Vicissitudes in the Acquisition of Land a Case Study

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February 15, 2014 vol xlix no 7 EPW Economic & PoliticalWeekly74

Vicissitudes in the Acquisitionof Land: A Case Study

Dhanmanjiri Sathe

This is a revised version of a paper presented at

a national seminar on Interrogating the

Indian State organised by the Department of

Politics and Public Administration, University

of Pune on 24-25 February 2012, and was

published as The State and Land in the

Seminar Proceedings Series, No 1, titled

Democracy and the State in India, edited by

Mangesh Kulkarni, 2013.

Dhanmanjiri Sathe ([email protected]) is

with the University of Pune.

After touching on a few issues

related to the increasing cost of

land in the country and hence

input costs, this article examines

the case of Maan village near

Pune in Maharashtra. There has

been a sea change in the attitudes

of landowners to land acquisitionand compensation. Three phases

can be identified in this saga and

the landowners are now not only

coming up with alternatives,

but are also more confident

about demanding what they

want. They have become

business savvy in their dealings

with the authorities.

Indias politics may seem noisy,

chaotic, and at times acrimonious,

but if one were to probe beneath

its surface, one would find a certain

amount of unanimity on some issues.

One among them is industrialisation

and the acquisition of land for it. Several

major parties across the ideological

spectrum agree that India needs to have

a high rate of growth and to that endmore and more land will have to be con-

verted from non-industrial use to indus-

trial use. The only note of dissent is

sounded by some Gandhians and non-

governmental organisation (NGO) lead-

ers (like Medha Patkar) who talk of

alternative development.

As the rate of growth of the economy

has increased, so has the demand for

land for non-agricultural purposes, and

we can quite correctly expect the

demand for land to rise in the future.

One would not be exaggerating much ifone were to say that this single issue will

be a very important test case for Indias

political economy and show us the

ironies facing the countrys develop-

ment. In the matter of demand for land,

India is quite similar to China, another

economy that has a high rate of growth

and high pressure on agricultural land.

To put Indias case in perspective, in

2005 alone, official data suggest that

China had more than 60,000 local

disturbances over the issue of land

(Banerjee et al 2007). Since then, the

Chinese government has not come out

with this data.

Quite expectedly, the issue of land

acquisition is inextr icably linked to the

compensation package offered to those

who part with their land. If the last

couple of years have seen more land-

related disturbances, it has also seen

substantial increases in the compen-

sation paid. If landowners are to be

given a fair deal, this would have to

increase by how much, this would

depend on specific situations. The

Government of India passed the Right

to Fair Compensation and Transpar-

ency in Land Acquisition, Rehabilita-

tion and Resettlement Act, 2013 in

August 2013 and it came into force

from 1 January 2014. As per this Act,

the compensation paid to landowners

wil l rise, making the Indian economy

that much more cost ly.

It has been found that the capital cost

of land for new corporate projects wor-

ked out to 1.8% of gross fixed asset

value in 2003, and it increased to 2.9%

in 2008 (Kakani, Raghu Ram and Singh

2008). A higher input cost affects twosections. First, producers producing for

the domestic market, be they national

or multinational. Since the Indian econ-

omy is still fairly closed, producers will

be able to pass on the higher cost of

land to domestic consumers mainly

middle-class consumers who will have

to pay more for goods such as TVs, cars,

two-wheelers, and so on. In such a case,

the profits of companies will not fall.

The second category is exporters, who

may or may not be able to pass on

higher costs to foreign buyers as thereis fierce competition in international

markets. They most likely will not be

able to pass on the higher cost, and will

see their profits dip. Thus exports could

become slightly less attractive, decreas-

ing their rate of growth. This could

affect Indias overall foreign exchange

position; decrease the rate of growth of

jobs, and so on. There are a plethora of

factors that affect export performance

and the direction it will take cannot

be predicted.

Further, as compensation increases,

housing and infrastructure projects will

also become more costly, making the

Indian economy that much more costly.

