NOTES
Political Economy of Land
and Development in India
Dhanmanjiri Sathe
Land has emerged as one
of the bigger constraints on
development in recent years.
Particularly contentious is access
to “appropriate land”, which the
non-agricultural sector requires
for its expansion, and which is
scarce because the State is not
creating conditions conducive for
farmers to sell their land. This
article discusses the different
phases in land acquisition since
Independence, issues of adequate
compensation, and the space
this has created for different
kinds of activism by members of
civil society.
Dhanmanjiri Sathe (dsathe@unipune.ac.in)
teaches at the Department of Economics,
University of Pune.
Economic & Political Weekly  EPW   july 16, 2011  vol xlvi no 29
D
evelopment economics has expe-
rienced many highs and lows;
however, all along it has basically
focused on removing the constraints on the
process of development. One can observ­e
three strands in development economics
which have tried to address this issue in
different ways. The first is the strand of
“high development theory” starting from
the mid-1940s and going on till the late
1950s. Some of the themes that were dealt
with were vicious circle, balanced vs un-
balanced growth, backward-forward link-
ages, big push, unlimited supply of labour,
savings and foreign exchange gap, etc.
The work done under this strand was
highly insightful, but methodo­logically
non-rigorous in nature as it did not depend
on formal models. The second strand,
spanning the same time period, consisted
of the Harrod-Domar models and the
neoclassical response (the Solow model).
These models were metho­dologically very
tight and they developed an explicit rela-
tionship between capital and the rate of
growth of an economy­. This received wisdom
was then followed by the third strand with
the evolution of the endogenous theories
of growth in the 1980s, where the focus
shifted to i­ncreasing returns which arose
out of h­uman capital, i e, role of education
and health. Under this, the quality of the
population, in terms of their skills, become
central to the process of development.
The three underpinnings of this devel-
opment discourse are:
(1) Capital is scarce because of the low
savings rate in a developing economy and
it can be augmented only up to a certain
exten­t by taking the route of foreign aid
and/or by keeping exports higher than
imports­. From the proposition of scarcity
of capital, it followed that capital should
be used in a judicious manner, i e, in a
manner that maxi­mises the rate of growth
of the economy.
(2) There is an unlimited supply of l­abour
and the surplus labour can be shifted from
agriculture to the industrial sector, without
any fall in the agricultural output, and with-
out any rise in the agricultural wage rate.
(3) In general, land has not received as
much attention in development literature
as have labour and capital. Land was usu-
ally discussed in the context of agri­
cultural land and it was stated that as
development occurs, population would rise
and there would be a decline in the arable
land-­population ratio, which could pose
problems (Lewis model). In the classical
literature, it was believed that economic
growth would continue till natural resources
became a constraint and once that happened
the economy would reach a “stationary
state”. However, almost no attention has
been given to the land required for non-
agricultural purposes. In this article, we
focus on the political economy of land
r­equired by the non-agricultural sector for
its expansion in the Indian economy.
1  Rising Importance of
Non-Agricultural Land
The last couple of decades have seen some
salient changes in the defining features
of developing economies. The first change
is that in a large number of developing
economies, capital is now no longer as scarce
as it used to be, as savings rates have
become among the highest in the world.
A­nother contributing factor has been the
considerable loosening of the foreign ex-
change constraint, which has made more
capital available. This has been possible due
to many developing economies having a
current account surplus. Additionally, there
has been a loosening of capital controls
so that international finance is flowing
into the developing economies in the form
of foreign direct investment (FDI) and
portfolio investment, again making more
capital available.
Second, most developing economies are
facing a constraint in the form of lack of
skilled labour. Though in the “high develop-
ment theory” sense, many developing econo-
mies especially the Asian ones still have sur-
plus labour, it is now recognised that this
may not be enough for the development
process to continue unabated. The question
151
NOTES
haunting these economies is: how can the
skilled labour constraint be overcome?
