FICCI feels NAC proposal to ban industry from buying land will lead to political bias

The industry, through the Federation of Chambers of Indian Commerce & Industry, has opposed the move to prevent private companies from buying large tracts of land for project needs.

The FICCI said any such move to make the industry totally dependent on the government will create room for political interference and favoritism in how projects are allowed or set up by private companies.

” FICCI feels that the proposal would be counterproductive at this stage of development in the country and would further provide room for bias in acquiring land. It would also result in sub-optimal allocation of land resources in the country,” it pointed out.

“It is important that we have a transparent, efficient and market based system of land acquisition for the industry which will enable faster implementation of manufacturing and infrastructure projects,” it said, adding that the rules “should not make the process of acquisition cumbersome and uncertain for the industry.”

The National Advisory Committee, a ‘conscience cabinet’ set up by Congress party to ‘guide’ the government, had suggested last week that private companies should not be allowed to buy directly from land owners if more than 400 families are to be displaced.

The suggestion came in the wake of large protests over acquisition of land. Ironically, most of the big protests are over acquisition by government — whether in Orissa over POSCO, Jaitapur or in Raigarh over Special Economic Zones.

FICCI said it is not in favor of NAC’s suggestion which would require the government to step in to buy land every time in large industry is to be set up. Government acquisition usually involves coercion. FICCI felt acquisition should be done by paying the market price.

“FICCI suggested that industry should be allowed to function in the market based system for acquisition of land and pay the market determined price to land holders which would enable land owners to sell the land voluntarily. This will prevent any forced displacement also,” it said.

On the contrary, FICCI said that it is in favor of the current provision in the bill being tabled in Parliament — forcing the industry to buy 70% of the required land.

To avoid conflict, the Government can consider adopting the Haryana model of compensation which provides for payment of annuity in the form of royalty for a period of 33 years for the land owners whose land is acquired, it suggested.

The NAC is comprised of activists and social workers and is often called a ‘Super Cabinet’ since it is headed by Congress president Sonia Gandhi and routinely weighs in on the big issues before the country. It had recently recommended extending the food rationing system to 75% of the country’s population, a proposal which created alarm in finance and food ministries of the government.