On the other hand, if land prices become

very high in an area, buyers will go to

cheaper places. This would most likely

be backward places, and this could bring

about a better spread of economic

activity. Thus the objective of regional

diversification could be achieved to a


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Economic & PoliticalWeekly EPW February 15, 2014 vol xlix no 7 75

certain extent, albeit unintentionally

(Sathe 2011).

From a macroeconomic perspective,

land and labour will most likely become

more expensive in India in the future.

While this is expected and well docu-

mented in the case of labour, it will be a

new development in the case of land. In

China at least until now they have

kept land costs low. Possibly we could

develop the idea of land intensity of

various economic activities, on the lines

of labour intensity and capital intensity.

While the implications of increasing

costs are one side of the story, the other

side is how landowners will be compen-

sated. There are many deficiencies and

flaws in the Act mentioned, which have

been pointed out by experts. Further, we

do not have any experience of how thislaw will be implemented. In addition,

one-time compensation still leaves out

the issue of future appreciation of land.

Even if an acceptable compensation is

paid now, landowners feel cheated if the

future appreciation accrues to the inter-

mediary (be it a government or private

entity). It is in this context that the case

study gains importance.

The Story of Maan

We have conducted a case study of

Maan village, which is around 20 kilo-metres from Pune in Maharashtra. The

story of Maan begins with the estab-

lishment of an information technology

(IT) park in the adjacent village of Hin-

jewadi. The land was acquired in 2000,

after the Mumbai-Pune expressway was

built and the project was called the

Rajiv Gandhi Infotech (RGIT) Park

Phase I. All the land was acquired by

the Maharashtra Industrial Develop-

ment Corporation (MIDC), which is the

industrial development arm of the state

government. However, in the first

phase, only 100 acres of grazing land

(gairan) were acquired. Of this, 20

acres were occupied by the people dis-

placed from the Kasarsai dam, so that

land was not affected. Effectively, none

of the farmers lost any agricultural land

and hence there was no problem in Hin-

jewadi. The RGITPark Phase Inow has

around 20 software companies, includ-

ing Infosys and Wipro.

The MIDCreached Maan village when

phase II began. Maan has an area of

5,200 acres and, as per the 2001 Census,

a population of 4,500. In phases IIand

III, 2,981 acres were acquired by the

MIDC. In both phases, the compensation

paid was Rs 6-6.50 lakh per acre. Plus,

for an additional payment, a house of

200 square feet was also given. How-

ever, Chandrakant Rakshe, a landhold-

ing villager, said in an interview that at

that time they did not understand the

importance of land. They wanted to help

the government, thinking that some of

them would get jobs and that develop-

ment would help them all. But their atti-

tude changed as they saw the MIDCsell-

ing the same land to private companies

for Rs 8-9 crore per acre after providing

just some infrastructural facilities suchas roads. So a problem arose when the

MIDCwanted to acquire land for phase IV,

which was earmarked for biotech firms.

Under this phase, 1,150 acres are to be

acquired and Rs 40 lakh per acre has

been promised to landholders, a sub-

stantial increase from the Rs 6-6.50 lakh

per acre in the earlier phases. In all the

phases together (II, IIIand IV), there will

be a loss of 80% of the land in Maan vil-

lage and only 1,069 acres will remain

with the villagers.

The notification of phase IV came inAugust 2004 and Anant Vazarkar, who is

the coordinator of the Maan Bachao

Action Committee (MBAC), says, We

woke up. On 26 January 2005, the gram

sabha passed a resolution that acquisi-

tion of land would be opposed. The

action committee was formed on that

day. At the same time, then Chief Minis-

ter Vilasrao Deshmukh participated in

an exhibition in the USand non-resident

Indian (NRI) buyers booked the land,

something that was, quite rightly, resen-

ted by the landowners.