The third important change that has
o­ccurred, especially in the Asian economies
(like India and China which have high pop-
ulation densities) is that land has become
very scarce. By land, we specifically mean
the land required by the non-agricultural
sector (the industrial and the service sec-
tors including the government sector) for
its expansion. We call such land “appropri-
ate land”. This needs to meet several
demand­s of the non-agricultural sector, and
thus cannot be substituted by any othe­r
land. Such land can be of three kinds. The
first is what we can call the “metro-­adjacent
land”, which is adjacent to the existing
urban centres, i e, land on the periphery
of metropolitan cities, medium-level cities
and even smaller towns. Some of the fea-
tures of this land are (1) it is physically
contiguous to the urban centres, (2) the
­infrastructure in these areas is somewhat
better than in the relatively far-off areas,
not to talk of the far-flung areas, and
(3) manpower residing in these areas is
somewhat better versed with the urban
lifestyle and working ways. That is, though
most of them in these areas are dependent
on agriculture, others regularly go to the
urban centres either to work, or for medical
services, governmental work and persona­l
jobs. Thus the labour that is available in
this “metro-adjacent land” is exposed to the
process of urbanisation and in fact, wants
to partake in the benefits of urbanisation.
The non-agricultural sector wants this
land for its expansion because it has better
existing infrastructure (as compared to the
remote areas), possibility of improving this
infrastructure relatively faster, and better
quality of labour. Further, to attract a com-
petent managerial class, who would prefer
to stay in big cities, it becomes neces­sary
that the factory is located in the outskirts of
such cities. There is a whole body of litera-
ture on the importance of “geography” in
the process of development. The centre-
periphery theories show us how develop-
ment occurs in already d­eveloped areas;
and the vicious-virtuous circle theory also
presents some insights in this field. There-
fore, in such cases, there is hardly any
choice with respect to the land that is re-
quired, and as experience has shown, in
spite of many incentives given by the state,
152
the non-agricultural sector is quite reluc-
tant to move to the backward areas.
The second type of land is what we
call “infrastructural land”, which the non-­
agricultural sector requires for building high-
ways, roads, dams and electricity pro­jects.
Here perhaps there is some choice with re-
spect to the agricultural land that is required.
For example, one can plan in such a way that
in building a dam, “xyz” villages will be sub-
merged in water but not “abc”. But this
choice is not much. Third, the non-agricul-
tural sector requires land from agriculture
for mining purposes. Mines have to be loca­
ted in area­s where the natural deposits are
found and there cannot be much negotiation
with ­respect to where they are positioned.
In all these three cases the location of
land is extremely important. Thus, though
India has a huge amount of land, the land
required by the non-agricultural sector for
its development process is fairly specific,
and hence limited. Consequently, we are
now in a situation where the land market
has got segmented into agricultural land,
non-agricultural land (i e, land where fac-
tories, IT offices, cities, towns, etc, exist)
and appropriate land(i e, land that the agri-
cultural sector possesses but which the
non-agricultural sector wants for its devel-
opment). Thus at a point in time, appropri-
ate land belongs to the agricultural sector,
but is liable to shift to non-agricultural land.
Much of the appropriate land belongs to
the farmers or to the tribals (henceforth we
will call them farmers) who have inherited
it. Land is one of the most important assets
and sometimes the only asset that they
have. They derive their livelihood, identity
and their sense of security from land. Fur-
ther, with an increase in population, and
lack of other employment avenues, the
stress on land has increased in India. This
brings us to a situation wherein the non-
agricultural sector wants this appropriate
land and the farmers are unwilling to part
with it (due to various reasons discussed
below), leading to some of the most violent
disputes the country has seen (and the
same is true about C­hina where riots due
to land disputes are very frequent).
