Should the state buy land for the private sector?

BJP leader M Venkaiah Naidu makes some good points in a debate in BS:

Land acquisition through the state is inherently unfair to the land owner since it is done through the Land Acquisition Act, which is a unilateral piece of legislation, heavily favouring the state in its power to acquire land. The Land Acquisition Act had been brought in primarily to acquire land for developmental purposes, for purposes serving the greater common good, like roads, bridges and other such projects. In such cases, the state is free to determine the amount of compensation that land owners get.

The SEZ or industrial unit that is being set up is in that sense not a “governmental” project, but a commercial one. Our examination of SEZs/industrial units has shown that promoters prefer that land be acquired by the states in question and then resold to promoters as a chunk. They prefer this to negotiating with each farmer on market prices. The Land Acquisition Act is so skewed in favour of the state government, that many times, there is a huge difference in the price paid by the government to the land owner and the rate at which the land is resold to the SEZ promoters/industrial units. The promoters who gain a lot from the project, don’t mind paying a bit more for the land. Would it not be better if this premium on the land could be encashed by the land owner rather than the government?

This puts the government in the role of a land shark or even a real estate agent, which is not its job. We want that SEZ promoters/industrial units negotiate with the land owner and determine a fair price through the mechanism of the market.

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