On 1 March 2006, acquisition officers

came to the village and began to meas-

ure the land, but they could not finish

their job because of the tense atmos-

phere. On 7 March 2006, MIDCofficers,

acquisition officers, and 3,000 police-

men came to the village. The members

of the MBACtried to prevent them from

measuring the land and were arrested

for obstructing government work. There

was a police firing in which two people

were injured. Agitations against the land

acquisition were held again on 9 March

2006. On these two days, there were

3,000 policemen in the village indicat-

ing the importance the government was

giving to the issue. As a bargaining tac-

tic, Sharad Pawar, union minister for

agriculture, announced that if the villa-

gers refused to give their land, the gov-

ernment would declare it a green belt,

which would, in effect, condemn the

villagers to holding the land as agricul-

tural land. Social activist Patkar and

former prime minister V P Singh visited

the village to show their solidarity with

the villagers.

Vazarkar said that not a stone was

thrown at any of the glass buildings of

the companies during the agitation.This shows that the villagers knew the

difference between targeting the govern-

ment and targeting the companies. They

have had to face harassment such as

water not being released regularly from

the Kasarsai dam. But the supply of

electricity has improved and it is now

available for 23 hours. The ceasefire,

as Vazarkar described it, lasted for

six years.

Suddenly, on 28 December 2012, the

cases against the vil lagers were opened

and summons were served on 2,500 plus11 villagers (of which four were elderly

women and two are the young men who

were injured in the police firing). The

villagers were accused of attempting to

kill the police and MIDC officers and

obstructing government work. It was

claimed that 250 policemen were injured.

It seems charge sheets were filed in

November 2007, but no one in the village

was intimated or arrested. They did not

even know that there were such charges

against them till 28 December 2012. In

mid February 2013, all these people were

summoned by the court, but only a few

went. The villagers claim that the gov-

ernment is now arguing that the 2,500

plus 11 people were absconding for six

years. In this context, an unexpected

issue has come up. How does an accused

villager prove that he or she was in Maan

during the six years (ration cards and

electricity bills do not prove that he was

not absconding)? Interestingly, a case


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February 15, 2014 vol xlix no 7 EPW Economic & PoliticalWeekly76

has not been lodged against Vazarkar,

who says his presence at his Mumbai

office can be easily proved since he is a

government servant.

The villagers accept that they threw

stones at the police and MIDCworkers,

but this was in a response to the firing by

the police at the peaceful demonstra-

tion. They state that the agitation was in

no way planned. When the villagers saw

that someone was measuring land, they

spontaneously came together as by then

they had lost faith in government and

learnt that they were about to be offered

an unfair deal.

When there were agitations after the

police firing, neither the sitting member

of Parliament (MP) nor the member of

the legislative assembly (MLA) visited

Maan. After the summons were served,the MBACmet Supriya Sule, the MPfor

Maan. Her response was, If you want

development, then land is required.

This is right, but it raises a clichd ques-

tion, Whose development? The MBAC

also met Deputy Chief Minister Ajit Pawar

(and the guardian minister of Pune dis-

trict) and Home Minister R R Patil. Patil

said in the first meeting that the govern-

ment would withdraw the cases, but in

the second said that the legal process

must take due course and that the

accused should apply for bail. So theissue has not been addressed to the satis-

faction of the villagers. The people of

Maan suspect that Sule and Ajit Pawar

(Sharad Pawars daughter and nephew

respectively) have privately acquired a

sizeable section of land in Ghotawade, a

nearby village. That land does not

become valuable until Maan develops,

and this could explain the renewed

interest in Maan.

The village is now rife with rumours

about what will happen next. It is feared

that the protesting villagers will be jailed.

The sessions court and the high court

have not granted bail to any of them.

The villagers say that this is an attempt

to terrorise them and divide them.

Six years has made a lot of difference.

As Vazarkar put it, a boy who was 12

years then, is now 18-19 years old and he

may be more aggressive and worldly

wise than his father. The demands of

the landowners have undergone a sea

change and one can say that a great deal

of clarity has evolved in last one year.

The landowners have become very mar-

ket savvy, and say that they want to

build housing complexes in the area and

rent out the apartments. They have seen

realty giants such as DLF, Quardan, and

Raisoni Park build apartment complexes

in their vicinity and rent out apartments,

earning money running into crores. It is

claimed that the current rent is Rs 15-20

per square feet. We want to develop our

area on our own is their mantra.