2  The Role of the State
Theoretically speaking, an increase in
the need for appropriate land by the
­non-­agricultural sector should lead to an
july 16, 2011  vol xlvi no 29  EPW   Economic & Political Weekly
increase in the price of this land. How­
ever, in the real world the problem lies in
the domain of political economy. The
problem unfolds itself within the broad
parameters of the interests of the state;
the political power of each of the econom-
ic agents, the farmers and the capitalists,
their ability to manipulate the state; the
institutional framework and how it chang-
es; and finally the vision of development
held by the elite in the country.
It is our argument that access to appro-
priate land is a contested issue, and it is
scarce in supply precisely because the State
is not creating conditions which are condu-
cive for the farmers to sell their land.
Looking at the other factor inputs, we
find that the labour market in India is seg-
mented in two ways – the skilled and the
unskilled; and the organised and the un­
organised. While the skilled labour is largely
organised labour, the latter does consist of
unskilled labour too. Generally, the returns
to skilled and organised labour are higher
than those of their unskilled and unorgan-
ised counterparts. The capital market is
also segmented into organised and unor-
ganised segments. The interest rate is low-
er in the organised sector mainly due to
governmental intervention.
In the context of the appropriate land, as
far as the legal framework is concerned,
there has been no discernible change since
Independence. The Land Acquisition Act
(1894) was amended in 1984 but the farm-
land can be and has been acquired without
adequate compensation to the farmers
(Gonsalves 2010). However, there has un-
doubtedly been a change in the ­milieu,
though one cannot think of a particular
year or an event with which to associate
the shift. Nevertheless, since the change in
the milieu is in some ways related to the
heightened economic activity, we can think
of two phases. The first is the “traditional
phase” starting from the First Plan till the
opening up of the economy in 1991. The
second is the “civil society phase” which was
characterised by increased activism and
cons­ciousness about the importance of land.
In the post-Independence period, the
first wave of the need for appropriate
land came with the commencement of
the planning process. The development
projects, mostly in the public sector, were
commissioned, and the requirement for

appropriate land arose in a big way. In this
“traditional phase” the pressure on the
land was low (in any case compared to the
next phase); there was little activism on
the part of the farmers, with hardly any
non-governmental organisations (NGOs)/
civil society supporting them; and, as
mentioned before, the legal framework
was quite conducive for the taking over of
appropriate land. Both the public and the
private sector acquired land in plenty.
Thus, land was acquired for building the
Bhakra-Nangal dam, the Bokaro plant, the
Telco and Tisco factories, Bajaj scooters,
etc. It is now well known that people were
evacuated from all such areas and hardly
any compensation was paid to them. What
was, de facto, demanded was a sacrifice
from the displaced for the larger good.
Whatever agitations took place were
extremely local in nature and were ruth-
lessly crushed.
In the second phase, i e, the civil society
phase, though the legal framework re-
mained the same, the following changes
occurred. First, the pressure on agricultur-
al land is much more as landholdings have
become smaller. Second, the mobilisation
of the farmers is much greater. Farmers
who stand to lose their land are much
more vociferous, organised, aware of their
rights and willing to take up the fight. In
this, they have been assisted by the NGOs,
civil society organisations, the media and
the opposition parties. On the other hand,
in the “real economy” sense, higher rates of
economic growth since 1991 and the ex-
pectations of higher rates have led to a
steep rise in the demand for appropriate
land. Thus, with an increase in demand,
farmers’ consciousness has also increased.
Consequently, the taking over of appropri-
ate land has become one of the most con-
tentious issues facing the economy now. If
in the first phase it was easy to displace the
farmers, in this second phase land acquisi-
tion has become an acrimonious issue with
a range of outcomes possible – sometimes
easy, other times quite difficult, and at
times, as the examples of Nandigram and
Singur show, quite impossible to acquire
the land. The farmers have become more
aware of their economic power and are
willing to bargain/agitate for better re-
turns to their land. The question they are
asking is: Why should a certain section of
Economic & Political Weekly  EPW   july 16, 2011  vol xlvi no 29
the population suffer so that others bene-
fit? Besides the important ethical question
involved in such a sacrifice, in realistic terms
the “golden future” may never emerge.
