Ease of Doing Business: Land Acquisition In Focus

Over the past few years, the government of India has announced a plethora of schemes that support the idea of a self-reliant India. From Production-Linked Incentives to the relaxation of regulations on investment, India’s current policy landscape focuses on steadfast growth of industries critical to global supply chains. The Honourable Prime Minister in his recent state visit to the United States rightfully said that the moment is ripe for investors to look towards India.
With several lucrative industries taking off at the moment- such as semiconductors, sustainable infrastructure, and critical minerals- India is on the cusp of becoming not just self-reliant, but integral to global trade dynamics. Investors- both foreign and domestic- have excellent opportunities within India. In the last published Ease of Doing Business Report by the World Bank, India ranked 63rd out of 190 countries. However, we need to improve on compliances.
When concerns over a developmental project are raised, the law considers several aspects of the situation. However, the larger purpose of the project is often overlooked. This is seen in the form of late-stage quashing of developmental projects over technicalities, especially those involving land acquisition. Courts have terminated projects without the opposition of the majority landowners. Instead of addressing the technical concerns of the minority landowning parties through satisfactory compensation, we end up throwing the baby away with the bathwater.
As the Prime Minister himself has said- through improving our ease of doing business, we are ultimately promoting the ease of living of our countrymen. Many industrial projects are designed to improve economic and social welfare and must be welcomed for the positive impact they can create. However, we see increasingly that the legal process seems to strike down investments with important public purpose.
Projects like the Tata Singur plant were designed to make India a hub of automobile manufacturing but have been discouraged on account of inability to attribute the required weight to the ultimate public purpose while deciding the legality. Despite the willingness of the state governments to invite investment by the flagbearers of Indian industry, land acquisition proceedings are quashed in the name of procedure. A clear alternative to this approach is to consider fair compensation to all parties and public purpose instead of quashing the land acquisition proceedings altogether.
Another example of this is the case of the once-planned Vedanta University. Anil Agarwal Foundation envisioned a world-class educational institute in the State of Odisha to be built on an expanse of infertile, non-irrigated land. The Institute is yet to materialise due to legal proceedings of over fifteen years caused by minor procedural concerns. Nobody can question the purpose of the investment which is in line with the development of the country. Projects like Vedanta University could save the country crores of rupees that Indians spend every year on foreign education.
Many countries have resolved problems associated with land acquisition. Australia, for example, has a system of giving a state guarantee to those who have registered immovable property (i.e., land).
Another issue is speed in resolving land acquisition disputes. On this, India pales in comparison to countries with flourishing developmental investments.
An alternative approach to land acquisition is to create dedicated land banks with pre-approved clearances. This would allow quick and simplified operationalization and increase investor confidence about the results of their initiatives.
We have well-formulated policies that aim to nurture economic growth. Our infrastructure to support investments must also reflect this. India is currently inviting investments from across the world, and we must not discourage such investments by turning away the projects that we already have. Public purpose- such as employment, education and industrial progress- should be prioritized over processes and procedures.

By R.Gopalan