Landowners Options

The villagers say that they do not want

any companies in the village, only resi-

dential complexes. However, there may

be a few problems. First, the important

question is whether the landowners havethe necessary skills to develop the

area. If they sublet the job, their mone-

tary returns could suffer. Second,

though Maan is quite close to Pune, it is

not a part of Pune, yet and there is no

local, public transport between Pune

and Maan. Will there be adequate

demand for the apartments in such a sit-

uation? Punes housing demand over-

flowing to Maan is not a realistic sce-

nario. This could be a problem for the

villagers in the short run, and their

financing needs will have to be adjustedto suit it (if this idea really goes ahead).

Faulty financing of housing projects

traps landowners in another sort of

indebtedness. As is well known, behind

the increasing prices of real estate in any

Indian city, there is also stagnation and

possible slumps in the real estate indus-

try. Unless pockets are deep, developers

can run into problems. So things may

not turn out to be as upbeat as perceived

by the landowners now.

A second option that the villagers are

working on, though not in a big way, is

to take the path of Magarpatta city

(another part of Pune), where the land

has been leased out for 100 years to com-

panies and residential complexes. The

landowners collect rent. As the situation

stands now, the landholdings earmarked

for phase IVhave their 7/12 utara(land

record) stamped, which means that they

are going to be acquired. But, on the

ground, the land has not been acquired.

Consequently, the farmers who own

these lands cannot mortgage them to get

loans from banks, making life hard.

Meanwhile, the value of the remaining

20% of land has risen sharply. There are

very high amounts being offered for it,

but the gram sabha has passed a resolu-

tion that no more land is going to be

sold. The question remains about what

will happen if someone actually decides

to sell his or her land.

The population of the village now is

around 7,000-8,000, of which 3,400 are

voters. The villagers say that there are

a lot of people who stay in Maan and

work outside, mainly in Pune. So families

that have rooms to rent earn between

Rs 5,000 and Rs 6,000 per month per

room. On the other side, there are poor

migrants from Rajasthan and Bihar whowork on construction sites at very low

wages. Villagers say that they have made

Maan unclean. According to newspaper

reports, about 50% of the children in the

village go to English-medium schools.

We observed five beauty parlours in

the village.

The following are some of the impor-

tant issues that have cropped up.

(1) A severe problem is that many

families jointly own land. Even if the

compensation seems apparently high at

a particular stage (Rs 6-6.5 lakh per acrein 2001), if a piece of land has eight or

nine owners, each family may end up

getting only Rs 80,000. We interviewed

some families that have had such

experiences in 2001. Thus joint owner-

ship has important implications from the

point of view of the compensation pack-

age. A sum may seem reasonably high

for an acre, but if there are too many

owners, as is often the case, each family

ends up getting a meagre monetary

compensation.

(2) It was a matter of great anger and

frustration among villagers that in spite

of earlier promises, hardly any jobs had

been given to them. There seem to be

two reasons for this. The first one has

to do with the type of employment

available in the companies. The com-

panies directly employ only highly skilled

workers. For relatively unskilled and low-

skilled jobs such as cleaning, security,

catering, and gardening, contracts are


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Economic & PoliticalWeekly EPW February 15, 2014 vol xlix no 7 77

handed over to outside agencies. Since

the latter have not acquired land, no

employment conditions can be imposed

on them. A look at the kind of companies

that have come up and are expected to

come up in Maan shows that the demand

for unskilled and low-skilled workers

will be limited. For example, even if a

company or agency decides to employ a

villager as a security guard, he will need

to have a minimum knowledge of Eng-

lish and the ability to use some elec-

tronic equipment, and so on. So possibly

only a young person can be trained and

employed. Second, the villagers claim

that the companies do not want to hire

local people as they are more demand-

ing and get into arguments. Besides, dis-

putes are likely to trigger the involve-

ment of local politicians, which the com-panies do not want. So they prefer

migrant labour. Even if a local person

gets the job of a security guard, he would

get a wage of Rs 5,000 per month, which

is not enough to support a family.

