The Indian Economy Blog

December 24, 2005

Eminent Domain And Suchlike

Filed under: Basic Questions,Regulatory reforms — Amit Varma @ 11:51 am

Shekhar Gupta writes in the Indian Express:

Have you sometimes wondered why reform in some areas of our infrastructure proceeds much faster than in others? You will see a clear pattern there. Anything that does not involve real estate, moves much faster. Telecom is a good example. Anything that involves land takes much longer. One of the greatest causes of delay in the national highway project is land acquisition. The Mumbai airport modernisation has run into the challenge of clearing the land — it desperately needs for expansion — of encroachments. Work in Delhi’s Commonwealth Games village has not begun yet because the Uttar Pradesh government, which owns a small part of the land to be acquired on Delhi’s side of the Yamuna, is loath to part with it. You go around the country listing delayed or blocked infrastructure projects and you will find this one, common thread: property.

Well, reforms get held up in sectors where there are powerful vested interests with a lot at stake, and property is obviously one those things when it comes to infrastructure. But I take issue with one of Gupta’s examples: I would imagine that the land acquisition issues that the national highway project is facing aren’t necessarily all due to vested interests, but also due to owners of private property resisting eminent domain. (That is, owners of land the government needs for the project not wanting to sell it to the government.)

In cases where an owner is not willing to part with his property, no price is fair, and a forced purchase is effectively theft. In fact, I would object to something like the Narmada Valley Project for the same reasons: that there is eminent domain involved, and people are being coerced out of their property. (Yes, yes, you can tell me all about the “common good,” but the greatest crimes of mankind have been committed invoking that dangerous term. To my mind, the common good is best served when everyone’s individual rights are safeguarded.)

Needless to say, there are few places in the world where private property is safeguarded from eminent domain. In the USA, for example, that principle suffered a sorry blow this year, with the infamous Kelo ruling. Pity.

10 Comments »

  1. One of the greatest causes of delay in the national highway project is land acquisition.

    In recent times, both Shekhar Gupta and Indian Express have mastered the clever art of delivering tautologies concerning the general state of governance in India which fit in well with conventional wisdom (“our politicians are damn corrupt”), but end up shifting away blame effectively from where it should be focused: the ruling class and its head honchos. The readers are lulled into a false sense of security that there is some good guy out there in the media voicing their concerns. The stereotype of media being the “eyes and ears” of the citizen is successfully reinforced. A crucial question remains: why are we being treated to mere analyses, when Gupta and his paper could be leading the campaigns-against-the-government that they are accustomed to leading? Why stop with giving us deep and profounds insights into why things are the way they are only, when those who are at the moment accountable for them can be held accountable?

    The National Highway Project is not in a state of mere ‘delay’, it has virtually stalled. What pontificating Gupta won’t tell you, given the boot-polishing services that his paper is rendering to the ruling dispensation, is that it has stalled not because of land acquistion problems but because Manmohan Singh and his party boss have no interest in that project. What Gupta further won’t tell you is that if there is a political and administrative will, there is a way, his high-falutin analysis and charming anecdotes notwithstanding. Transport minister in the previous government, BC Khanduri, with ample support from Vajpayee, had shown this will, and had gotten the GQ project off the ground, land acquisition etc done for the most part. If work had gone on at the same pace that it had during 2002-2004, a major chunk of it would have been completed by now.

    But a deep political partisanship pervades our public discourse. The Shekhar Guptas have a vested interst not only in not highlighting the example set by unsung heroes like Khanduri, but in shitfing blame away, for the current rot the highway project is in, from its particular new owners (Manmohan Singh) to abstract entities (“politicians”). What stops them from running a campaign on their front-pages, highlighting the neglected state of the project, and challenging TR Baalu and Manmohan Singh as to what is going on?

    The men who effect reform, as also those who advocate it, must be – and seen to be — men of principle and impeccable integrity. The ‘reform’ of the crony capitalist is no reform at all, no matter how loudly his media publicists push that line. Such ‘reform’ becomes a handy stick for the status quoists to beat the whole idea of reforms with.

    Comment by RR — December 25, 2005 @ 11:59 am

  2. I disagree that the ruling class has to blame. It’s the people who voted these bunch to power last year who are responsible. Laloo and others argued that India does not need roads and people voted for the likes of Laloo during the last elections. So, it’s the people of India who have to be blamed. In a democracy, the ultimate blame/credit for the state of things lies with the people.

