Too much land being used for farming and too many people surviving on it are the marks of a backward economy. A modern economy, on the other hand, devises ways to make industrial and other commercial uses of land, thereby reducing the people’s dependence on agriculture. The new land acquisition bill, which was passed in the Lok Sabha last week, is a long-awaited move to facilitate the availability of land for setting up industries and infrastructure projects. The old land acquisition act, dating back to 1894, was simply unequal to today’s challenges. The new bill has laudable aims — it seeks to protect farmers from forcible acquisition of their land by either the government or entrepreneurs, and it provides for “fair and just” compensation to those whose land will be acquired. The bill also makes it mandatory for those acquiring land to get the consent of 70 per cent of the landowners for ‘private-public partnership’ projects and of 80 per cent in the case of private entrepreneurs. None can deny that the farmers, for most of whom land is the only asset, must be made stakeholders in any commercial use of land. The bill may well help the beleaguered United Progressive Alliance government get support from farmers in next year’s parliamentary polls.
However, the progress of the Indian economy is a much larger issue than that of the electoral fortunes of either the UPA or its opponents. Ultimately, the issue is one of expediting the transition of the farm-based economy to an industrial one. There are strong reasons to doubt if the new bill will help that transition. The rates of compensation for acquired land — four times the market price in rural areas and twice that in urban areas — may push costs of new projects too hard to make them viable. More important, it may prove to be extremely difficult to secure the consent of 70 or 80 per cent of landowners for the acquisition of land. Also, the bill’s provision allowing state governments to frame their own laws may lead to worse complications. It is no wonder that chambers of commerce and industry are unhappy with the legislation. It is not enough for the government to win the sympathy — and votes — of farmers. The crucial thing is to make it simpler and faster for industries to acquire land and for farmers to get fair compensation. It is no use making laws that will complicate, rather than help, matters.