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Valuing Land


Arindam Banerjee

THE PRICE OF LAND: ACQUISITION, CONFLICT, CONSEQUENCE
By Sanjoy Chakravorty
Oxford University Press, New Delhi, 2013, pp. 304, Rs. 825.00

VOLUME XXXVIII NUMBER 9 September 2014

The book under review is an attempt to look at the issue of land acquisition in India merging social realities with a neo-classical utilitarian and market analysis of land prices and their relationship with conflicts and exclusion. It incorporates the social and historical contexts in explaining the factors behind escalated conflicts that have accompanied land takings in recent times in the country. The author discusses how the value of land is determined, which provides useful insights into the various lines of contention regarding land-use and its conversion.   Land acquisition has undoubtedly been the most awkward question that is facing the current development trajectory of industrialization and rapid urbanization in India, not to mention that similar challenges are faced by other growing developing economies. In fact, the question of land today is not uni-dimensional but has multiple facets of asset inequality, livelihoods and employment, displacement and exclusion, contending paths of development, etc. Each of these questions is intricately linked to each other and a wholesome view of the issue is therefore imperative.   The first important point that the author makes regarding the high land and property prices in India, particularly in urban areas is to dispel the notion of a bubble in these markets. He argues that India is now in an irreversible regime of high land and housing prices. This is so due to rising economic activity post 2000 accompanied by the expansion of the domestic housing credit market, and a surge in the inflow of ‘black’ money and NRI funds into the real estate market in the liberalized Indian economy.   The connected important proposition that is put forward is the ubiquitous linkage between rapidly rising inequality and soaring land or space prices in urban India. Extreme economic inequality that has emerged with the Indian growth story implies that a small number of consumers pay excessively high prices for prime urban land, or more accurately ‘spaces’, driving up the prices for the rest. The consequent ousting of most urban residents from the land and house markets due to unaffordability essentially means that the majority starts living on high rents without much hope of ever-owning a residence; insightful calculations by the author reveal that one needs to work, earning the average income, for 580 and 180 years in Mumbai and New Delhi respectively (many times more than in developed countries), in order to buy an apartment! The high rents are effectively a tax imposed ...


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