Amid controversy over land acquisition by the Tatas for their Rs 1-lakh car 'Nano' project in Singur, industry body Assocham today said states should not directly interfere with land acquisition process and that the job should be left entirely to manufacturers.

Releasing a report on manufacturing sector in India, Venugopal Dhoot, promoter of Videocon [Get Quote] and past president of Assocham, said state governments should restrict their roles only to infrastructure-related issues and manufacturers should themselves talk to farmers on land acquisitions.

"State governments should not interfere in land acquisiton...manufacturers should talk to farmers to acquire land. State government should though give fiscal benefits, subsidies, etc... We have learned a hard lesson now," Dhoot said.

He said the formula of employment, equity and money should be used to compensate farmers and if they wanted land for land, they should be given that. They should be compensated for land on the prevailing market price, he added.

Further, advocating the industrialisation of states, Assocham Secretary General D S Rawat said, according to an Assocham study, West Bengal received over Rs 3,26,000-crore (Rs 3,260 billion) investment in 15 months and 1,50,000 people got direct employment.

Dhoot said the compensation packages offered by industrial houses should be attractive enough to ensure that there is no discontent among farmers.