuticorin to produce titanium. They set up an elaborate office with a renowned metallurgist as the managing director. After battling ten years for acquiring land, which they couldn’t, they gave up the project.

•    As early as 1993 Odisha Chief Minister Biju Patnaik dreamt of setting up a slew of steel plants in Orissa to leverage the vast iron ore, manganese and coal resources in his state. He acquired 12,000 acres of land. With liberalisation there was more interest. Several multinationals, including Korea’s Posco Steel and Lakshmi Mittal’s Arcelor Steel, were keen to  set up large capacity steel plants. Posco planned a 12 million tonne steel plant involving at then costs Rs 50,000 crore in 2004. After 11 years, it is still struggling to do this. Lakshmi Mittal and l others gave up their projects.  Tata Steel is the lone project at Kalinganagar that is taking shape. But the cost, originally estimated around Rs 16,000 crore, has shot up to Rs 40,000 crore.

In television debates the Arnab Goswami type circus of  presenting multi viewpoints dominated by representatives of political parties end up as fish market cacophony.

We have pointed out that over all these years urbanisation, infrastructure, factory buildings and social sector projects like hospitals and schools  account for less than 5 per cent of total land area; for all these purposes land is essential and cannot be acquired from the moon.

The average productivity of Indian agriculture is abysmally low. There is enormous scope for increasing productivity by reforming agriculture and providing for science, technology and management. The basic issue of high fragmented small sized land holdings needs to be addressed on priority. Agglomeration of land is an imperative. India has the potential to double food production in ten years and generate huge surpluses through agri exports. Sadly, in all the discussions this issue of vital concern doesn’t find a place.

The lead taken by Chandrababu Naidu in acquiring land through the new land ordinance is bound to be followed by other states. In the present system of larger powers and responsibilities to states, there will be healthy competition to record high growth and improve living standards through increase in job creation. For this, easy availability of land at modest prices is a sine qua non.

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