ISSN -097 1-84 00

NOVEMBER 2013 A DEVELOPMENT MONTHLY ` 10

Land and Natural Resources

A New Beginning on Water in the 12th Plan
Mihir Shah

Reforming India’s Land Policy

Maitreesh Ghatak, Parikshit Ghosh & Dilip Mookherjee

E-government: Potential and Challenges

Yogesh K. Dwivedi, Nripendra P. Rana & Antonis C. Simintiras

National Land Reform Agenda:

The Way Forward for Eradicating Poverty
P.V. Rajagopal
 EMINENT DOMAIN FRAMEWORK
ANALYSIS

Reforming India’s Land Policy

Maitreesh Ghatak
Parikshit Ghosh
Dilip Mookherjee
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...the most significant
failure of many current
policy initiatives on land
is the inability to combine
idealism with pragmatism,
to balance distributive
concerns and aggregate
goals like industrialization
or conservation of forest
cover. Distributing our land
endowments more equally is
important for social justice,
but this has no real conflict
with allowing land markets
to function smoothly and
promoting the best use of
land
A
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The Land Acquisition Act
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brings about three significant changes.
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...compensation at market price is a
deeply flawed principle. The market
price of land should not be confused
with its value to the owner. The
latter derives from many factors
including crop output, employment
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as collateral, protection against
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irrelevant if it is difficult to actually buy
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A recent survey of households
whose lands were acquired in
Singur provides evidence of the
heterogeneity of land valuations to
owners and the important role this
played in opposition to the land
acquisition (Ghatak et al 2012).
The compensation offered by the
West Bengal government was on
average equal to the market values
reported by the owners. Yet one
third of these owners refused the
compensation and opposed the land
acquisition.
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The fixed mark-up introduced in the
new law (with only a rural-urban
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to serve its purpose all over the
country.The problem is that getting
this ratio correct is crucial. If it is
set too high, the cost of acquiring
land will become prohibitively
large and industrialisation will
slow down too much. It may also
compromise farmers’ interests by
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it is set too low, the problems seen
in Singur will re-emerge.
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justified eminent domain along these
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As a first step towards acquiring
land for any project, the
government should buy land
in the general neighbourhood
through an auction, procuring an
aggregate area roughly equal to
the size of the project site. Next,
owners of unsold plots that lie
within the intended project site
can be compensated with land-
for-land awards, that is, by giving
them cultivable land of equal area
outside the location.
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sector, another factor is the difficulty of
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markets – poor land records
that make it difficult to officially
transfer ownership, the presence
of tenancy and land ceiling laws
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The Singur experience showed that
a key problem underlying resistance
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They greatly impede efficient land use and also take away an
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Review of Economic Policy  SS 
(E-mail :M.Ghatak@lse.ac.uk
pghosh@econdse.org
dilipm@bu.edu)
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