Stung by the chorus of criticism against arbitrary allocation of natural resources, the government is set to announce a policy, stipulating that any future land allocation be carried out only through a transparent auction methodology.
A nine-member group of ministers (GoM) to tackle corruption, headed by finance minister Pranab Mukherjee, decided to recommend that land, especially for commercial and institutional purposes, be given out only through competitive bidding or transparent methods, such as e-auctions.
The policy, once implemented, would end the role of a broker that governments play when huge tracts of land are sold to corporations as was seen in the case of the Tata Nano plant, first in Singur in West Bengal and then in Gujarat’s Sanand.
The group of ministers has accepted the recommendations of an expert group set up in January last year under former finance secretary Ashok Chawla.
The committee said, “Nearby land uses and anticipated economic growth in the area are some of the factors affecting the market price of land. Therefore, unless complete facts are disclosed transparently, it may be difficult to realise the value for money.”
The policy will make it mandatory for governments to first announce the use for which land need to be “alienated” or set aside for specific purposes, such as establishing a car manufacturing plant.
The new policy will ensure higher price first to farmers or owners of land and later to the government agency that allots to industrial projects, a government official said.
This will be distinct from the current dominant practice where government agencies, such as state industrial development corporations, create banks by acquiring vast tracts of land on grounds of "developmental objectives" and later allot them to specific industrial projects.
The Chawla panel recommended that the Centre should take all steps "before any proposal for alienation of land is initiated to ensure that optimum value is realised by alienating such land".