SME Times News Bureau | 06 Jun, 2011
The country's leading industry lobbies hold opposite views on ways of acquiring land for industrial use with the Confederation of Indian Industry (CII) advocating government's role in land takeover and the Federation of Indian Chambers of Commerce and Industry (FICCI) opposing such interventions.

Both the industry groups referred to a recent proposal of Congress party chief Sonia Gandhi-led National Advisory Council which sought to disallow private firms from buying land directly from owners if the project entailed displacement of more than 400 families.

The advisory body was set up to provide policy and legislative inputs to the government on issues ranging from fund allocation to allied legal framework for upliftment of socially and economically disadvantaged groups.

Siding with the NAC recommendation on land acquisition policy, the CII said that the government's role was indispensable, as the ambit of its responsibility included areas like compensation, resettlement and rehabilitation of land owners.

"Industries need a facilitating agency to identify, acquire and provide requisite land with adequate support infrastructure," said B. Muthuraman, president, CII.

Countering the CII's stand, another leading industry lobby FICCI sided with the Uttar Pradesh government which came out with a new land acquisition policy that favoured direct land purchase by industry from land owners and farmers.

"The FICCI would also urge other States to adopt the market-based mechanism of land acquisition by industry and the government only facilitating the negotiations in a structured framework," said the industry lobby in a statement.

According to the statement, the government failed in many regions to provide land to the industry along with a satisfactory compensation package to land owners.

"The existing model, where the state plays a major role in acquisition of land, has not been found suitable for the industry and if not changed immediately will act as a major constraint for growth," the statement said.

The CII recommended setting up of an dedicated state-run body -- State Land Bank Corporations (SLBCs) -- to identify and acquire land for industrial purposes.

"Land bank corporations can act as a catalyst in industrial growth by not only identifying and acquiring land but also taking care of the rehabilitation of the affected households," Muthuraman said.

The FICCI also recommended that the government rather then direct intervention in land acquisition should legislate stricter rules and guidelines for a structured negotiating framework between the buyer and the seller.

"States can consider adopting the Haryana model of compensation which provides for payment of royalty for a period of 33 years," the FICCI said, adding that giving employment to the land owners within the project can also be made mandatory.