No one expects an easy resolution of the Singur issue as it centres on a scarce commodity: land. The problem is particularly acute in states whose economic mainstay has been agriculture. In their drive for industrialization, they did not pay enough attention to the matter of land rights. The danger is that if test investment cases such as those of Tata Motors and steel player Posco fail, there will be little or no investment in states such as West Bengal and Orissa.
Illustration: Jayachandran / Mint
The facts are quite clear. Tata Motors had been promised 1,000 acres of land to set up a state-of-the-art manufacturing facility for Tata Nano. Of that, the acquisition of 400 acres came under a cloud as the owners refused to accept the cash compensation given by the government. The situation was festering till Mamata Banerjee inflamed it almost to the point of no return.
A similar situation exists in the Jagatsinghpur district of Orissa where South Korean company Posco plans to set up a $12 billion project. Residents of the villages in the district claim that 20,000 villagers will be affected if the plant is established.
We believe such conflicts are not easy to resolve, at least in the conditions that exist in India at the moment. There are interlocking factors that make any smooth furthering of industrialization virtually impossible. Agricultural land in such places has been intensively cultivated for centuries. In the process it has also been sub-divided many times over. This presents formidable problems for the state governments concerned to consolidate land and parcel it out to industry.
That, however, is not the root problem. Economic stagnation in these states has created perverse incentives whereby land fragmentation carries no disincentive. Where alternative employment is not available, it makes sense to own a patch of land — even if it defies economies of scale — to eke out a living.
Unfortunately, governments that realize the importance of breaking this vicious cycle don’t have adequate political resources for the task. The travails of the Buddhadeb Bhattacharjee government are explicable in this light. What is required is a new law, one that replaces the antiquated Land Acquisition Act, 1894. The 1894 law is clearly unjust and is being resisted on the ground. It’s time to evolve a political consensus that takes into account the conflicting demands of industrialization and sustenance for those who own the land.
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