Farmers must get choice to take call on land: Mah Lifespace

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New recommendations or requirements are coming in from the national advisory council (NAC) on amendments to land acquisitions act or bill. The latest news is that the NAC wants buyers to pay six times registered price of the land for stamp duty purposes to farmers.

Arun Nanda, Chairman of Mahindra Lifespace had bought land for SEZ of the Mahindra Group itself. In an interview with CNBC-TV18's Latha Venkatesh and Anuj Singhal, Nanda gave his views on the latest news from NAC.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: How fair does the latest news sound? Does that sound steep?

A: We have always believed that the farmers have to get a fair deal because one needs to get contiguous lands. If you don't get a fair deal, you don't get contiguous land.

Moreover, if you are doing something in a particular area, you want the good of the local people. The fair deal to the farmer is given and nobody will grudge it. The six times assumes that people pay cash for land and their consideration is not fully disclosed.

There are people, who pay in two currencies, but there are also organised sector players and companies like Mahindra pay the fair price. This fair price to the farmers is not necessarily the six time. There are ways to deal with it.

Q: If you don't take the registered price for stamp duty, what other benchmark can you take?

A: There are two ways to look at it. You can have an agency which values the land and then say that don't go by registered price. The government will notify the price for it.

The thing that has worked for me is in Jaipur where we as a policy don't take land which is in the irrigation or cultivation. It was a barren land which we acquired and gave 25% of the land to the farmers after development.

The development cost was to our account and the farmer who had nothing growing on that place has a buzzing industrial integrated township coming up. He gets 25% of the land which is not the profit. When somebody buys for X and sells for 4X, the 3X is not profit.

First of all, you only get 60-65% of the land to sell. So, when the farmer gets 25%, it is equivalent to 37.5% of the undeveloped. Then, there is a cost of development because of all the benefits around like water, power, road, fire station, police station, school, etc.

There might be a better way to go for rather than saying that we share the profit with the farmer. We must provide employment to the local people.

Q: Is this an option for the farmers who want to participate in this in terms of profit sharing where you pay them part upfront and let it be on them to take part of the profits going forward in next say five-ten years? Should that choice be left to the farmers?

A: In Maharashtra, MIDC has a rule that the farmer has an option to take 15% of the developed land, whereas we gave 25% in Jaipur. There is a second option to that where you give farmers an option to tell the fair price.

If they don't want it, they can take X percentage of developed land, which they can sell at market prices later on and can make money out of it.

Q: What about this compulsion where anything above 400 households should be done through the state and if only 400 households or fewer are disturbed, it can be done privately by India Inc or the corporate concerned?

A: As a policy for our three projects, we have always has state as a minority partner because you need the state governments support for infrastructure. You need to get connectivity of all the services. We would not have got Deutsche Bank to put up their offshore processing centre in Jaipur.

If the state government didn't give assurance to Deutsche Bank that we will provide services, we would not have got BMW in Mahindra World City, Chennai. So as a policy, we do it together and I don't have an objection on that issue at all.

Q: What about the other item, those who are not using the land, but are living of it, should be given the ten times their minimum wages. Wouldn't that be too tall to ask for?

A: An organised sector has a pay structure. I don't think you can do one size fit all. We cannot apply the same yardstick to remote part of Nagpur district or Nashik or Pune.

Q: Basically, will the objection be that it should be customised and a national rule will not work?

A: You can't do one size fit all.

Q: Where does this land acquisition act finally end? The idea was if there is a ground rule, then perhaps you will not have political sharks jumping into every act and converting it into a political advantage as you are playing by the rules.

A: If we go back in history, agriculture was only the main stay of everybody. We have moved a long way. If the Indian economy has to grow at 8-10%, then the industrial sector has to grow at least in double digits.

It is good to have land, otherwise it becomes a political issue. We have seen every party jumping on it in different states whether they are in opposition or in power. A rule is good, but it shouldn't be a one size fit all.

This is why my percentage basis works better because you are not getting into an absolute number. We should give an option to the farmer that if you take X lakh per acre or 25% of land, he can take a call on what he wants to do.