FROM BUSINESS WORLD OF 5 FEBRUARY 2007
Plea for a new
type of town
Governments have
traditionally given themselves the right of eminent domain – the right
compulsorily to acquire private property. The justification given is public
interest – for instance, in building roads, ports and airports. Our socialist
governments prior to 1991 exercised the right with abandon. They extended it to
running businesses as well, many of which they nationalized. And when it suited
them, they not only sequestered property, but also expropriated it. For
instance, it took away closed textile mills without paying anything for them.
Tempted by the central government’s self-appropriated largesse, state
governments also helped themselves. In this way, a regime of proprietorial
lawlessness came to reign.
This culture of
the government helping itself to whatever took its fancy underwent a change
after 1991. The government wanted foreigners to invest in India. It did not
care what its own investors thought of it, but if foreigners thought that it
could just take away their investments, as it did with refineries in the 1970s,
they would give India a wide berth. They had done so and gone instead to
Southeast Asia; by the 1990s, Southeast Asian economies had a commanding lead
over India. The government did not change any laws or give any guarantee
against nationalization. But it let it be known that it had changed its
stripes. On the basis of this informal assurance, the country has received
significant though not copious foreign investment inflows.
Meanwhile, the
current boom has led to growing demand for land. As urban property has filled
up and its prices have skyrocketed, new enterprises have sought to set
themselves up on virgin land. As they spill out of cities, so do the people
they employ, who want new residential complexes and multiplexes. And lured by
the promise of shining temples of business and burgeoning jobs, state
governments have willingly put their powers of compulsory acquisitions at the
disposal of companies.
From time to
time, these campaigns to remove original residents from sequestered land have
erupted into violence. Generally, governments have shot a few, beaten up a few
more, and suppressed resistance. But as industrial growth has accelerated,
instances of such violent repression have multiplied. They have been
particularly endemic in West Bengal, and have brought it unwelcome publicity.
But they are not absent elsewhere. As Special Economic Zones proliferate,
violent confrontations between landowners and governments threaten to spread escalate.
The central
government has been indifferent to the disturbances. But recently it struck the
politicians in Delhi that their electoral prospects may be adversely affected
by the anger of farmers at forcible acquisition of land. So for acquisition of
agricultural land by SEZs, the government proposes to bring legislation that
would set minimum standards for compensation to farmers. There is also the idea
that ‘fertile’ agricultural land should be exempted from acquisition.
In principle,
there should be no difficulty in compensating farmers because the value of land
is much greater when it is used for industry, services or urban development than
if it is farmed. In fact, it is so much greater that legislation should be
unnecessary. It is not because of inadequate compensation for land that West
Bengal, Orissa and earlier, Madhya Pradesh, have seen repeated disturbances
over compulsory acquisition. The causes are local. In Singur, it was a large
section of the population that was employed on the farms but did not own them;
it feared loss of jobs, not of land. In Orissa and Madhya Pradesh, it was
indigenous people who had no alternative to its traditional subsistence
agriculture and that faced the loss of the only livelihood they knew. Gujarat
offered the displaced tribals of Narmada valley generous compensation; but
inexperience of modern ways – fertilizers, pesticides, markets – made it
difficult for them to adjust to a new lifestyle, and many ended up as destitutes
and poor landless workers.
Continuous, unencumbered
tracts of land often cannot be made available to industry without compulsory
acquisition; and it often causes great suffering. Laws on compensation for
land, however generous they might be, are quite inadequate and often
inappropriate for dealing with the disruption of lives. Such disruption is
unavoidable to some extent, but it must be minimized.
There is another
reason why the current proliferation of SEZs, industrial zones and residential
complexes is undesirable. The more dispersed they are, the greater the traffic
they will generate, the greater the fuel consumption and waste of time.
Hence we need to
work out how to have maximum development with minimum use of land and
multiplication of locations. We should develop a smaller number of larger townships
closer to ports and airports. Development should be as vertical as possible,
road capacity should be large enough to accommodate long-term requirements, and
space should be provided for the pedestrians and peddlers that India inevitably
generates. Indian cities of the 21st centuries cannot be like
European cities of the 19th century; they must designed around
today’s technology.
