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The Question of Land and Infrastructure Development in India: Urgently Required Reforms for Fairness and Infrastructural Development

Indian Institute of Management Working Paper No. 2010-03-02

23 Pages Posted: 7 Feb 2011  

Sebastian Morris

Indian Institute of Management, Ahmedabad - Economics

Ajay Pandey

Indian Institute of Management (IIM), Ahmedabad

Date Written: March 2, 2010

Abstract

Land in India is problematic largely because of archaic and perverse provisions in the practice and the law. The new Land Acquisition Amendment Bill does go some way to correct the anti-democratic and imperial provisions of the old 1894 Act. Other regulatory restraints stand in the way of fair compensation to sellers whether the deal is a sale or an acquisition using eminent domain. Urban planning being based on the "Ricardian Model" and on top of asymmetrically applied regulatory constraints further depresses the benefit to land owners. As a result very little land is obtainable without dispute and high risk for infrastructure development. In this paper we provide an analytical critique of the law and restrictions as also of the framework of urban planning and provide a justification for why major change is required in the approach to land markets, land acquisition and urban planning. We also provide the key elements of a reformed approach that can create a win-win framework for development. We also present our suggestions on how the proposed Amendment to the Land Acquisition Act can be changed to make the Act functional and remove the residual perversities therein.

Keywords: Land, India, Eminent-domain, Acqusition, Valuation, Law, Real-Estate, Government, Rent, Distortion

JEL Classification: R1, Q0, K2, K4, H4

Suggested Citation

Morris, Sebastian and Pandey, Ajay, The Question of Land and Infrastructure Development in India: Urgently Required Reforms for Fairness and Infrastructural Development (March 2, 2010). Indian Institute of Management Working Paper No. 2010-03-02. Available at SSRN: https://ssrn.com/abstract=1755485 or http://dx.doi.org/10.2139/ssrn.1755485

Sebastian Morris (Contact Author)

Indian Institute of Management, Ahmedabad - Economics ( email )

Vastrapur
Ahmedabad 380015, GA Gujarat
India

Ajay Pandey

Indian Institute of Management (IIM), Ahmedabad ( email )

Vastrapur
Ahmedabad 380015, GA Gujarat
India
66324879 (Phone)

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