Anand Sharma opposes removing industry from ‘public purpose’ definition

Trade and Industry minister Anand Sharma has spoken out in uncharacteristically blunt terms against a Parliamentary Committee report suggestion on the policy for land acquisition for industries.

The report had suggested excluding “manufacturing and industrial activity” and public-private project (PPP) from the definition of ‘public purpose’ for land acquisition.

The recommendation, if accepted, would make it nearly impossible for state governments to forcibly take land from people on behalf of corporations, for setting up of SEZs and industries.

The central government is rethinking the country’s land-acquisition policies in the light of massive protests by farmers and other affected people against forcible acquisition of their land. Governments can currently acquire land in the name of ‘public purpose’ and then pass it on to private companies for setting up of factories and industrial parks and zones.

Many activists have argued that the setting up of a factory by a private company cannot be considered a ‘public purpose’. Public purpose can only mean things that are done in the interest of the public as a whole, such as building a road, a port or creating other infrastructure such as parks and forests.

As such, a parliamentary committee has suggested excluding industrial activity from the definition of public purpose. It also sought to exclude PPP projects (government-private joint ventures) from the definition of public purpose.

Anand Sharma, however, opposed the suggestion, pointing out that industries — even if privately owned — are important to the nation’s future, and thus serve a public purpose.

India has been trying hard to reduce dependence on China and other countries for manufactured goods, such as electronics and other items, and encourage local manufacturing.

“States also play an important role in PPP projects when it comes to infrastructure expansion or building. States are doing the zoning of the land states will create the zone for industrial purposes. Now that is a public purpose that cannot be taken out of public purpose for land,” Sharma said.

“You can not take view which is regressive which prevents the growth of manufacturing or virtually would dampen the investors’ sentiments. We have to encourage investment in our economy particularly in the manufacturing sectors. The jobs will only be created there.

“We cannot take any step which, in fact, goes against the original spirit and de-industrializes this country or brings down industrial growth and investment,” he warned.

India is currently in the process of creating new manufacturing zones under its NMP and NMIZ policies. It aims to raise the share of manufacturing to 25% from 16% in a decade and create 100 million jobs.

“When industrial zones are created that where both the public sector and private investment come in. Even the FDI comes into those zones. We have to create a facilitating environment a welcoming environment for the industry where they feel confident to engage with us,” Sharma said.

State governments can forcibly acquire land in lieu of pre-fixed compensation rates for public purposes in India.

“We will definitely be in favour of a legislation which promotes growth which keeps principle of equity in mind when it comes to adequate compensation. But that should not be taken to an extreme where the growth and industrialization is brought to a halt or sharply slowed down,” he said, referring to provisions to ensure correct price for land.