The big difference within the Cabinet over the land acquisition bill revolves around the role of the state. Since land is to be acquired for infrastructure projects - India is relying on the private sector to come up with half the $1 trillion it will need to build ports, highways and power plants in the next five years - positions on either side of the debate are deeply held. Rural development minister Jairam Ramesh, who is piloting the bill, wants adequate safeguards for those who will be dispossessed of their land or livelihoods by industrialisation. His original draft suggested states should only acquire land for public purposes. His opponents argue building infrastructure constitutes public purpose and the state would be remiss in not furthering it by acquiring land, possibly the most vexed issue in large projects.
The compromise arrived at by an empowered group of Cabinet ministers dilutes the bill's initial requirement that four-fifths of those whose land is to be acquired must be in favour of a sale. Now a two-thirds majority will do. On the other hand, government agencies will need to obtain this consent from local bodies in tribal areas if it is aggregating land for projects that have any degree of participation by private players. The deadlock had to be broken because the State is increasingly putting up land as its share of equity in building the country's infrastructure. The other contentious issue, the date from which the law will come into force, now offers the state governments a window to push through projects stalled by unavailability of land. Mr Ramesh has managed to retain social and environment assessments and his point that development cannot be oblivious to these externalities is well taken.
Although the Cabinet has reached a broad agreement on the bill, not all issues have been satisfactorily resolved. States, notably Maharashtra, had argued that asking them to pay rates for land well in excess of those prevailing in the market would crimp their development agenda. By putting a floor to the price at which land can be sold in villages and cities, the bill not only distorts the market, it locks up capital that could be spread wider across our infrastructure deficit. Besides, the bill still requires extensive regulatory supervision to monitor rehabilitation in individual transactions over extended periods to see that the gains are distributed according to the "law". All this assumes the forces that nudged state governments to cut corners within the existing land acquisition law will cease to operate on the panchayats.