(3) Discussions with villagers revealed

that they had little faith in the govern-

ment. They stated that they would rather

sell their land to private parties directly

than to government agencies. With the

recent plan of building residential apart-

ments themselves and renting them out,

the villagers have lost whatever littleinterest or trust they had in the govern-

ment. However, at this stage, buyers pre-

fer that the government acquire the land

and transfer it to them as it would save

them a lot of money and headache.

(4) It has become difficult to get agricul-

tural labourers in Maan. Vazarkar did

not till his land in 2011 because he could

not get enough workers. Though the

working age population does not get

employment in the new companies, they

do get other kinds of non-agricultural

work, which is a result of development

in the area. Examples include driving

autorickshaws, working as assistants in

sundry shops, working in car repair

garages, transporting goods, and so on.

The income from these jobs is higher

than what they would earn as agricul-

tural labourers.

(5) The sense that we got in the course

of our interaction with the villagers is

that they feel that they should not lose

all their land. While they are aware of

the benefits of developing/selling their

land, having no land at all makes them

feel very vulnerable. As one woman put

it, If you have some land, you will not

starve. This may not be true if the land

holding is small (and most holdings are),

but this is the perception. During earlier

fieldwork done by the author (Sathe

2007) in Avasari Khurd, a village in

Nashik district, it was found that the

farmers are very nervous about parting

with all their land. They liked to keep at

least a small part of it, at least for their

peace of mind.

(6) The media has been criticised for the

manner in which it has covered the issue

of land acquisition in general. It is

claimed that the electronic media has

tended to sensationalise the issues. Thevillagers were very happy with the

attention they have received a few said

that but for the media they would have

been kil led.

Conclusions

One of the most interesting revelations

of this study is that landowners have

shown themselves to be able to respond

to the changing situation. They have

been coming up with alternatives that

show a willingness to engage with the

market in a confident way. The story ofMaan has unfolded in three phases. In

the first phase, the landowners believed

that by giving up land, development

would come to their village. They were

not particularly unhappy with the mon-

etary compensation, but they were hop-

ing for more in terms of employment and

so on. The village was quite backward,

its land market was underdeveloped,

and land prices were low. So whatever

changed seemed to be for the better. The

second phase began in 2005 when the

landowners understood the value and

importance of their land. Knowledge

about this made them unhappy with the

deal that they had got. Now, it is possible

that they would sell their land if the

compensation is Rs 1 crore per acre

instead of Rs 40 lakh. Since that is not

on offer, they have decided not to sell

their land at all. Now, in the third phase,

they have come up with the idea of

developing the land themselves and

earning a rent from it. This will retain

ownership of the land and get an income

in the form of rent. The rent will not only

be high, it will be adjusted for inflation,

making their future secure. Plus, allfuture appreciation of land will accrue

to them. Though there are a few prob-

lems with this arrangement, they are not

insurmountable. From the point of view

of the economy, replicability may not be

possible (as land is required for indus-

tries and infrastructure projects and not

just for housing). But Maan village seems

to have found an answer for itself.

References

Banerjee, A, P Bardhan, K Basu K, M D Chaudhari,M Ghatak, S Guha, M Majumdar, D Mookherjeeand D Ray (2007): Beyond Nandigram: Indus-trialisation in West Bengal,Economic & Politi-cal Weekly, Vol 42, No 17, pp 1487-89.

Kakani, R K, T L Raghu Ram and Tigga NutanSingh (2008): Insights into Land AcquisitionExperiences of Private Business in India,Working Paper 08-11, XLRI, School of Businessand Human Resources, Jamshedpur .

Sathe, D (2007): When Farmers Form a Com-pany,Economic Times, 17 October.

(2011): The Political Economy of Land andDevelopment in India, Economic & PoliticalWeekly, Vol 46, No 29,pp 151-56.

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