India's land mess

India is open for business - that's the message Indian Prime Minister Narendra Modi is busy selling investors abroad. But back home, his promises to dismantle barriers to India's economic growth are facing a major challenge.

Modi's amendments to a bill to make it simpler to obtain land for what his government deems important development projects have run into a wall of protest from farmers' unions, opposition lawmakers and civil society groups. On Sunday, the vice president of the opposition Congress Party, Rahul Gandhi, is to lead a farmers' rally in Delhi to protest changes to the Land Acquisition Act 2013, which the party says are anti-farmer and favors private corporations.

Such standoffs over land have bedeviled India's development for years. "Land acquisition is the single biggest hurdle to infrastructure development," Niranjan Sahoo, a public policy analyst at the Delhi-based Observer Research Foundation, an independent think tank, says. "In recent years, private companies have stopped trying to acquire land because of the red tape, high costs and lengthy timeframes involved - it can take anything from three to five years. Everything has stalled."

India's economy and crumbling infrastructure are paying a heavy price. A 2013 report by Delhi-based ratings agency ICRA said #link:http://www.icra.in/Files/ticker/new%20land%20acquisition%20bill.pdf:eight of 20 major projects#, including roads, coal mines and steel mills worth more than 1 trillion rupees ($16.4 billion), were shelved in 2011 and 2012 because of the failure to acquire land.

Past abuses over land acquisition

So, why does land acquisition remain so problematic in India? Many say the current impasse has its roots in past land abuses. Since independence in 1947, India's government largely used colonial-era laws for a massive state-led drive to industrialize and urbanize, forcing owners to sell land if it was considered to be in the public interest.

Over the years, experts say, that led to clashes between farmers and government officials, fueling violent insurgencies in some mineral-rich states and the emergence of a well-organized civil society-led movement protesting controversial dam projects, the takeover of farmland for factories, ports and highways and the setting up of special tax-free economic zones.

"Involuntary and, in some cases, violent land acquisition was widespread," Sahoo says. "Often, the affected landowners were given little or no compensation and many lost their land and livelihoods and were displaced."

The unrest prompted the previous government, led by the Congress Party, to pass a new land act in 2013. It requires projects carried out by private companies to have the consent of at least 70 percent of farmers in an area before their land can be bought to build power stations, ports or other infrastructure. Social impact assessments involving public hearings and resettlement and rehabilitation packages are also required.

No faith in the government?

In December last year, Modi's business-friendly government passed an executive order removing the "informed consent" and "social impact assessment" requirements for projects relating to defense and national security, infrastructure and industrial corridors that would encourage more trade between major cities. Modi's Bharatiya Janata Party (BJP) argues this will speed up acquisition time, free up billions of dollars in industry investments and eventually help many farmers out of poverty.

But opposition parties are unimpressed. The showdown over the proposed changes is also in part because many farmers do not trust the government.

"We are convinced that the government has a hidden agenda to hand over farmland to private corporations," Kishore Tiwari, who heads farmers' rights group Vidharbha Jan Andolan Samiti in a drought-hit region in the state of Maharashtra, says. "We plan to fight tooth and nail against the changes to the land bill."

Political posturing

Analysts say there is also a political angle to the increasingly polarized debate, with the opposition Congress Party struggling to stay relevant after a humiliating defeat to Modi's BJP in last year's general election.

"There is little doubt that the Congress is fighting to stay alive," Sanjoy Chakravorty, a professor of geography and urban studies at Temple University in the US, says of the party's support for India's estimated 800 million rural citizens. "You can never go wrong by claiming to be pro-farmer in India."

After pushing through the bill in the lower house of parliament, Prime Minister Modi now faces a vote over the legislation in the upper house, where his BJP is in the minority.

One law, many realities

Notwithstanding Modi's proposed amendments, Chakravorty, who wrote the book "The Price of Land: Acquisition, Conflict, Consequence," says the bill ignores India's broader realities - the country neither has a homogenous farming community nor a single land market.

At one end of the spectrum, prices of land are skyrocketing in once sleepy farming villages located near urban centers across the country, making some farmers rich beyond their wildest dreams; on the other, some farmers, especially poor indigenous people, struggle to make a living from their land and are prey to a range of corrupt practices and local land mafias.

"You simply cannot have a blanket land law given India's geographical, economic and cultural diversity, specific local land cultures and fragmentation of land holdings," Chakravorty says. "It's a terrible idea."