India must industrialise to realise its destiny but such efforts should not come at the expense of the nation's farmers, Prime Minister Manmohan Singh said late on Saturday.

Farmers should be appropriately compensated when their land is acquired for setting up industries, Singh said when asked to comment on the Nano controversy.

Singh said India needs to be industrialised to find solutions facing the nation. "Let me say that India needs to industrialise, without industrialisation we cannot find solutions to our employment or development problems.

"The real issue is what are the terms on which the land is acquired. It should not be acquired at prices which keep the farmers dissatisfied," Singh told reporters accompanying him to Japan and China.

Singh said he felt "sad" because a lot of efforts were already made by Tata in setting up the Nano plant in West Bengal.

"There should be an increasing attempt to reward the farmer appropriately," he said, suggesting that efforts should also be made to give them a stake in the enterprises which come into existence on the land that is acquired.

The rehabilitation policy, the amendment to the Land Acquisition Act, the Bill is before Parliament.

"I would like that this is not an issue which should create fiction and division among parties, because India must industrialise to realise its destiny," he said.

"The only thing is industrialisation cannot be on the backs of the poor farmers. They should be given remunerative compensation wherever land is acquired," he added.

"Well, we are a free democratic country. It is certainly sad the circumstances in which Ratan Tata had to move his project.

"But entrepreneurs are free to decide the location of their plants and in a democracy, in market economy these things happen. These are the decisions which cannot be forced down the throat of unwilling entrepreneurs," Singh said.

It is sad because a lot of work had been done in Bengal and there was a date fixed for Nano's appearance in the market. So that process was delayed so therefore to some extent it was a sad thing, he added.