SEZ in India: Public purpose and Private property

After the liberalization of the economy in 1991, India in its quest for
growth is facing a sensitive problem of acquisition of farm lands to build
factories and urban centres. The case in point deals with two such
deadlocks, one that emanated during 2007 in West Bengal when the state
government had to deal with the disgruntled farmers who contested that
their lands were forcibly acquired from them at below market prices to
build a SEZ in Nandigram. Another one was a similar protest in Singur that
followed the Nandigram incident where the acquired lands in contention
were earmarked for Tata Nanos production facility. In both the cases the
state government had to yield to the pressure from the protesting farmers
and opposition parties.
The strategy of WB Government:
The West Bengal state government was pushed into a delicate situation
where it had to diplomatically handle the displeased farmers and
simultaneously pursue its push for growth. In land acquisition, the primary
discontent faced by the farmers is because of the unfair prices that are
being thrust upon them. The farmers who had sold that the land earlier
also feel cheated when the state government steps into provide subsidies
and a price above the market value to acquire the remaining land. This
poses a problem of equality. In addition to this, disputes arise in the
rightful ownership of lands as well due to the inheritance associated with
land ownership in India. Thus, some farmers are not even notified about
the governments order and hence do not have enough time to respond.
There is also the problem of middlemen buying these huge chunks of land
at throwaway prices and then selling them to the government/corporates
at high prices. Another major issue that was at the centre of this debate is
how to estimate the compensation for the damage incurred to the
livelihood of the farmers and the dependents of the acquired lands. The
lack of other skills required for employing them in any semi-skilled or high-
skilled positions complicated the problem further as rehabilitation would
be a daunting task.
Despite all the above obstacles, there is a clear need for pursuing a
growth strategy as the nations 60% labor force is stuck in a low-
productive farming sector which contributes less than 18% to the GDP of
the country. If the projects are deemed to provide greater economic
benefits to a larger group of the society, then the protests of few should
not stop the government from taking up the project and compensating the
affected generously. So, the government must pursue its growth strategy
of opening manufacturing facilities and pushing much of the labor in
agriculture to the industries. But before all this, it should first fix the above
problems related to land acquisition and reach a satisficing solution. A
price above the fair price must be negotiated with the landowners and it
should take into account the undeclared cash component that is said to
 BERNARD EUGINE F

CASE ANALYSIS - SEZ IN INDIA: PUBLIC PURPOSE AND PRIVATE PROPERTY

form a major part of a transaction involving land. The farmers who had
sold their land during the initial 70% aggregation also must be
compensated equally. The farmers could also be given an option of leasing
their land instead of selling so that they receive a steady income. The
government should also make efforts to settle land ownership disputes
through special purpose speedy-resolution courts and ensure that the
rightful owners are notified about the order. The onus of providing
rehabilitation should lie with the government and it should invest heavily
to train these displaced people so that they could be absorbed in other
businesses. The displaced landowners choice of rehabilitation in terms of
alternate allocation of land, job or financial compensation should be met
by the government after necessary evaluation. Fair rehabilitation should
also be provided to the other dependents of the land as well. This
approach helped the Kerala government to break the deadlock in case of
land acquisition for the Cochin International Airport. In order to carry out
these above-mentioned steps, the government would incur high costs but
the burden should be shared with the firms that would be established in a
phased manner as they start reaping profits.
The influence of middlemen should be obliterated by stricter laws and
monitoring. The government also has the onus of clearly demarcating
what constitutes the acquisition of land for public purpose and just
compensation as it would help it avoid falling into a mire of issues. It
should also enact regulations which would create a transparent market for
farm lands so that the farmers who are willing to sell at market prices
without governments coercion could sell and companies willing to buy
from markets without the governments intervention could buy. The
evasion of stamp duties should also be tackled by announcing sops for
land transactions involving farmers and companies willing to set-up their
manufacturing facilities who are transacting in a free and transparent
market.
The approach of Organizations:
A socially responsible organization like Tata, or be it any organization
should be mindful about whether their activities in terms of acquiring a
land and setting up their bases would affect the livelihood of the masses
or not. The organization should not resort to unethical ways of acquiring
lands through middlemen or a land aggregator by which the landowners
are unfairly compensated.
The firms should also actively involve in improving the livelihood of the
displaced and the communities living around their sites by collaborating
with the government in training them and absorbing some of them into
their workplaces. They should also share the burden of compensation of
the displaced with the government in a phased manner as described
 BERNARD EUGINE F

CASE ANALYSIS - SEZ IN INDIA: PUBLIC PURPOSE AND PRIVATE PROPERTY

earlier. They should help the government in building a holistic

development in fields of education, healthcare, etc.
The acquired lands should be employed as early as possible and hence
the firms should be mandated to get all the clearances related to energy,
environment, etc. before the acquisition. The firms should also not cause
any ecological damage by harmful practices and should rather invest in
creating sustainable business practices that would benefit both the
organization and the society. Hence profits should be viewed in tandem
with societal progress and ecological sustenance.

The role of Civil society/Political movements:

The protests of the civil society and opposition political parties time and
again reiterate the strength of Indias democracy as they exemplify the
freedom of opinion that is accorded by the constitution. This freedom also
has its downside as the protestors could be acting on their self-interests
and not even for the interests of the people that they claim to be fighting
for. Thus, the protestors and dissenters help to keep a reckless
government in check and sometimes also act as impediments in the
governments initiatives for growth.
The civil society and the political parties have been vested with the
responsibility of articulating the needs and problems of the people. They
are supposed to be void of any vested interests and should not only heed
to the interests of powerful sections of the society alone but also fight for
the rights of the downtrodden. In case of the land acquisition saga, these
entities should pressurize the government to provide a price which is
above the fair price so that it would explain the forced selling involved in
this case. They should also push the government to provide the displaced
necessary rehabilitation in terms of land or financial settlement or job
whichever the displaced would like to opt for. They should also oppose any
projects that would cause more harm than benefits to the society if the
government is undertaking them and thus act as a gatekeeper by only
letting in projects that would be for the greater good of the society.
They should also educate the poor about their rights and if in case, a
project offers them a ticket out of their downtrodden lifestyle, these social
entities should make the poor see through the opportunity and help them
make an informed decision which would benefit all the parties involved.
Thus, a dispute as complex as the land acquisition affects the
government, business and society in different ways and magnitude. So,
 BERNARD EUGINE F

CASE ANALYSIS - SEZ IN INDIA: PUBLIC PURPOSE AND PRIVATE PROPERTY

arriving at a solution which would satisfy the needs of all these players
requires a collaborative and inclusive policy making. If land acquisition for
establishing industries could be addressed and also if sound projects are
taken-up, the country would be placed on a fast-growth lane as was in the
case of South Korea, Singapore and Taiwan.