Disputes over land acquisition issues are breaking out all over India. At Singur, in West Bengal, where the Tata Group was supposed to set up its Nano car plant, confusion abounds. Mamata Banerjee of the Trinamool Congress, who led the agitation over the Tata acquisition of farmland, is now the state’s chief minister. One of her first acts after gaining power — she won the recent elections with Singur as one of her major campaign points — was to push through the Singur Rehabilitation and Development Act. The law would enable the government to return the land to the farmers.

Regarding this as a victory of sorts, the locals in Singur scaled the Tata walls and had to be restrained by policemen. As preparations were underway to return the land, the Tatas approached the Calcutta High Court and later, the Supreme Court. The Tatas say they have made an investment of US$400 million in the plant. The Supreme Court has asked the government to maintain status quo at the site and directed the Calcutta High Court “to dispose of the main matters as early as possible, preferably within a period of one month.”  What has particularly annoyed the Tata group is that the state government has claimed that the company failed to commission the project and abandoned the site. “The state government failed to ensure a safe and congenial environment which forced the company to shift the project,” say the Tatas.

This is not the only project in which land acquisition has become a controversial issue. (See Bumps in the Road: India’s Industrial Growth Seeks Solid Ground).

In Orissa, work at the Posco site was halted for several days. Posco, South Korea’s Pohang Steel Company, is planning to build a US$12 billion steel plant here. “Nearly 2,000 women, children and men formed a human barricade to prevent the entry of police and administration in the proposed [Posco] plant area, in what they say is a last ditch attempt to protect their land,” reports NDTV, a New Delhi-based media firm. In Uttar Pradesh, several highway and power projects are in limbo because of agitations, some of which have been violent. In Jaitapur in Maharashtra, where a nuclear plant has been planned, the same issue has caused widespread protests. Here, however, the anti-nuclear lobby has overshadowed the anti-land acquisition movement.

There is another side to the picture. In Rajasthan, in Barmer district, many farmers have turned millionaires overnight as oil major Cairn Energy has bought up their land. The company struck oil in Rajasthan a few years ago and now proposes to build a refinery close to the site. With the government having finally cleared the proposed sale of Cairn India to the UK-based Vedanta, controlled by Anil Agarwal, the refinery project is likely to be speeded up. Farmers in the vicinity are expecting another windfall as two other projects – a power plant and a lignite mining operation — are also being planned.

Debates are growing louder about what Indian farmers really want. Agriculture does not pay dividends and the future seems to be tilting in favor of large farms with consolidated landholdings run by corporations. The farmers’ own inclination, say many, would be to sell out if a fair deal is offered. Most companies in India – the Tatas, for instance – have been offering jobs as part of the compensation package when buying land. This gives the lie to the claim that the farmers will have no sources of income after the money they get for their land runs out. The other argument – that the farmers will take to drinking and gambling as has happened with some textile workers who were paid compensation when their mills closed down – is an argument for drawing rooms, not one you can use with the farmers themselves.

The reality is that land acquisition has become a political issue and a lot of would-be leaders are trying to climb on that bandwagon. Banerjee has shown the way; others are bound to follow. “The protest against land acquisition has become a national problem as some people want to politicize the issue,” says the apex chamber of commerce Assocham. “For the interest of the country the political parties should not politicize the land acquisition process.”

These agitations, whatever their catalysts, are causing a great deal of damage to India’s growth prospects. An earlier Assocham report released at the end of 2009 says that “delays in land acquisition for industrial projects [are] likely to endanger investments worth US$100 billion in the near term”. The report adds that “smooth implementation of these projects could have created job opportunities for at least 164,000 people directly and 270,000 people indirectly.”

At the end-June meeting with economic editors, Prime Minister Manmohan Singh said that amending land acquisition laws (along with foreign investment in the retail and insurance sectors) was at the top of his reform agenda. For land acquisition, at least, this move is more than a century overdue. The relevant legislation that is being sought to be replaced is the Land Acquisition Act of 1894.