The reconciliation of land rights and development is now becoming a hot political issue. The unrest that we have seen recently in West Bengal in Nandigram against the land acquisition for an SEZ and in Singur against the acquisition for the Tata Motors project are an indication of what we can expect for the ambitious programme of SEZ and mega-project developments that are being planned.

The finance minister has responded by asking industrialists to avoid acquiring cultivable lands. Cultivable and uncultivable lands exist side by side wherever there is a settled population.

The only large stretches of uncultivable land that would be available would be in reserved forests, which, in any case, are out of bounds, or in remote desert and mountain areas quite unsuitable for SEZs, urban expansion or mega projects. Hence the finance minister's injunction is a non-starter.

Even so-called wastelands in settled areas are used by local people for firewood or grazing or fodder. Other non-cultivable lands have important ecological support functions particularly for water management.

The central issue that has to be addressed is not the encroachment on land for agriculture but displacement of people. The numbers displaced by development projects in post-independence India are not known because the government has nor released any reliable figures on this. Informed estimates put the number at 40-50 million.

Almost all of these people are involuntary displacees. That is because we have relied for far too long on the Land Acquisition Act of 1894, which allows the government to exercise the right of eminent domain for compulsorily acquiring private lands for a public purpose.

There are problems with the process and the rules about compensation under the Act. These difficulties can be fixed. The real problem, however, is the purposes for which the Act has been used. The Act is silent on what constitutes public purpose and has been used to acquire land for commercial projects on the argument that there would be some collateral generation of public benefit like food security or employment or self-reliance.

We need a clearer definition of public purpose if the Act continues to be used for commercial or private projects. The Act has been misused and this has to stop.

We do not accept this order of compulsion for other factors of production. In the case of labour, we only accept the legitimacy of conscription in a narrowly defined class of emergency situations like a war threat or a natural disaster.

Beyond these few cases we would not use the excuse of public purpose to justify press-ganging people to work on terms determined by some public authority. And surely we would reject it altogether for any commercial venture. Then why do we continue to accept it for land?

There are many in the industry who accept that the use of the state's right of eminent domain will not work. They recognise that in today's India this is a recipe for court battles and agitations. This was the sentiment expressed in the recent FICCI (Federation of Indian Chambers of Commerce and Industry) meeting. Hence they argue for a direct deal between the individual landowners and the corporate buyer and this is what is happening with many of the SEZs.

This argument for the use of market forces may sound appealing to many. But the land acquisition transaction between a large corporation, on the one hand, and a host of mostly small landholders, on the other, is an unequal negotiation. To rely on market forces alone is not enough.

Large-scale land acquisition for development will involve acquiring settled lands with long-established rights. It will disrupt the life of some functioning community and of all who live in it, not just the landowners. In fact the ones worst affected will be the share-croppers and labourers, the petty traders and service providers. These landless ones do not even have a juridical basis for compensation if the transaction is seen simply as a sale of land, voluntary or compulsory.

The community must be made a part of the development for which its members are being asked to sell or surrender their land and livelihood. This is in the interests of the developers and can be done in many different ways.

There is an example near Pune in the development of Magarpatta, where the landowners themselves got together and planned a development model that is becoming a major township. In other cases one can envisage the corporate buyer assigning equity in the project or paying for the transfer of development rights.

Large-scale land acquisition, which affects a whole village or more has to be treated as a transaction between the corporate or public buyer and the community, and not just as a transaction with individual landowners. That is the only way we can take into account the interests of those who lose not land but livelihood. It will also allow the community to assert its interest in common properties and heritage, which would be lost in a set of individualised transactions.

How can a role for the community be created in a commercial transaction? In the case of labour, we recognise that the transaction between the employer and the individual worker can be modulated through collective bargaining. Hence workers can organise in a group and negotiate the terms of their employment. Can we not accept such a concept of collective bargaining for land acquisition?

What we need is a Land Purchase Act that would apply to any large-scale purchase of land by a commercial entity. The Act must specify a process for negotiation between the buyer and the affected community including a procedure for determining who can speak for and negotiate on behalf of the affected community.

It must strike a balance between community and individual land rights, for instance, by specifying the minimum proportion of right-holders who have to assent to the terms negotiated. It must include an obligation to provide alternatives to those whose livelihoods are lost.