Saturday, October 20, 2007

Where does public good start?

An interesting news item appeared in the Pune edition of the Times of India on October 18 about a recent Supreme Court ruling that when the state attempts to acquire land, it has to make a clear distinction between whether the intended use of the land is for a public purpose or for a private company.

The context is, as anyone can guess, the increasing attempts by states to obtain large parcels of land for industrial use or setting up SEZs, though it is not clear which particular acquisition was the motivation for the ruling. Strangely, I failed to find the article on the Times website, or reference to this judgment in any other newspapers, so let me reproduce extracts from the news item:
According to the ruling, "The state is obligated to issue a notification clearly stating whether the acquisition is for a public purpose or for a company." Further, the ruling clarifies that a notification "cannot espouse both purposes simultaneously."
I find this issue intriguing. Where do you draw the line between private enterprise and public good? Are all state undertakings necessarily for the public good, and private undertakings otherwise? If a private company gets into a BOT contract with the state to build a highway and operate it, is that highway for public good or private profit? Why cannot both goals be espoused simultaneously?

In the years following Liberalisation, creation of capital and employment in the private sector has been growing far more rapidly than in the public sector, and there is plenty of reason to believe that the market will play an increasing role in shaping the economy in the foreseeable future. It looks like this is high time for for arbiters of laws and the constitution to put their heads together and redefine what constitutes the public good.

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