AAP And The Endless Land Acquisition Lament

Delhi isn’t overrun by poverty stricken subsistence farmers. It is overrun by ex-farmers, their lands long gone, who want better jobs and better opportunity. They would vote for those who look like they mean to deliver on their developmental promises.

It seems India will not cease washing its land acquisition laundry in public any time soon! Of the many reasons being ascribed for the resurrection of the Kejriwal bandwagon in Delhi, the Government’s attempt to promote growth by cracking the land acquisition logjam is now being cited as one. Why you may ask should that be so? Let’s look at the issues.

Of the three times I’ve delved into this issue for Businessworld in the last decade, perhaps the pithiest identification of the key issues is to be found in Land Acquisition Angst (Businessworld Jan 29th, 2010). Written in response to Manmohan Singh’s suggestion that all land acquisition should be ‘consensual’, I had argued that coercion was an inevitable part of any sovereign asset expropriation. Rather than be antsy about the compulsive side of it, we would better serve both justice and India’s development agenda by focusing on the law’s two biggest failures: (1) rational pricing of acquired land, and (2) expeditious mechanisms for payment of compensation and rehabilitation.

Mercifully, UPA2’s Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 addressed both these issues. Regrettably, it came with bad news: the prescribed “due process” became so stringent as to be unimplementable. It paralyzed the country’s development initiatives. Something had to be done about that, and any incoming Government would have done what Modi’s government did.But did Modi’s Government do the right thing? Let’s take it issue by issue.

At the root of it all is a very basic question: in what circumstances is any Government entitled to expropriate private land? Traditionally, in Indian law, the Government could take land whenever it wanted, from whom it wanted, for any purpose it wanted, and then use it for the stated purpose, or for some other purpose, and never pay for it if it didn’t want to. It was heartless and unconscionable. The 2013 law changed that. Under this new law, the Government couldn’t realistically acquire multi cropped land any more. If Government wanted land for a privateproject, 80% of the landowners had to agree to become victims of acquisition. If the project was a joint venture with Government, only 75% land owners needed to agree.

As laws went, this was about as suicidal as its possible to be. Culturally speaking, you are never going to get 75% or 80% of any large group in Indian to agree to anything at all! That rang the final death knell of large private projects. All that the Modi sarkar has now done is to promulgate that these provisions do not apply if the Government wants land for defence, rural electrification, affordable housing, industrial corridors or social infrastructure projects. You could sneer and say “so what does that leave out?” and I would agree. I don’t want to leave anything to consent either. Consent doesn’t work. People disagree only because others agree. Then the guys who continue to disagree the longest get paid off the most to agree. To make him agree, you also have to pay off the social workers, the environmental activists and the mofussil lawyer who helps him to disagree with stay orders and Mohammad Ali Jinnah type ‘direction action’ initiatives. It’s a crude kind of legislated extortion while the project cools its heels. I don’t like legal extortion.

That takes us to this business of social impact. The old law didn’t give two hoots about social impact so the 2013 law made a “Social Impact Assessment Report” mandatory. I don’t care two hoots about Social Impact Assessment Reports either. Bluntly speaking, wholesale displacement is always traumatic. What is this report going to tell me that I don’t already know even in the most optimistic of circumstances? The real question though is this: do the victims have enough money to rebuild their lives elsewhere? Or are they being moved into a shantytown at the end of the project to rot in a chikungunya pool till they die, taking their compensation claim with them to their funeral pyres?

Which brings us to what I think is the bleeding edge of the land acquisition hatchet: are you going to pay the people enough and on time for the land you grab from them? The old law neither wanted to, nor needed to, nor cared. The 2013 law changed that. First, it recognized that not everyone who lives on the land is an owner of it. For the first time, displaced persons were to be compensated too. Suddenly, the pain of being very poor in India was eased, if only fractionally. Second, this law boosted up the money paid as compensation by orders of magnitude. Curiously, this attracted the most criticism at the time. This is totally understandable. We wealthy Indians don’t like to pay for land we grab any more than we like to pay our maids another Rs. 500 a month for back breaking work even as we take in lakhs in salary increments and ride around in BMWs.

Just to get it into perspective, under the 2013 law, Government was now required to acquire land at current market value based on its current use. This value was calculated at the higher of (1) the notified ‘circle rates’ for registration of properties, and (2) the average of the top 50 per cent of sales registered in the previous three years. Since circle rates are generally well below market rates and not so many people engage in “all cheque” transactions, the law doubled this amount in urban areas (4 times in rural areas) for good measure to establish land value. This value was doubled again to provide solace against the emotional harm of compulsory acquisition. The Government also had to pay for all the assets developed on the land. It also had to pay 30% of the established value. All delays in payment carried interest at 9 per cent. Best of all, the Government could not take the land till it had paid full compensation! I especially liked the last bit because that I believe is what an honourable nation trying to make honourable laws would do.

All this may sound like a lot of money. It is, as it should be. We aren’t just talking about taking land from people: we are talking about taking peoples’ lands, their lifestyles, their social milieu, even their lived memories. I still occasionally go back to my home town and look at the building where I was born. It fulfils me, provides spiritual solace and centres my soul again. I don’t care a fig about pushing for cheaper land because somebody like me can put up a cheaper factory and correspondingly sell me cheaper toothpaste. It is gratifying to see that the new government has made no attempt whatsoever to succumb to all the screaming solos we hear about land becoming too expensive, etc. Ditto resettlement and rehabilitation: whatever UPA2 did to ease the pain of relocation has been retained by the Modi sarkar.

The same can be said for land that is expropriated and then not utilized at all. The old law was happy for the Government to take the land for say an ordnance factory and then either not use it at all or use it to make farmhouses for some very wealthy people. Not anymore. The 2013 law provide that if you don’t use the land within five years of taking possession, you have to give it back to the land owners or the state land bank. The latest amendment tweaks it only slightly. Now, because many projects have long gestation lags, the land can be retained for the period specified for a project if that is longer than five years. This seems eminently fair to me.

Any which way I look at it, these changes were necessary to kick restart project activity and push India’s developmental ambitions. We needed these changes because we need India to grow. Delhi’s electorate understands that too. Delhi isn’t overrun by poverty stricken subsistence farmers. It is overrun by ex-farmers, their lands long gone, who want better jobs and better opportunity. They would vote for anyone who look like they mean to deliver on their developmental promises.

Originally published on February 12, 2015 in Businessworld


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