Land banks to help economy post lockdown could threaten poor communities

  • Creation of land banks to attract investment is among the many measures Indian authorities have announced to battle economic stress and revive the economy post COVID-19.
  • However, those working on land right issues highlight that land banks often end up in conflict and then in courts, defeating the purpose for which they were created.
  • Those working with tribal communities also highlight that the COVID-19 related economic stimulus package announced by the central government does not have much to offer for the tribal people and forest dwellers facing difficulties due to the lockdown.

With governments looking to attract investment and jump-start the economy that has taken a beating due to COVID-19, land banks are once again in the limelight, but pursuing the idea may threaten resources of poor and vulnerable communities.

Earlier this month, a news report highlighted that Indian authorities have identified land parcels across the country and are developing a land pool to woo companies moving out of China after the pandemic that originated in the country. The land parcels identified by the authorities are spread across the country in states such as Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh. Subsequently, Uttar Pradesh’s Chief Minister Yogi Adityanath asked the UP government officials to create land banks to attract industries and investment. 

But such moves by authorities across the country can pose difficulties. Pranab Ranjan Choudhury, who is the convener of the Centre for Land Governance, a non-government organisation working on land issues, explained that in an atmosphere where states are competing to attract both foreign and domestic investment in industries, land banks evolved as “bypass-institutional measures” and “smart instruments” to make land expeditiously and adequately available, as part of ease of doing business. 

“To do so, it strategically avoids legal bottlenecks of acquiring land that demands following legitimate procedures. That the government land constitutes a substantial quantity of land available with most of the state which can be made legally available to industries at ease, has led to the establishment of such land banks by the states,” Choudhury said.

A land bank includes large tracts of land kept under the control of governments or private organisations for future development.

In India, where land is at a premium, acquiring land is complex and if government-owned firms or private organisations fail to acquire the land due to conflicts, high-worth projects get shelved. In such a scenario, land banks have emerged as an important tool to attract industry and investment because most land parcels (in the land banks) already have most of the required clearances. This facilitates smooth set up of industrial projects without delay and bureaucratic procedures.

Choudhury explained to Mongabay-India that land banks pose three critical challenges that transform this supposedly tactical innovation by the state, often into a fiasco. “Designed to provide land at ease to the businesses, it results into difficult and perennial land conflicts, often delaying or stalling investment, defeating the very purpose it meant to address.” Land conflicts, common in India, occur when various stakeholders differ over the control of land and its use.

Stressing that availability of “computerised land records and digitised cadastral maps (map showing land ownership and may include information on land use) through digital land records modernisation program makes it easier to identify government land availability in clusters suitable for industrialisation”, he said the “conflicts come thick and fast, as the de jure records that the bank show and de facto uses that is on the ground, often don’t match.”  

The Gosekhurd Project (dam) in Maharashtra. Land banks can be used for setting up industrial projects like a dam. Photo by Kailash Mohankar/Wikimedia Commons.

Government agencies and think tanks have been encouraging land banks. In 2018, NITI Aayog, the central government’s think tank, had advocated for the creation of land banks by states to ensure ease of business and encourage industry.

E.A.S. Sarma, a former secretary to the government of India said that “land bank idea is not a prudent one for the states to pursue.”

He emphasised that many states have already displaced marginal workers by forcibly acquiring their lands under the guise of “public purpose” and formed land banks. 

“Usually land from such a land bank would have been acquired forcibly from small farmers at a nominal value, provided under the draconian land acquisition laws. But, when that land is given to industry, the latter raises thousands of crores of rupees of loans from the financial institutions at the prevailing market rates. In other words, through the land bank vehicle, the states are passing on huge unearned benefits to the industry, which finally get reflected as profits in their balance sheets. It indirectly amounts to exploiting the marginal farmers to benefit influential industry promoters. The social benefit of such an industry is usually small or even negative,” Sarma told Mongabay-India.

The former secretary said that land is becoming an increasingly scarce commodity in India and the per capita availability is declining fast.

“On the other hand, there are millions of landless agricultural workers who are cultivating marginal bits of government land for decades and what they urgently need is an ownership right. If they can be given that right, they will get access to credit and other facilities and their contribution to the economy can be far greater than what industry can offer,” Sarma said.

Land banks could lead to conflicts

The idea of land banks in India began taking shape 20-30 years ago. Earlier this year, a report released by the Land Conflict Watch (LCW), a New Delhi-based research group, revealed that, on average, at least 10,600 people are impacted by each ongoing land conflict in India. It said that investments worth about Rs 13.7 trillion (Rs 13.7 lakh crore) were found embroiled in 335 of the 703 ongoing land conflicts in the country. 