As compared to the traditional phase,
some improvement seems to have occu­
rred with respect to the compensation/
price paid to the farmers. It seems that
some effort is being made to look into
what the farmers want, but is it adequate?
3  Concerns of the Farmers
The widespread agitations by the farmers
across the country reveal their dissatisfac-
tion with the package being offered to
them. But does that mean that the farmers
are not willing to sell the land at all, ever in
the future? Or does it mean that they will
be willing to sell it at the right price? How
will this right price be arrived at? What
should this right price consist of? Are agita-
tions one way of increasing the right price?
Like any other economic agent, the farm-
ers too would be within their rights to ne-
gotiate and get the best possible price/
compensation. The apparent unwilling-
ness of the farmers to part with their land
needs to be understood in the context of
the revelation that 40% of the farmers in
any case do not want to e­ngage in farming.
All in all, the farmers need to be adequately
compensated befor­e they give up their
land in a peaceful manner. To understand
what this satisfactory compensation would
be we need to understand the relationship
of the farmer with his land.
While an emotional bonding between
the farmer and the land does exist, one
should be wary of overdoing it. As we will
discuss a little later, land means certain
things to the farmers. Before that, some in-
sights from Chayanov (Thorner et al 1966)
arrived at under different conditions may
be extremely useful. Paraphrasing him, we
could say that the farmers’ family looks at
their own viability in the short run and in
the long run. Thus, they are primarily fo-
cused on their survival and the survival of
their future generations. The farmers in
­India, even those growing commercial
crops, are not capitalist farmers in any
sense of the term. They are basically work-
ing within the framework of viability of
current and f­uture generations.
Land is a source of employment and live-
lihood to the farmer. In reality, in most
NOTES
c­ ases, the land does not give him a very
high quality of life, but it helps him to eke
out a living and be somewhat “food assu­
red”. This is the income function of land.
Further, land is also “something” he can
fall back on, even though it may not be
anything much. This is the insurance
function of land. Ownership of land does
not make him “jobless”, the way a person
can be jobless in the urban areas in the
­industrial system (under the dominant
capitalist system). Not only is he not “job-
less”, but he also has some assured capital.
Thus, shifting from his land means shift-
ing to an entirely new kind of existence,
with new kinds of uncertainties and risks.
We observe two kinds of reactions to the
loss of land. Farmers from the more devel-
oped states of Haryana, Gujarat and
Maha­rashtra are found to be more willing
to sell their land, while asking for substan-
tial compensation and ready to agitate to
get what they think is their due. This is a
consequence of their better integration
with the economic system and their
­increased/increasing bargaining power.
On the other hand, in backward areas
such as Orissa, farmers have been found to
be more reluctant to give up their land (as
they suffer from “aspiration deficit”); but it
has been easier to bulldoze them into giv-
ing up their land at much lower compensa-
tion packages given their weaker mobilisa-
tion. Second, the manner in which farmers
n­egotiate to get a better package is also
different in the developed and the back-
ward areas. In the former, farmers are agi-
tating in a relatively less violent manner
(though the recent agitations in Bhatta
and Parsaul villages in Greater Noida
showed increased violence) and even
while agitating they will nevertheless stay
within the system and look for a solution
within the available systemic ­parameters.
In the backward areas, farmers resort to
more violent outbursts and instead of stay-
ing within the framework they hope for a
revolutionary solution to their problems.
Up till now, such outbursts were less se-
vere and the state could successfully crush
them. Only in recent periods (as the Mao-
ist movements show) have they become a
real threat to the establishment. However,
it can be expected that as “progress” oc-
curs, the farmers from backward areas
would also be willing to negotiate.
