Q+A – India confronts land grabs in industrialisation push

Reuters | Aug 19, 2010 | 5:53pm IST

The government is trying to strike a balance between farm interests and industry as it faces a series of violent protests against attempts to take over land, a debate that has consequences for investment and internal security.


For many Indians, land is the only asset or social security that they possess and is a mark of social standing. Nearly 60 percent of India’s 1.2 billion citizens depend on farming for a living and each hectare of farmland supports five people. Most projects require huge amounts of land. South Korea’s POSCO’s proposed steel mill in Orissa will be built on 1,600 hectares. A six-lane highway between the Taj Mahal city of Agra with New Delhi will require 43,000 hectares. Compensation ranges from between $4,300 a hectare, in the case of top steelmaker ArcelorMittal’s proposed plant of over 4,400 hectares in Jharkhand, to $14,600 per hectare, offered to farmers displaced by POSCO’s Orissa mill. Despite the seemingly attractive prices, farmers have few other livelihood options and land taken over for industrialisation has been blamed for displacing hundreds of thousands of people. Protests against land being taken over have become more visible as the economy expands and the rich-poor gap widens.


India’s century-old land acquisition law gives the state the right to take over land for public purposes with little compensation. Critics say the government interprets “public” to include private investments and this amounts to land-grabbing. They want private firms to buy the land from the owners at market rates. India is considering a new law which would guarantee market or higher rates.


Analysts cite problems in acquiring land as the biggest hindrance to rapid industrialisation of Asia’s third-largest economy, pointing out to several stalled highways, power utilities and factories. Prominent amongst these are multi-billion dollar investments by top steelmakers like ArcelorMittal, South Korea’s POSCO and Tata Steel. Protests over mining on tribal land in Orissa have stalled plans of British-based mining group Vedanta Resources Plc to extract bauxite.


Proponents say setting up industries and infrastructure will boost economic growth to double-digit rates which are need to pull out of poverty the hundreds of millions of Indians who live on less than $1.25 a day. They say more jobs will be created, shifting people from farms to the higher-paying industrial and service sectors, and that this will deepen the domestic market for goods and services. Opponents point at the land system that has multiple layers of tenancy and where the peasant or farm labourer is often not the owner of the land and hence receives no compensation. They also question the benefits of industrialisation, saying displaced people do not get the jobs that may be created as they do not have the required skills or qualifications.


China faces similar problems over land rights and property seizures, with an increase in the number of clashes between peasants and local government. Some analysts have warned the confrontation could ignite broader popular demands that challenge the Communist Party’s hold over 750 million rural residents.


India’s Maoist rebels have tapped into the resentment of tribal and rural citizens who have been displaced from their land as a result of industrial projects. They have been linked to protests that forced Tata Motors to shift the site of a plant to build the world’s cheapest car. The rebels have also sided with farmers opposing a $3 billion chemicals hub complex and a steel plant planned by India’s No 3 steelmaker JSW Steel, among others. A government panel on Monday said forcible acquisitions could shake the faith of citizens in the rule of law and would have serious consequences for internal security.


India’s food productivity is nearly stagnant and using farm land for other purposes means the country cannot raise farm output rapidly enough. This could leave it vulnerable to food shortages in times of a bad harvest, forcing it to go for costly imports.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s