Since its independence, India has used a powerful and often controversial tool to attract investment: granting vast tracts of land to private companies for a symbolic sum of one rupee. This practice is not an anomaly but a recurring feature of industrial policy used by governments across the political spectrum.
The core idea is simple: lure major corporations with virtually free land, and in return, the state gets massive investment, industrial infrastructure, and job creation. However, these deals frequently ignite debates over fairness, transparency, and the true cost to the public.
The Foundation: State-Led Growth Era
In the decades after 1947, under Prime Ministers like Jawaharlal Nehru and Indira Gandhi, the focus was on public sector growth. While direct one-rupee deals to private firms were less common, the government established a framework for industrialization.
The Industrial Policy Resolutions of 1948 and 1956 empowered the state to acquire land for development. State Industrial Development Corporations (SIDCs) offered this land to industries at heavily subsidized rates, laying the groundwork for future concessional allotments.
Liberalization’s Land Rush: A New Dawn
The economic liberalization of 1991 under Prime Minister P.V. Narasimha Rao marked a pivotal shift. With the economy opening up, state governments began competing fiercely to attract private and foreign investment, and land became their primary bargaining chip.
This era saw the rise of the IT sector, with states offering prime land to tech giants at nominal rates to establish Software Technology Parks. This strategy was critical in building India’s IT hubs in cities like Bengaluru, Hyderabad, and Pune.
SEZs and the Decade of Controversy
The 2000s, under the governments of Atal Bihari Vajpayee and Manmohan Singh, saw the introduction of the Special Economic Zones (SEZ) Act of 2005. This policy supercharged the process of allocating land for industrial enclaves.
One of the most high-profile cases was the land leased to Tata Motors for its Nano plant in Singur, West Bengal, at a highly concessional rate. The deal led to widespread protests and highlighted the intense conflict between industrial ambition and farmers’ rights, a theme that would define many such allocations.
‘Make in India’ and Mega Deals
The current era, focused on the ‘Make in India’ initiative under Prime Minister Narendra Modi, has seen a continuation of this policy with several high-profile one-rupee land deals.
- The Adani Group recently received over 1,000 acres in Bihar for an annual lease of one rupee to build a power plant.
- IT major Cognizant was allocated 50 acres in Andhra Pradesh for the same symbolic amount to boost the state’s IT infrastructure.
These decisions underscore that providing land at a nominal cost remains a preferred tool for state governments to attract multi-billion dollar investments. While these deals promise development, they consistently raise tough questions about transparency and public interest.
