The biggest constraint facing industrial development may no longer be poor infrastructure, it may be land. According to the series of reports being carried in this newspaper, just four state governments have to acquire 100,000 acres of land (to put this in perspective, the country's leading real estate developers have land banks of 5,000-10,000 acres each, which have been acquired over decades) for projects ranging from simple industrial ones to more complex special economic zones and integrated townships. As should be obvious from recent headlines, the process is not going well. The West Bengal government has failed to get 1,600 acres for the Tata small car project. The state government has to get another 34,000 acres for projects like the Salim township near Haldia. In Orissa, similarly, despite Posco changing its plans for its proposed 12-million tonne steel plant so as to reduce the land requirement from 5,000 acres to 4,000 now, the government is still not able to deliver. Just 450 families have managed to stall the project.
To a large extent, governments are to blame for this state of affairs. In Orissa, much of the land promised to Posco had been acquired by the government a long time ago, but since it didn't fence off the land, encroachers took over. If Posco decides to walk out because of these 450 families, the state stands to lose 48,000 permanent jobs in the plant and 467,000 jobs during the construction years, apart from significant tax revenues of more than Rs 1,000 crore annually. Even for individual families, it should be obvious that if rural incomes are to be increased, people have to be moved off the land—and Tata Motors has promised jobs to the families of those displaced. There should be an acquisition hierarchy—barren land over fertile land, single cropped land over double cropped land—but at the end of the day, land has to be made available or no industrialisation is possible.
Part of the problem comes from the state taking on the responsibility for acquiring land on behalf of industrial promoters. It is time industry learnt to negotiate with farmers and bought land directly—as some promoters of SEZs have been asked to do. If Reliance can be expected to acquire 15,000 acres of contiguous land in the open market, there is no reason why someone else cannot buy 1,500 or 5,000 acres. The state's responsibility should be restricted to stipulating zoning, so as to allow land to be converted to industrial/commercial use, and to saying that once (say) 75 per cent of land-owners in an area agree to sell, the rest should be required to do so at the market-clearing price. For the rest, the state's job should only be to ensure that there is no coercion in the acquisition process. This will de-politicise the issue and get the country away from protest fasts; once the question becomes not politics but price, matters will get sorted out between buyers and sellers.