Land acquisition is a tricky question

The current efforts to rewrite the Land Acquisition Act of 1894 will not solve the conflicts, but the country does have an opportunity to at least lessen the rancour

Two words 8212; land acquisition 8212; invoke a torrent of controversy. They conjure up images of stymied infrastructure plans, political wrangling over SEZs, flashpoints like Nandigram, and, at best, endless public discussion, legislative action, and court proceedings that rarely culminate in something that everyone is happy with.

India is not alone in trying to navigate the tensions between private property rights and public purpose. Worldwide, the debate is on questions such as the following, on which land acquisition laws are often ambiguous:

8226; What is public purpose? Is general public benefit, which might include higher tax revenues, or 8220;development8221; of the area, enough? Or does the public have to own, control, and have open access to the newly repurposed area?

8226; When should public purpose override private property rights? This is tricky for democracies

8226; What is 8220;fair8221; compensation for somebody who does not particularly want to trade his land for anything else?

The current efforts to rewrite the Land Acquisition Act of 1894 will not solve the conflicts, but the country does have an opportunity to at least lessen the rancour. We have two main suggestions.

One, the new act should have a sliding scale for approving public purpose over private rights, with increasing weight to landowners8217; voices as the 8220;public purpose8221; becomes less direct. The current law lumps together public infrastructure, expansion of state-owned corporations, refugee settlement, and all-encompassing provisions for town or rural planning and planned development of village-sites. Until recently, it looked like SEZs might be included as well.

Story continues below this ad

Two, eminent domain powers would be strongest for projects that the public will have open access to and directly benefit from. Elected representatives or town planners could approve land acquisition through something like the current process, which would hopefully become less contentious if the compensation suggestions below were followed.

8226; Projects that will have restricted access or less widespread direct public benefits should require an overwhelming approval from the landowners and surrounding areas. This creates a kind of weighted public-interest test. A recent bill in Utah, for example, requires two-thirds of the city redevelopment authority boards and 80 per cent of people who live in proposed redevelopment project areas to sign a petition saying they want the land to be acquired under eminent domain

8226; Another weighting option could give even more power to affected landowners: let the group of affected landowners vote on the acquisition and compensation deal, and require a supermajority to sanction the deal in order for it to go through

8226; Compensation should be calculated at the time of acquisition, and linked to the public benefits obtained in any project. Market compensation should be based on the value at the time of acquisition, not on notification, as is now the case

Story continues below this ad

8226; Compensation should also factor in future value increases. Often the public project for which land is acquired increases land values for nearby landholders whose land does not need to be acquired. The person who gives up the land is compensated at the old valuation, while his neighbours are free to wait and sell at the new valuation enabled by the development of the project

Maintaining social cohesiveness and undertaking land acquisition need careful balancing. Both are equally important. Orderly land acquisition will remain an engaging challenge.

Regular columnist N.K. Singh and Professor Jessica Wallack of the University of California, San Diego, are collaborating on a book on infrastructure reform in India. Essays based on their research will appear on this page