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Modi's PSU Land Use Formula for Industrialization

Monday, May 25, 2015

While the ordinance on the land acquisition bill has been referred to a Joint Committee, according to the media, the government plans to use the large land reserves (250,000 acres) available with central PSUs (Public Sector Units), mainly financially troubled ones, for industrial and infrastructure projects.

Some of the land with the PSUs is leased from the state governments, not directly owned, while some is encroached on. The location of the surplus land will need to match with the requirement of the projects.
Healthy PSUs giving up land for the private sector could lead to protests from employees and opposition parties.

Apparently, the government is also planning to use this land for plug and play projects (all the clearances in place before the award), which as we pointed out in our budget note (see F16e India Budget: Visible Infra
Focus dated March 1, 2015) could be a game-changer. If the PSUs involved are already financially troubled companies, the impact of taking away unutilized land will be insignificant, reducing the risk of opposition from any stakeholders.

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