The Centre has circumvented a political deadlock over its land acquisition amendment Bill by asking the States to go ahead and enact their own laws along these lines. With no end in sight to the deadlock in the Rajya Sabha, the Bill could once again have become a pretext for holding up other urgent business in the monsoon session, which begins on July 21. By lobbing the issue to the States — land acquisition is on the concurrent list — the Centre has ensured that at least the eight BJP-ruled States can enact similar laws to expedite the acquisition process. Any new legislation will require the Centre’s consent — a mere formality for these States. For the rest, the UPA law will once again come into force when the ordinance, already re-promulgated thrice, lapses. Attempts to notify the ordinance for the fourth time, as reported in a section of the media, may run into rough political weather. We, therefore, have a situation of “competitive federalism” unfolding, with two models of land acquisition coming into force across the country. Rather than wince at the outcome, it should be regarded as the best possible way forward in an economically and politically diverse country. A feasible land acquisition process would have to be based on the Pareto principle of leaving both industrialists and agriculturists better off. States are likely to arrive at their own versions of this rule in view of their growth compulsions and socio-economic circumstances.
In fact, non-BJP governments could evolve a middle ground between the two laws, which can gradually emerge as the template for the country irrespective of the parties in power at the Centre and in the States. Therefore, industry stands to benefit from competitive federalism in the medium term. It can lead to a nuanced, enduring resolution of politically fraught issues such as ‘consent’ and ‘social impact assessment’. The Centre’s move meets two objectives: it will spur sluggish industrial development and help it shrug off suggestions of being anti-farmer, important for the BJP with the Bihar polls round the corner.
While clearing the roadblocks for industry, it should be kept in mind that India’s land use by industry is inefficient by world standards. An article published in these columns last March (‘An elephant called manufacturing’ by R Krishna Kumar) points out that Japan uses less than 10 per cent of the 22 million hectares of non-agricultural land available in India to produce more than thrice India’s industrial output. The Centre and States should take a serious view of land being held for years without being put to productive use. For manufacturing to take off, land markets must become more even-handed and transparent. This requires changing taxation and property laws that encourage parking black money in land. While the existing roadblocks to land acquisition need to be addressed, these issues are no less crucial.