How Mamata Banerjee’s Short-Sighted Land Acquisition Policy Has Blocked Bengal’s Growth

West Bengal Chief Minister Mamata Banerjee has once again strongly reiterated her short-sighted opposition to ‘unfair’ acquisition of land for public projects on Wednesday (23 November).

But while her myopic policy on land acquisition may win her the support of a small section of people, many of whom are squatters on government land, it has severely stymied Bengal’s growth. 

Thanks to this policy, many crucial public projects like construction of highways, flyovers, the Metro Rail in Kolkata have not progressed and are lying incomplete.

Big investors are giving the state a wide berth due to the state government’s adamant ‘hands-off’ policy on land acquisition. 

Wednesday (23 November) saw Chief Minister Banerjee urging people of Bengal to “resist” any attempts to acquire their lands without “fair compensation”. She also urged them to launch agitations if such attempts were made and assured them that she would stand beside them. 

This once again leads to the apprehension that for the sake of populism, Banerjee is happy to sacrifice the interests of her state!

Her protracted agitations against land acquisition that drove the Tata Motors project out of Singur and prevented a mega chemical hub from coming up in Nandigram, catapulted her to power in Bengal. 

Since then, she has steadfastly refused to help private investors and public entities like the National Highways Authority of India (NHAI) or the Railways acquire land from private landholders or even those who have encroached on public land. 

In fact, a few weeks ago, Banerjee said she would not allow eviction of squatters from land belonging to the railways even if that means crucial railways projects get stalled. 

How Public Projects Are Affected

As per Bengal’s hands-off policy on land acquisition, all entities — be they private investors or public sector undertakings — have to negotiate directly with the landowners or encroachers (on government or private land) and acquire land from them for their projects. 

This has encouraged landowners and encroachers to demand hefty and, very often, completely unjustified amounts, even a few times the market rates for the land they own or squat on. 

And that has not only led private investors to give Bengal a miss, but also stalled innumerable public projects. Many projects of the NHAI to build new highways or widen existing ones have either halted or are progressing at a snail’s pace due to intractable problems over land acquisition. 

A prime example of this is the ambitious Metro Rail project in the Kolkata Metropolitan area.

While other metropolitan cities are witnessing construction of this mass rapid transit system at a very fast pace, the one in Kolkata has been crawling along at a frustratingly slow pace for the past couple of decades. 

New highways cannot be constructed and many existing ones cannot be widened simply because land-owners or land-encroachers refuse to shift unless they get the hefty compensations they ask for. 

“We cannot acquire land from private entities at arbitrary rates. These rates are laid down for all categories of land and we cannot increase the rates. A major problem is acquiring land from encroachers. These encroachers don’t have any land documents and so it is not possible for us to give them any compensation for the land (mostly government land) they are squatting on,” a senior NHAI officer told Swarajya. 

Also, any land acquisition process gets complicated with the involvement of local politicians belonging to the rural party.

“Local politicians get involved and encourage land-owners and squatters to demand very high compensation. The politicians then take a cut from the compensation that is given to landowners. This doesn’t happen in other states,” the NHAI officer said. 

The Kolkata Metro Rail expansion project is a prime example of how Mamata Banerjee’s myopic land acquisition policy has affected a crucial public project. 

A majority of the Metro Rail lines under this project’s expansion plan are lying incomplete or construction hasn’t started at all because the Metro Rail authorities have not been able to get landowners and encroachers to agree to the fair compensation being offered to them.

A lot of privately-owned land in Bengal is under litigation — Bengal is a very litigious state — and so acquiring such land is practically impossible without the help of the state government.

“Very often, the state government’s help in negotiating intractable disputes over land is crucial, but we get little help and that has stalled many projects,” said a Kolkata Metro Rail Corporation (KMRC) officer. 

Why Private Investors Give Bengal The Miss

If large public sector entities like the NHAI and KMRC find negotiating land acquisition in Bengal a highly complicated exercise, private investors look upon it as a major disincentive for coming to Bengal. 

Land holdings in Bengal are small and fractured with even one bigha of land having multiple owners. Negotiating individually with all of them is virtually impossible for a private investor. 

Also, landowners in Bengal hike the prices and ask for much more than the prevailing market rates once they come to know that a private industrialist or investor is interested in their land. This often renders an entire project unviable. 

“No private investor has the time and patience to negotiate with individual landowners for acquiring their land for a project. State intervention and help is crucial. In all other states, the government helps investors by acquiring land on their behalf from private landowners. And in no other state do encroachers also have to be compensated with hefty amounts for getting them to vacate the lands they have illegally encroached upon,” said the owner of a steel rolling unit in Hooghly district, who had to shelve his expansion plans after failing to acquire land. 

The Bengal government claims it has huge land banks and private investors can set up their units on plots in such government-owned land banks.

But these land banks are mostly in the under-developed and backward areas of the state that are far from arterial highways or major railway lines. 

“There are many factors that dictate an investor’s choice for land. The land banks owned by the government in Bengal fail to satisfy many of these factors and are, hence, unviable,” said a steel bearings manufacturer, who was interested in setting up an unit in Howrah district adjoining Kolkata, but took his project to Odisha. 

“I found it impossible to negotiate with over 20 owners of a large plot of fallow land that I was interested in buying in Howrah. They hiked the value of their lands once they got to know that I was interested in setting up an unit there, local politicians and brokers got involved and then local people started demanding jobs in my proposed unit. It was too much to handle and I went off to Odisha which offers much better facilities,” he told Swarajya. 

There are a huge number of investors like him, including some big-ticket investors, who have cancelled their plans to set up units in Bengal after running into land acquisition hurdles. 

But Mamata Banerjee Is Not Bothered

But all this — investors shying away from Bengal and major infrastructure projects not taking off or progressing at a snail’s pace — does not bother the populist Chief Minister of Bengal. 

“For Mamata Banerjee, populism triumphs over the long-term interests of the state. She has moulded herself as a defender of the rights of the poor, but will do nothing to help the poor emerge out of poverty. Stalled infrastructure projects and missed investment opportunities are of no consequence to her since she knows that she can keep the masses happy with doles and sops,” said economist Prashanto Bose. 

Mamata Banerjee knows that she will not lose votes just because a highway has not been constructed or a flyover is lying incomplete. She knows her support base will not be affected if investors do not come to Bengal. 

The Chief Minister knows very well that while the best, brightest and the industrious leave Bengal to work in other states and even other countries, its mostly the dull laggards and below-mediocre who stay back in Bengal.

And minor doles and sops are enough to keep them happy and on her side. 

That is Bengal’s blight.