India landgrabs meet massive resistance

Updated September 9, 2010 21:13:51

At a time when the rest of the world is still feeling the global financial pinch, India, like China, has been posting quite remarkable growth figures - but New Delhi is beginning to feel the pain of trying to balance economic development against the social demands of its people.

Presenter: Kanaha Sabapathy
Speakers: Professor Bibek Debroy, Centre for Policy Research, New Delhi; Professor N.R. Bhanumurthy, National Institute of Public Finance and Policy, New Delhi

SABAPATHY: Acquisition of agricultural and forest lands for road, commercial and rural development and mining is becoming a sensitive issue in India.

Last month, thousands of protesting farmers opposed to the building of the Yamuna Expressway, linking the capital New Delhi to Agra, brought the project to a standstill after the lynching of a police officer and the burning US$12 million worth of construction equipment.

Their complaint was two fold, with some saying they were forced to sell against their will and that the payment they received was too low.

With 90 per cent of agricultural landowners owning plots less than 2 hectares in size, productivity is low.

Professor Bibek Debroy from the Centre for Policy Research in New Delhi says it's not wrong to get people out of subsistence farming.

DEBROY: The present landowning system, the present usage of land is inefficient and we should get people out of land, we should get people out of agriculture. So, therefore, one is going to have to have alternative occupations for people. Now, most of the problems that arise I think are problems that are identified as problems connected with land, but they are problems connected with skill. Now, yes, there are issues connected with kinds of compensation that are offered. Yes, there are issues connected with the acquisition process. Yes, there are issues connected with rehabilitation, but the fundamental issue to my mind is one of lack of skills.

SABAPATHY: Currently, the Indian federal government is working to amend the 1894 Land Acquisition Act.

But as professor N.R. Bhanumurthy from the National Institute of Public Finance and Policy says, the government has a difficult job ahead.

BHANUMURTHY: Right now, the overall development policy of the country is at crossroads. Largely, it needs to balance the overall growth process and the overall social and economic development process.

SABAPATHY: To the east, in the state of Orissa, the federal government has been forced to put a stop to the British company, Vedanta Resources Plc., from mining bauxite.

And the South Korean company, Posco, has failed over the past five years to build a US$12 billion steel plant because of opposition to land acquisition from tribal groups living in local forested areas.

Like the poor farmers of the north, the tribal people lack literacy, skills, employment and decent incomes, and should they lose their lands they would be in a dire position.

But can India afford to sideline big Multi National Companies at a time when it is in competition with China to be an economic powerhouse? Professor Bhanumurthy.

BHANUMURTHY: Big private companies may take a second look at their projects. But I guess we are in a democratic process and we cannot compare really with China and we need to keep the overall democratic institutions intact and see that [...] the issues are settled amicably among all parties. I don't think there are any short cuts for that, but I feel once you come out of this issue it will be very much more sustainable for the longer term development process.

SABAPATHY: Professor Bibek Debroy says, sensitive as it may be, panchayats, or local councils, must be given the right to decide if they want to release land for development.

He is confident that if the entire planning process for development is reversed to go from the bottom up, India will still progress.

DEBROY: Because competitive pressures would ensure that, because once the panchayat in Orissa says 'Hey, look I don't want the development to happen' and the investments then go to Andra Pradesh, they will change their ways - just like the states have been doing it.