If India has to grow by 10% plus on a sustainable basis, there has to be considerable development in the country's infrastructure and industry. This also requires substantial long term foreign capital. Thus making foreign direct investments (FDIs) all the more important. But the challenges for this capital to keep pouring in are immense. And one such challenge is land acquisition.
Take the POSCO project in Orissa for example. The state government has been ordered to stop buying land for South Korean steelmaker POSCO's proposed plant. It must be noted that five years ago POSCO signed an initial pact with the Orissa state government to build a plant with a capacity of 12 m tonnes a year at an investment of more than US$ 10 bn. This has now hit a roadblock due to tough forest laws and stiff opposition from the local people. These issues are not new. They have hampered several projects in the past. One needs to look no further than the Tata Nano fiasco in Singur, West Bengal for evidence of this. Thus, the government will have to ensure that problems such as these do not get out of hand lest FDIs begin to slowdown or halt in the future.
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