It highlighted that up to 2.68 million (26.8 lakh) hectares of land has been set aside for land banks in eight states – Andhra Pradesh, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu, and Uttar Pradesh. Many of the states in the country are either in the process of creating land banks or already have them.

The report had said that land banks act as a bypass mechanism to deny the rights of (tribal and other) communities and cautioned that there is a potential risk of future investments on banked lands facing conflicts similar to those that prevented the previously planned projects.

The report further said that in many cases, common lands over which communities had traditional rights have been set aside as part of land banks and once that is done it becomes even more difficult for communities to claim rights over it under laws such as the Forest Rights Act (FRA). 

Madhu Sarin of the Campaign for Survival and Dignity, a national platform of forest dwellers groups, too said that most land banks target these common lands and in that process, they end “hurting those people who are most dependent on common land.”

“Once that is done, the communities dependent on such land for cultivation, for grazing of their animals or for non-timber forest produce are left to fend for themselves. More often than not they end up in courts as well. The whole scenario becomes a big mess,” Sarin told Mongabay-India.

Pranab Ranjan Choudhury echoed Sarin’s views as he said the land use and ownership shown in the land bank often remain far from the reality on the ground.  “That a particular parcel recorded as government land is also used by different members of the community for different purposes (viz. path, grazing, collection of forest produces etc.) under different tenures (viz. access, use, management etc.) over different times (viz. monsoon, winter etc.) is hardly documented in land records. This not being reflected in the land bank translates to conflicts when the industry takes over the possession assuming limited or no users and dependence.

In addition to the common lands ending up in land banks, sometimes land involved in projects that get cancelled is included by states in the land bank. If a land remains unused for five years (after it is acquired), land once acquired for a project can either be returned to the original owner or be included in states’ land banks under the provisions of the Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR Act). But in most cases it is included in land banks by the states.

Read more: Land banks could deny land communities rights over land, says report

Indian businesses to consider their human rights impact under proposed plan

Economic package fails to address concerns of forest dwellers 

Following the COVID-19 pandemic and the lockdown to contain it which brought the economy to a halt, the Indian government has announced a stimulus package of Rs. 20 trillion (Rs.20 lakh crore) to support the economy. Though the government has not announced any specific proposal regarding land banks in that stimulus, it announced that Rs. 60 billion (Rs 6,000 crore) of funds under the Compensatory Afforestation Management & Planning Authority (CAMPA) will be used for afforestation and plantation works, including in urban areas, artificial regeneration, assisted natural regeneration, forest management, soil and moisture conservation works, forest protection, forest and wildlife-related infrastructure development, wildlife protection and management etc. 

The government said that it will grant immediate approval to these plans amounting as this will create job opportunities in urban, semi-urban and rural areas and also for tribal people. 

The ‘common land’, over which traditional communities have rights and used by them for many purposes like grazing, in many cases is diverted for land banks by authorities. Photo by Akshaymogha/Wikimedia Commons.

However, the announcement has angered the groups working with forest dwellers and tribal communities. 

“The announcement on releasing of CAMPA funds to the states is unlikely to benefit tribal communities as the funds will be transferred to the forest department but not to the tribal communities as the CAF (Compensatory Afforestation) act makes no such provision for transferring funds to the gram sabhas (village councils) despite demands by tribal organisations and forest rights campaign groups,” Tushar Dash, an independent researcher on forest rights, told Mongabay-India. 

He said that CAMPA plantations (mostly monocultures) have led to large scale violation of land and forest rights of tribal communities, ecological destruction and land conflicts which are likely to intensify with the transfer of CAMPA funds to the forest depts. 

“The environment ministry’s proposal for the creation of land banks for compensatory afforestation plantations have led to the identification and use of land banks in tribal areas consisting mostly of land used for cultivation and community forest lands. Creation of these land banks in tribal areas violate the FRA Act, Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 (PESA) and constitutional rights of tribal people and create scope for land grabs,” Dash said. 

On May 15, an official statement from a group of organisations and researchers working for rights of forest dwellers and tribal communities said that “the economic relief package announced by the Prime Minister and Finance Minister fails utterly to address the economic distress of tribal and other forest communities due to the COVID-19 outbreak and the unplanned lockdown measures.”

Earlier this month, a group of civil society organisations, activists, researchers and experts working with tribal communities and forest-dwelling communities had submitted a report to the Union Ministry of Tribal Affairs (MoTA) highlighting the socio-economic distress situation in tribal areas arising out of COVID-19 outbreak and lockdown measures.


Banner image: A lot of times forests are also included in the land banks created by governments. Photo by Nabatizer/Wikimedia Commons.

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