India’s arable land – its greatest asset – is under threat

arable land india

Fertile land feeds the farmer, farmworker, locals and those further afield – concrete does not. See Agriculture in India. Prime Minister Narendra Modi is – mistakenly – trying to accelerate India’s transformation from a predominately rural, agrarian society to an industrialised, urbanised economy with smart cities and industrial corridors.

At Independence in 1947, India inherited the 1894 Land Acquisition Act, which allowed the state to take private land for “public purposes” if owners were fairly compensated. Mr Modi hopes to revise India’s land acquisition rules to speed up development.

A typical case: Uttar Pradesh authorities took 589 hectares of land from Patwari for new factories. Officials paid Rs850 per square yard for the land 42km from central Delhi and promised jobs would soon follow: “They said ‘give us your land for industrial purposes and your family — your children — will get jobs. We thought our lives would take a different turn”.

farmers land

However, as Amy Kazmin in the Financial Times reports, instead of the promised factories, apartment blocks rose on the fields. The farmers’ land had been sold to private developers to build housing for New Delhi’s expanding middle class. The builders paid Rs10,000 per square metre for the land — more than 14 times what the farmers received.

The Patwari farmers went to court to challenge the 2008 acquisition, arguing that authorities had abused their powers in order to benefit private businesses and in May, India’s Supreme Court agreed. It ruled that the state’s acquisition of the fields was illegal. Judges criticised the government’s invocation of an emergency clause in the land acquisition act that had prevented the farmers from contesting the seizure beforehand but said the property could not be returned, as thousands of families had already paid for flats in the partially completed buildings. Instead, the court ordered a 64% increase in compensation payments.

There have been long battles in court and when judgments were finally issued, courts often ordered significant rises in compensation.


In 2013, the Congress-led government had passed a law requiring:

  •  authorities to obtain the consent of 70 to 80% of “project affected families”, both property owners and those, such as farmhands, losing their livelihood, before taking any land;
  • social impact assessments evaluating the costs and benefits of diverting land from agriculture to the designated project;
  • the raising of compensation rates to four times the market price for rural land, twice the market price for urban land;
  • generous resettlement and rehabilitation packages for the displaced and
  • obligations on companies trying to buy large tracts of land through the market, requiring them to resettle anyone affected — not just landowners but also their workers — by the purchase.

Thoughtful comments and questions

j aziz jp morganCompanies warned that the law would have a crippling affect and make it virtually impossible for the state to acquire land. Mr Modi is now trying to amend the two-year-old law so authorities can again take land without farmers’ consent or social impact evaluations — though the enhanced compensation will remain.

Jahangir Aziz, chief Asia economist at JP Morgan [left] wisely comments: “The government did not expect the intensity with which this was opposed — not just in parliament but outside parliament. For most non-urban people, the most well-understood, widely accepted fear of living is that the outsider will come and ‘take away my land’. These proposals feed into that traditional fear.”

m levienMichael Levien, a Johns Hopkins University sociologist asks questions which go right to the heart of the matter:

“What public purpose justifies a democratic government forcibly taking land from farmers?

  • Is it a factory?
  • Is it real-estate development?
  • Is it a Formula One race track?”

To paraphrase: The question is: what is the meaning of development? Who gets the benefit and who pays the cost?


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