153
NOTES
4  Adequate Compensation
At one level, no compensation can be ade-
quate, as displacement means the loss of a
particular way of living. But people do
change their lifestyle, especially if it is for
the better. In this case, the farmers are ex-
pected to shift from low income cer­tainty
to low/high income uncertainty. We are
calling it “high income” because in the last
few years, a seemingly substantial finan-
cial amount is being offered to the farmers,
running into lakhs and sometimes into
crores of rupees (for example, in Haryana
and Punjab). However, in most cases the
amount offered is low. There is also a prob-
lem at the farmers’ end. Studies have
found that when they receive the money,
farmers spend it on building a house,
daughter’s wedding,1 etc. Without deriding
the importance of these claims on the
finan­cial resources suddenly gotten, it is
clear that such behaviour does not result in
any future income streams. It is here that
the NGOs can play a pivotal role. Most
NGOs are opposed to any conversion of
the appropriate land into ­non-agricultural
land. But as discussed ­below, such a newly
unfolding scenario calls for and creates the
space for other kinds of activism.
In any case, the question of a compensa-
tion package (i e, a lump sum amount for
land, annuity, ownership in the developed
land, jobs, etc) becomes crucial and we need
to examine it in some detail. As a first step, if
one were to look at the ­eminent domain
principle applicable in the United States
(US), it states that fair ­compensation has oc-
curred when “the property owner is put in as
good a position pecuniarily [sic] as if his/her
property had not been taken”. The property’s
highest and best use is to be considered for
c­ompensation. However, the conditions in
the US (or any other developed economy)
and India are not quite the same, beginning
with the huge demand for “appropriate” land
in India. Hence the compensation package in
India should go much ­beyond putting the
owner in “as good a ­position”, and to pay
him the equivalent of what he is getting
from farming would be quite unjust, as this
would be a small amount.
Even a cursory look at the system of
compensation in India shows that it is
extre­mely faulty and in need of a complete
overhaul. The compensation package should
increase the farmers’ income and ­insurance
154
both. The first step would be, of course, to
change the law (i e, the passing of the
Land Acquisition (Amendment) Bill of
2007). But that alone will not be enough.
To bring together the farmers and the
buyers of their land (let us call them the
investors, which would include the public
and the private sector investors), new in-
stitutions need to develop.
New kinds of NGOs/civil society groups,
who believe that conver­ting appropriate
land into non-agricultural land, if done in a
proper manner, can help the farmers come
out of their subsistence existence, can play
an essential role here. Given the variety of
conditions in the ownership ­patterns of
land, this is a monumental task. Such NGOs
(which could consist of non-farmers and
the farmers themselves) will have to take
up the case of each farmer, assess how he is
affected by the loss of land, to what use his
land is going to be put, how he needs to be
compensated and then accordingly negoti-
ate it with the ­investors. (Ironically, one is
reminded of the CPM cadre which under-
took a similar task in the 1970s when land
reforms were implemented in West Bengal.
In each and every village, land records –
both oral and written – had to be looked
into, and a decision taken on who should
become the new owner of the land. How-
ever, after 30 years, the same cadre failed
woefully when the issue of Singur and
Nandigram came up.) This would be much
like the trade unions negotiating on behalf
of the workers, along with the concomitant
agency problem. Further, the farmers will
also have to be counselled with respect to
using the money they receive as compensa-
tion, so that they do not spend it on
u­nproductive purposes (some socially pro-
gressive steps could also be taken like mak-
ing the wife the joint owner of the new as-
sets, bank account, etc).
Types of Compensation
As of now, the compensation paid to the
farmer is dependent on many factors and
there is a certain amount of vagueness
­associated with it. States across the coun-
try have developed different modes
through which land can be acquired. For
example, there can be the special econom-
ic zone (SEZ) mode; the government ac-
quiring the land and handing it over to the
private d­eveloper; a partnership (a joint
july 16, 2011  vol xlvi no 29  EPW   Economic & Political Weekly
venture) between the government and the
private industry, etc. Further, based on
the recent transaction in the area, the gov-
ernment ­offers the price. But a high stamp
duty may result in the true value of the
land being understated. Broadly speaking,
the attri­butes of land which are consid-
ered in fixing the price are (1) fertility, (2)
proximity of the land to developed/urban
areas or its l­ocation, (3) the use to which
the land is going to be put and the profita-
bility of that industry, and (4) the nature
of the buyer. Under the current law, the
Supreme Court has upheld the right of the
government to acquire land for public pur-
poses, (Mehta 2010) and lower amounts
can be paid for such land. However, fair-
ness demands that the compensation to
the farmers should be the same irrespec-
tive of whether the buyer is public or a pri-
vate sector entity.
