How much land does a nation need?

In Russian novelist Leo Tolstoy’s famous story, How Much Land Does a Man Need?, a peasant is told he can have all the land he can traverse in a day. Rising early, he begins to run to cover as much ground as possible. At the end of the day, exhausted, he falls dead and is buried in a 6ft grave.

Change of land use is essential for a developing economy. Agriculture supports 60% of the population, occupies 60% of land area and generates 18% of gross domestic product (GDP). Moving people out of lives of quiet agricultural despair is the need of the hour.

Restrictions under the land acquisition law enacted by the United Progressive Alliance (UPA) government are alleged to have held up infrastructure projects worth nearly ₹ 20 trillion in rail, steel, mining and roads, although delays in other clearances may account for the lion’s share. The new government has proposed an amendment which has also run into rough weather from the agriculture lobby. This amendment waives the consent clause and even the social impact assessment, relaxes requirements to return unused land after a certain number of years, while retaining the compensation fixed in the 2013 Bill for land-holders (not all those dependant on the land, a far greater number).

As per the Swaminathan report on agriculture, India has to aim for self-sufficiency in its staple food basket and cannot rely on imports. Further, we cannot ignore ecological concerns, or the welfare of those whose lives stand to be uprooted by land acquisition. India’s record of compensating and rehabilitating displaced people is poor. This lack of institutional capability has time and again led to distress, protest, political upheavals and insurgency. The removal of the consent clause makes it doubly incumbent that the land acquired by the government for the private sector be truly used for public purpose, the heart of the eminent domain doctrine, not the accumulation of pelf.

As a democratic society, we seem to be stuck between a rock and a hard place. However, the Gordian knot can be snapped by probing for more efficient tradeoffs. The approach involves a combination of better utilization of already acquired land, aligning estimates of land need with the availability of other critical inputs, and using new technologies to plug holes in the rehabilitation process.

The efficiency of usage of already acquired land, both by the government and the private sector, is poor. For instance, Coal India controls 200,000 hectares of land of which only 25% is under active mining. Operating mines are not functioning to capacity. The coal supply chain is mafia controlled.

Since the enactment of the Special Economic Zone (SEZ) Act, 2005, only 37% of the 60,374 hectares approved for 576 SEZs is being used. The audit of the Comptroller and Auditor General of India (CAG) of SEZs reveals that only 16% of land in the processing area is being used as against a norm of 50%. Why is this under-utilization happening if land is indeed scarce?

One may argue that even the optimal use of already acquired land will not suffice to meet our development needs. Indeed, our long term energy capacity needs to grow at 7-8 % a year for the next 20 years cannot be met from existing coal fields alone. However, in a scenario where there are multiple inputs in the growth process, the question is not whether one needs more land, but whether land is the operative bottleneck given all the inputs required. As the story goes, when chased by a tiger, all one needs to do is run faster than the other person.

One of the most important bottlenecks for our growth is the unavailability of a skilled workforce. Even if we acquire land for smart cities, it will take some time for the emergence of skilled workers who can take up manufacturing jobs. The skill bottleneck not only makes it possible to go slower on land acquisition, but also feeds into the issue of reducing opposition to acquisition.

The ability to transfer compensatory amounts directly to bank accounts, of all project affected people, can also be an advantage, albeit a small one as the cash compensation is often frittered away, even when paid as an annuity. The avoidance of social responsibility by a corrupt government-business combine riding on the militarization of zones of industrialization must also be avoided.

The problem of land acquisition needs to be recast as the problem of efficient use of land, including the reclamation of unutilized land, the optimal alignment of complementary inputs, and the honest discharge of social responsibility aided by technology.

The most important challenge will be to ensure that the public sector and big business that have the most privileged access to land, use it more efficiently.

This will require the recalibration of the power structures that promote inefficient usage. The tradeoff is not between development through land acquisition and more humane treatment of the displaced, but between development through greater efficiency in land use and development through unnecessary displacement of people, ecologies and cultures.

If we choose the right tradeoff, then, unlike Tolstoys’ peasant, we will not need to dig graves, others’ or our own.

Rohit Prasad is an associate professor of economics at MDI, Gurgaon.

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