The Centre’s plan to identify surplus land held by government departments and public sector undertakings with a view to auctioning such land to the private sector, or deploying it for urban renewal projects, is noteworthy. This also appears to be in sync with the Budget promise to encourage public sector firms to divest individual assets and re-invest the proceeds in new projects. A committee has been tasked with creating an inventory of public landholdings and identifying plots that are not needed for future expansion or strategic purposes, and thus could be alienated for other uses. As past strategic disinvestment cases have shown, valuation of land is a prickly issue that leaves governments susceptible to extreme scrutiny from political peers as well as the auditor. In addition, it can take years to conclude. For example, the Tata Group bought a stake in VSNL in 2002, but the government could only put a number on the value of its extensive surplus landholdings by 2011. To that extent, the Budget’s promise to divest specific assets (such as land) of public sector firms — through the auction route with total transparency, it is to be hoped — seems pragmatic. More so since the Modi government has chosen to refrain from any lock, stock and barrel privatisation of PSUs.
However, this approach also reflects a lack of institutional memory in the government. Five years ago, a scam-hit UPA government had set up the Committee on Allocation of Natural Resources to suggest transparent mechanisms that would eliminate discretionary powers in such allocations. It had determined not just how much land was under the domain of Central government departments, but also how much was under encroachment. Of the 16 lakh acres of defence land outside the cantonments, 11,000 acres had been encroached upon. Every department told the panel it had no land to spare that could be considered surplus. The committee had mooted creating a depository of all government/public sector land with satellite mapping done to indicate actual usage, which it is hoped the new panel will also do. Other recommendations are also pertinent: land transactions should be on an outright sale basis with the optimal land use being approved before the sale, via e-auction. It must also be kept in mind that this exercise is a minor recompense for the larger reform agenda that the government has set aside: amending the land acquisition law. A model tenancy law that the NITI Aayog has mooted as an alternative reform step to allow the leasing of agricultural land, also remains a work in progress. The government needs to put more energy into those solutions for faster economic growth.
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