Even then, ultimately, what the farmers
can be given would most likely be dependent
on what is going to come up on the ­acquired
land, the profitability of the ­industries/
mines on that land, and the accessibility of
the land to urban centres. All acquired land
may not be equally profitable; there would
be differences between two private acqui-
sitions also. Thus, though fairness de-
mands that all land-losers be paid an equal
compensation, it may not happen in the
real world. A parallel can be drawn to oth-
er sectors, e g, the payment to a security
guard in an IT company, a chemical factory
and in a textile factory is quite disparate;
though the work done is quite similar.
Further, other complex issues might
arise; for instance, the package may con-
sist of giving a job to one person from the
displaced family. If this family had not
been displaced, all the sons would have
got equal share in the land and would
have had some source of livelihood. If only
one son gets the job, what happens to the
others? This son who has now shifted into
the non-agricultural sector, which puts its
own demands on him, may not be able to
look after all his siblings.
The government on its part is trying to
come up with some new ideas. On 17 Sep-
tember 2010, the Group of Ministers
­approved the new Mining Bill, which has a
provision for sharing 26% of profits with
the displaced in addition to providing em-
ployment. Such proposals for mining (and

also possibly for non-mining activities)
would have to be looked into carefully. Not
surprisingly, this step has not gone down
well with the mining industry for its own
reasons. But even from the point of view of
the displaced, would this mean sharing of
losses when they occur? As of now the bill
states that if a mine is non-functional or
generating losses, the firm should compen-
sate the affected people with an amount
equal to the royalty given to the state gov-
ernment. But this would bring in more
­uncertainty into the package. What hap-
pens if there is non-compliance on the part
of the company in the future? It would be
almost possible for the earlier-displaced to
run to the court then. It may be better if an
inflation-indexed annuity for say 33 or 50
years is paid to the affected. These are the
kinds of issues that future compensation
packages will have to work out.
At this stage one could look at some of
the success stories in land acquisition.
There are some cases where the farmers
seem to have been given a fair deal, e g, the
now famous model developed in Haryana
by the Chief Minister B S Hooda wherein
the farmers are paid a compensation for
land, given residential plots and annuity
for 33 years. Phase I of the Bharat Forge-
MIDC SEZ in Pune is taken to be a success,
as the farmers were paid a lump sum
amount, employment was offered to one
person from every project-affected family,
there was a buyback option of up to 15% of
the developed land at a particular rate,
and every landless labourer was paid Rs 65
for 600 days. However, both the Hooda
model and the SEZ are facing problems
now as the farmers in this area want higher
compensation in Phase II. The same is true
of the Greater Noida Phase II (the Yamuna
Expressway), where the farmers reneged
on the earlier contract and demanded
more. It seems that as a project gets into
the Phase II, the farmers start asking for
more. This makes us ask the question: Can
the farmers be unreasonable?2
5  Is There a Resolution?
There is a critical problem at the other end
of the spectrum too. Many investors have
used their political power to get land free or
at a negligible price (e g, land acquired by
Reliance Energy Generation in the Hapur
subdivision of Ghaziabad) (Pai 2010). An
Economic & Political Weekly  EPW   july 16, 2011  vol xlvi no 29
element of speculation has also entered the
whole business. Consequently, this has be-
come a breeding ground for the land mafia
and speculators who are often supported
by the political classes themselves. This
implies a steep increase in the costs of the
genuine investors. Not surprisingly, they
would rather collude with the politician
and avoid paying the amount. The delay in
passing the Land Acquisition (Amendment)
Bill 2007 could be attri­buted to this factor.
