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Naidu’s New Formula of Land Acquisition – Land Pooling

Chandrababu Naidu government approaches the issue of land acquisition in a different way, providing a better deal under the new scheme of  “Land-Pooling”. Center government may draw some ques from this and address concerns raised by the farmers and other organisations.  The Indian Iris Research Team looks into it..


On June 2, 2014, a new state, Telangana was carved out from north-western part of the state of Andhra Pradesh. After much upheaval, both the state agreed on the demarcation line. The original capital of this province, Hyderabad lies in Telangana. As per the Andhra Pradesh Reorganization Act, 2014, Hyderabad will remain the capital for both the state for not exceeding more than 10 years.

In the assembly election held in May 2014, Telgu Desam Party got a clear mandate under the leadership of Chandrababu Naidu, and he also became the first Chief Minister for the new state of Andhra Pradesh. The newly elected government was left with daunting tasks of not only streamlining an effective administration but also building a new capital.

CM Naidu finally after long deliberations identified the 30,000 acres of land area between the Guntur and Vijaywada region on the southern side of Krishna River, named as Amravati. It is mainly an agricultural area. Considering the importance of land to farmers, the state government opted for “Land-Pooling” (LP) instead of “Land Acquisition” (LA). Till now, the government has successfully procured 3900 acres of land under this new process. The state government with the support of central government is moving ahead in designing this mega city. They are also in collaboration with the Japanese and Singapore Government to construct this area as a ‘smart city’.

Naidu’s LP process is an example of how land acquiring can be a win-win situation for both parties; farmers and governments. It is well known that land acquisition has been remained an obstacle for rapid development, and many projects have been delayed due to lengthy process of land acquiring.

Land Acquisition Bill

The current NDA government in centre has changed the LA Act 2013 and waived the “consent clause” and “Social Impact Assessment” (SCA) enacted in previous act. LA 2013 has a time consuming process due to its emphasis on SCA which takes years to come up with the report. These are very critical issues, and the government has failed to come up with a comprehensive plan which would held the interests of farmers or affected people. As the new “Land-Acquisition Bill” remains on hold, it is expected that future projects may get delayed by more 3-5 years. Opposition parties and to some extent private entities both have criticized the government for not carving out a practical roadmap for land procurement. It can also become a hurdle in Modi’s “Make in India” initiative in the long run if Indian government doesn’t find a solution for this problem soon.

A Better Deal

  • But the newly proposed Land Pooling scheme under the Andhra Pradesh government may prove as an alternative for on hold LA bill.
  • Chief Minister Naidu has a very simple strategy- to make all farmers stakeholders in the new capital. After 10 years, when the capital is developed, farmers will get back almost 30% of their pooled land in the newly built mega city.
  • Perhaps, this strategy would lead to a road of prosperity, not deprivation.
  • Present farmers will become land-lords of the ultra-modern city, and they will also get a means of livelihood under this scheme.

What Land-Pooling scheme offers to farmers?

  • The individual will get the government developed land – 1000 square yard residential + 200 square commercial land.
  • The farmers will be paid 30,000 to 50,000 INRs per acre for 10 years.
  • The government will also provide one time waiver of farm loans up to 1.5 lakh INR.
  • Land-less owners will get a pension of INR 2,500 per month.
  • Skill development centres have been opened to train the farmers for probable new occupation in future.

The capital is being developed in the fertile land of Krishna-Godavari belt. Currently, the market price in this area is 1 to 2 crore per acre. Once the capital will be built, it is projected that same land will worth 8-9 crore per acre.

The success of this scheme also indicates that farming is not an attractive profession in India. Farmers are ready to leave their land voluntarily provided that they get better deals in exchange of their lands. LP provides a new approach for land procurement and it promises a better option than present Indian government LA scheme.

Naidu is providing both options to farmers; either they pool their lands voluntarily or they can choose to be compensated by Indian government’s LA scheme. Some 400 farmers are against this land pooling and they claim that they will get a better deal under the LA scheme. CM is confident that in the end most will ultimately prefer the pooling.

It has set an example for the Indian states. The central government should also look into this land procurement scheme for pacing up the delayed projects caused by present scheme.

The success mantra of this model can be attributed to two factors:

  1. The scheme is voluntary in nature;
  2. It makes farmers stakeholders in the development of the capital.

Naidu has proved that rapid development is possible without depriving the actual stakeholders, in this case farmers. Also, it shows an inclusive growth model where every section of the society is included in developing a city which promises a better life and livelihood.

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