‘Government has to be involved in promoting development'

While the Trinamool Congress-led government has repeatedly stated that it shall not acquire land for the purpose of industry in West Bengal, Nobel laureate Joseph Stiglitz argued here on Wednesday against the policy of leaving the purchase of land entirely up to market forces.

When asked to comment on the State government's stand, Professor Stiglitz pointed out that when a large piece of land with diverse ownership is to be purchased for industry, a situation may arise when a few persons may refuse to sell, demanding escalated prices.

“Economists call it the hold up problem…When there are large pieces of land owned by one person, somebody can buy that land. But if the land is fragmented, then a person can hold out in the middle of that piece of land and say ‘I will not sell it to you.' You have bought all the other land and if you want to buy this land, you will have to pay me a lot. And that makes land purchase very difficult,” said Professor Stiglitz, who is a member of the faculty of the Columbia University.

Stating that this is an “issue” in most countries in the world, he cited an instance when land was required for the expansion of the Columbia University. Authorities found it difficult to purchase certain areas and approached the government. Eventually the University, which is not a government university, did succeed in using the Right to Eminent Domain, he said.

“The government has to be involved in promoting development,” he said, adding that issues such as fertility of the land, adequate compensation and the sentiments of the people must also be kept in mind.

He was speaking to journalists on the sidelines of a workshop organised by the Indian Statistical Institute, where he delivered the keynote address on “Learning for a New Economy: Insights for the Developing World.”

Professor Stiglitz advocated that the government should play an important role in managing the economy as markets by themselves are not efficient in distribution of resources.

“India has been pursuing a balanced policy,” he said, adding a word of caution against developing an overblown financial sector.