Wednesday, August 10, 2011
Managing government land allotments
I have an op-ed in Mint today which advocates an alternative strategy to manage land allotments by selling it at market price (not the basic registration value) to the investor, escrowing the proceeds, and then reimbursing a share of it once the investor complies with his contractual obligations.
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2 comments:
One cannot disagree with the idea that every discretionary allottment of government land
should be promote public welfare in a big way.
The issue that arises is the basis on which such welfare be identified and the agency
through which the same needs to be identified.
As suggested, we need to increase the rigour with with which such public purpose be identified .
We also need to put in place a credible mechanism to determine the achievement of the same.
One cannot dispute the fact that a lot of good has come of many such discretionary allotments
and hence i feel that we cannot totally do away with such a mechanism.
The elected governments need to make discretionary calls unlike the bureaucracy and we cannot
expect reasonable growth unless such decision making power is vested.
I feel that We cannot tie ourselves down only to rules and corruption needs to handled in a
different way rather than by constraining decision making.
Further, we also need to leave space for honest failures. In the back ended subsidy we cannot
expect any bureaucracy to return money on count of such failure as it would have the
element of discretion.
Who will judge 'honest' versus 'dishonest' failures. Clearly the policies and decision making in India, in most cases, is being driven at the behest of vested interests. Land allotment for industries and SEZs can be made rationally by taking into account the employment generating potential and their contribution to the local economies. Cost-benefit analysis can be very useful in deciding which companies can be alloted how much land and at what price. In Andhra Pradesh, you will see that a lot of companies that benefited by land allotments during last five years haven't even started any of the operations and have clearly violated all the set conditions. The recent Emmar scam is a textbook case of how a bunch of politicians, bureaucrats, and corporates can coalesce and gobble up the real estate in the garb of urban infrastructure development.
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