    Comment by sv — December 26, 2005 @ 12:14 am

  3. Eminent domain is required by law. What happens tommorow when we need 10 new ports for defense and trade purposes? This kind of transaction takes forever in india.
    People dont bother with ‘registeration’ of property b/c of high fees and so so legal protection. The goverment on paper has no idea who owns what property.
    Ideally a beurucrat, city planner needs to see how much it will cost for an eminent domain project, he cant just pull the numbers from a property tax data base, yet despite being an alleged it superpower this type of work takes months/years….Then the negotiations etc begin.
    If india had a clear property tax and registration system, it would have greater economic growth. The benifits are toomany, peace of mind, productivity increase(both for individuals and government), Ease of getting loans etc
    All this unfortunately is tied to the lack of credible identity in india.
    The ration card reflects the sickness. The rationing system should be abolished(but thats another topic in itself).
    If every one had an ID card which is used to pay taxes, buy property, (even rationing if needed in some emergency) governance would improve.

    Comment by Guru Gulab Khatri — December 26, 2005 @ 1:27 am

  4. Brilliant post, Sir

    “Common Good” is a term which scares the living daylights out of me.

    Some fine AR Quotes on this:
    “When “the common good” of a society is regarded as something apart from and superior to the individual good of its members, it means that the good of *some* men takes precedence over the good of others, with those others consigned to the status of sacrificial animals.”

    “The right to agree with others is not a problem in any society; it is the right to disagree that is crucial. It is the institution of private property that protects and implements the right to disagree…”

    Comment by Vulturo — December 26, 2005 @ 3:43 pm

  5. Amit and Vulturo,
    can either of you posit a way around eminent domain? Without this tool I cannot see how the indian governemnt, already crippled with red tape, can ever improve the country’s decrepit infrastructure.

    You must also consider that eminent domain does not only allow aquistion of land from people who are not willing to part with it regardless of compensation, it also assures that people who are willing to sell their property don’t demand ridiculously high prices.

    This law not only makes infrastructure projects physically possible, it makes them economically viable as well.

    Comment by Patel — December 26, 2005 @ 4:15 pm

  6. Pardon me for disagreeing with two points in you post.
    First is related to Mr Gupta’s observation that “anything that does not involve real estate, moves much faster”. Undoubtedly this assumption is true for most cases, but the way work on Delhi Metro has progressed indicates that one true professional can change the trend. All you need is the will to implement.
    My second disagreement is with your point that “a forced purchase (for sake of development) is effectively theft”. I believe it isn’t. If one person’s sacrifice has the potential to benefit thousands, it’s worth it. Of course this theory should be restricted to development only. This is the way we as a species can progress. You have to take tough decisions at some point in time. When you run the nation, think for development to survive in this world and see the economics, you have to take practical decisions and not emotional decisions.

    Comment by Nishant Kumar — December 26, 2005 @ 4:59 pm

  7. ‘Common good’ has turned out to be a euphemism for vested interests masquerading as tools for development of the common folk. However, what tells you that privately owned property is would be sold at exorbitantly high prices citing the demand by the government? Not to speak of sending the prices to skyrocket artificially?

    Is there a workaround instead of working on some utopian beliefs/assumptions?

    Comment by KoPoS — December 27, 2005 @ 10:13 am

  8. Okay, without eminent domain, how would airports and highways be constructed?

    Comment by AK — December 27, 2005 @ 10:29 am

  9. One way I can think of around the eminent domain problem, is to give the people affected a stake in the project. So rather than giving some arbitrary amount land or money, a share of future revenues of the project can be given to them. something like preferential shares. These shares can then be sold by them at anytime, so as such they are not entirely deprived of the property.

    Also it is very important to look at the general case. In the general case eminent domain is not used for roads and ports which are for specifically public good like purposes. It is used for transfering land from recalciterant land owners to large private corporations that can get the government to guarantee the evictions. Such is the case in the least developed states such as Jharkhand. Eminent domain is bad not because of the power it gives the government to acquire land for the public good (whatever that might be), but because it gives vested interests the chance to manipulate this government power in their private interests.

    Comment by Gautam — December 28, 2005 @ 12:34 am

  10. [...] expresses dissent against the concept of ‘eminent domain’, i.e. governments grabbing (purchasing by force) private land, if individuals refuse to sell it to the government for infrastructure/development [...]

    Pingback by Eminent Domain And Suchlike | DesiPundit — December 27, 2008 @ 5:09 pm

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