Redevelopment in India – It’s the Same the Whole World Over

Back in the old days, there used to be a vaudeville song that was sung in British music halls that went

It’s the same the whole world over/It’s the poor what gets the blame/while the rich gets all the pleasure/now ain’t that a blinkin’ shame.

We were reminded of it after reading a recent dispatch from India, (Jason Overdorf, India Proposes New Bill for Eminent Domain, Global Post, September 7, 2011 — click here). New legislation has been proposed in the Indian parliament, intended to improve the lot of Indian rural condemnees. According to the Times of India the proposed law requires that after transfer of the taken land by its developers within 10 years from the date of acquisition, the development company would have to pay the condemnees 20% of the land’s appreciated value. (Prabhakar Sinha, Builders Call Land Acquisition Bill Anti-Development, Times of India, September 7, 2011 — click here ). Interestingly, that approach is reminiscent of a point raised by Justice Kennedy during the Kelo oral argument, where he wondered if sharing the appreciated post-condemnation value with the condemnees might be desirable. Of course, Kelo involved only the right to take and did not deal with compensation so the point was academic. Still, it’s an intriguing idea.

Another provision in the proposed Indian law would require that 20% of the redeveloped land be reserved for its former owners as a form of their economic rehabilitation. India faces a special problem in that regard. Indian farmers tend to be very poor, their farms very small, and their families very large. As a result, the compensation they receive for their land is insufficient for replacement of the farm, and the displaced farmers lack modern skills that would enable them to find other employment.

As you can imagine, Indian redevelopers are up in arms and are strongly opposing the proposed law that at the moment is not going anywhere. However, the plight of rural condemnees in India is not something that can be ignored. As the Global Post reports, these rural condemnees have little power to fight back legally when their farms are taken, with the result that reactions to rural land takings are “one of the the most popular recruiting tools for Maoist rebels waging an insurgency across the tribal regions of central India.” So maybe the Maoist comrades are all for expropriating the property of others, but when it comes to their own land you better watch out.

That this can be serious stuff may be seen from the fact that Tata Motors, the Indian automobile manufacturting giant (that owns Jaguar) was forced to scrap its plans for land acquisition for a major new automobile factory, when they met with violent resistance in Singur, West Bengal.