Further, almost all ­political parties have
been opportunistic in facing this challenge.
Their response has been to oppose acqui-
sitions when in opposition and to support
it when in power. One can even interpret it
as “consensus-of-a-hidden-kind” (remind-
ing one of “globalisation by stealth”).
Political parties have the capacity and the
responsibility to educate the public and
help in developing a consensus on the is-
sue, but they seem to have avoided both.
Thus while NGOs have become a major op-
posing force in line with their ideology,
the political parties seem to be avoiding
taking a clear position. It is also interest-
ing to see that in some cases, politicians
have almost threatened the agitating
farmers with declaring those areas which
the farmers do not want to give up as
“green belts”, thereby foreclosing any
opportunity for the farmers to sell their
land for non-agricultural purposes in the
future (announcements made by Sharad
Pawar and B S Hooda at different times)!
On the other hand, the farmers may
themselves come up with solutions to the
problem of land acquisition. For example,
farmers in the village Avasari Khurd (close
to Nashik) came up with some “out of the
box” solutions (Sathe 2007). In this case,
around 1,500 farmers from this village de-
cided to form a company which would
float a SEZ, so that the benefits accrue to
the farmers and not to the developer. Each
family was expected to contribute Rs one
lakh, making them shareholders in the
company and a loan was to be raised against
the land itself. They planned to set up the
SEZ on half the land, and retain the other
half in the village for agriculture. It is im-
portant to note that they admitted being
uncomfortable with the idea of giving up
all their land for the SEZ. They were happy
to continue with some amount of farming
and this gave them a sense of security. It is
NOTES
also interesting to note that they thought
of forming a “company” and not a “coop-
erative” – a movement that has been his-
torically strong in this part of India.
The issue before the state and the inves-
tors is to acquire land in a peaceful manner
so that the process of capital accumulation
and growth continues. The land factor has
the potential to not just disrupt the eco-
nomic story but also the political story of
India. In the case of organised labour, peace
has been bought by giving high wages and
perks. The unorganised sector, on the other
hand, has been left to fend for itself and by
definition it is difficult for them to get into a
protesting mode. Would the state support
the farmers and go against the investors?
The problem is confounded as the state
­itself is an investor in very many cases.
The passing of the Land Acquisition
(Amendment) Bill 2007 is only a first step
towards resolution, as the actual compen-
sation package would have to be worked out
through negotiations between the farmers
and the investors. The devil lies in the
details. This opens the door to parleys
which can be quite murky and exploitative
of the farmers, as the investors will continue
to have the economic and political upper
hand. While the negotiating capacities and
posturing by the farmers is also on the rise,
one can expect that the implementation of
the Act, when passed, will vary across
India. The pressure of the “developmental
juggernaut” is immense. In crude terms, if
the investor can afford to give a fair pack-
age, it is good for the farmer; if not, the
land will be grabbed in any case.
Notes
1 Author’s fieldwork in Hingewadi Phase II, close to
Pune; along with other reports.
2 On the other hand, very high demands by the
farmers may have unintended consequences and
it may achieve what government policy could not.
That is, wherever possible, the investor may try to
shift to backward areas where the compensation
that she has to pay is more ­affordable.
References
Gonsalves, Colin (2010): “Judicial Failure on Land
Acquisition for Corporations”, Economic & Political
Weekly, 7-13 August, Vol XLV, No 32: 37-42.
Mehta, Pratap Bhanu (2010): “It’s Land, Stupid”, The
Indian Express, 19 August.
Pai, Sudha (2010): “Landing a Better Deal”, The Indian
Express, 28 August.
Sathe, D (2007): “When Farmers Form a Company”,
The Economic Times, 17 October.
Thorner, D, B Kerblay and R E F Smith, ed. (1966):
A V Chayanov on the Theory of Peasant Economy
(Illinois: The American Economic Association).
155