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Why the BJP is finding it hard to resist the lure of old-style land acquisition

Add comment   |   August 25, 2014    08:16pm   |Contributed by Indian Realty News

The BJP pushed as the Opposition for a humane and ethical new Land Acquisition Act. The law came into force this year. But now the BJP seems bent on reversing the very aspects that secured the rights of farmers, landowners and displaced people just months after it has come to power. What has changed the party’s mind?

In 2012 the BJP’s Sumitra Mahajan, as chair of the Standing Committee on Rural Development, helped create a humane, just and farmer-friendly Land Acquisition Bill (The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012), along with the then Leader of the Opposition Sushma Swaraj and Rajnath Singh. A Bill that gave farmers a fair shake, protected the right to property and ensured that whole villages were not uprooted for the benefit of private industry. In August 2013, the UPA government passed the Bill. Today, as Speaker of the Lok Sabha, Mahajan is expected to preside over the passage of a legislation that undoes, in spirit and letter, the law she helped bring into being.

What’s behind the BJP’s volte face on the Land Acquisition Act, 2013 and why, less than a year after the BJP-led opposition voted in the Act, is the BJP-led government seeking to undo it?

Good Old National Interest

Big business would have us believe a dilution of the Land Act is in national interest. The law hampers the country’s ‘development’ by making it harder for privately-owned businesses and public-private participatory projects to acquire land for factories, housing, shopping malls, hotels and other profit-making enterprises.

Land-owners would contend the Act protects national interest by protecting farmers, and thereby the country’s food security. By mandating the majority of farmers consent to the surrender of their land and fixing generous rates of compensation, it reduces scope for exploitation. Small landowners cannot be easily dispossessed for the benefit of private industry.

Those inside the political establishment have a different take. Land, they say, is the prime source of black money for funding political parties. Limiting the government’s right to eminent domain limits ability to raise illicit but necessary money from land.

The Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation Act, effective from Jan 1, 2014, was enacted under public pressure. Historically, the Land Acquisition Act of 1894 was used to dispossess land-owners and hand over their property to private parties by stretching the definition of “public purpose” to breaking point.

Let’s take an example. Back in 1960s, the south Delhi hamlet of Masoodpur contributed some 1,337 acres of its land towards a “public purpose”. This turned out to include a series of swanky shopping malls, a five-star hotel and corporate offices. Not to mention Vasant Kunj, the south Delhi colony described by Wikipedia as home to “well-educated and prosperous […] intellectuals, prominent business, celebrities etc.” Needless to say, the village residents received what seems like a pittance (Rs 30 to Rs 98 per square yard), given the current market prices (an apartment can sell for up to Rs 4 crore). Three other villages contributed land to Vasant Kunj, including Kishengarh. In 1986, the denizens of this village clashed with the police. As a cub reporter, quizzing the battered and bandaged populace, it wasn’t hard for me to figure out the problem: they’d lost their livelihoods along with their land, hadn’t the bandwidth to resettle, their families had expanded and they’d encroached on what was now someone else’s property.

But how did it make political sense to take away a small farmer’s land and hand it over to, say, the uber-luxurious DLF Emporio Mall? A BJP fund manager explains. The potential loss of votes was more than offset by the cash generated by such acquisitions. Three important powers vest with revenue officials: acquisition of land, change of land use (CLU) and allotment of acquired land. The three go hand in hand. After all, no industrialist is interested in farm land unless it can be put to commercial use.

Turning land into cash: three models

Model #1 works something like this: a businessman identifies farmland for an industry. Buying it directly from the individual farmers in their hundreds, at market rates, would prove a headache, and anyway, far too expensive. Apart from negotiating purchase, the businessman would have to arrange change of land use and development – provision of power, effluent disposal and roads. The exercise would prove costly in terms of time and money.

He approaches his political buddy for help. The politician then instructs his pet bureaucrat to make it happen. The land is acquired by the government from the farmers, suitably developed, with basic infrastructure like roads (linked to the nearest public road), transmission lines for power and sewerage connections for effluent disposal brought right up to the site. This naturally multiplies the value of land many fold. On paper, the businessman has paid more money to the government than the farmers received for their land, but the escalation in value is far greater. The difference in cost is shared with the politician and the bureaucrat.

Model #2. When a real estate developer wants to set up a housing complex or township, he can buy the land from individuals and then seek the help of politicians to get land use changed from agriculture to residential. He’d obviously pay the politicians substantial sums for this favor. The price of land, once the land use is changed, soars and is measured in square yards rather than acres. In some cases land acquired by the government is allotted for this purpose. The difference between the market price and allotment price is shared.

Model #3. The third method of making money from land is having prior knowledge of changes in the master plan or zoning plan. Politicians use this inside information to acquire land close to upcoming highways, residential and industrial parks. They acquire land at low prices from individuals and once there is a change in the master plan/zoning plan/land use, prices skyrocket.

Now if the government were to acquire this land, the compensation could be fixed at rates much higher than the price paid for the land. In such cases, the new Land Act, with its enhanced rates of compensation, works in favor of the politician. He might choose to locate a project on or near land he already owns. For all of this, the cooperation of bureaucrats is necessary – one reason, perhaps, why states strongly oppose the stringent penalties (imprisonment from 6 months to three years or a fine of Rs 1 lakh, or both) against erring officials spelled out in the Land Act.

Despite the new law, cash from land is not likely to dry up in a hurry, says a fund manager. Every state has a land bank from which it can allot acreage to industry. Most important, it has the power to change land use, thereby enhancing market rates of land. But the differential between the cost of acquisition and the post-CLU market rates will not be as high as it used to be, given the high rates of compensation.

How did we get here?

The Indian state’s tentacle-like grip on land has happened gradually. The Land Acquisition Act of 1894 was amended a glorious 17 times, in each instance eroding the people’s right to property. Pre-Independence, the Act was used mainly to get land for the Railways (until 1933, land could be acquired for infrastructure projects or for the “Company” which meant Railway companies. The amendment made it possible to acquire land for housing railway employees).

When India got Independence, the right to property was actually enshrined as a fundamental right. The British system of acquiring land only for infrastructure or social projects continued until the 1960s, when, armed with a number of amendments effected in 1962, the government embarked on large-scale acquisitions for the private sector. In 1978, the fundamental right to property was taken away altogether by the 44th Constitutional Amendment. (An effort was made to get it struck down as unconstitutional, but the Supreme Court turned it down in 2010). And in 1984, the difference between acquisition of land for a public purpose and for a private enterprise was extinguished through an amendment to Section 4 of the Act.

Protests against land acquisition took two forms: a flood of litigation and grassroots movements. The judiciary, hamstrung by the series of amendments to the Act, was forced to validate acquisition notifications made without indicating whether it was meant for a company or a state enterprise. What it could do was increase compensation, and the bulk of cases were centered around that. Lawsuits dating back to the 1960s – including those of Masoodpur – are still pending before the courts.

In the absence of political backing, farmers’ protests went largely unheard until activists and NGOs helped organize these protests into full-scale movements, forcing governments to take note. The Narmada Bachao Andolan (NBA) was the most high-profile of the agitations. The anti-POSCO movement in Odisha and the anti-Polavaram agitation in Andhra Pradesh took inspiration from the NBA, which continues to struggle for the rights of displaced people in Madhya Pradesh.

A Planning Commission expert group in 2008 quoted unofficial studies pegging the number of people displaced since Independence (and up to 2004) at 60 million, of which one-third have been resettled. Of the 25 million hectares acquired by governments, 7 million hectares was forest land and another 6 million was common property or gram sabha land, like pastures. Forest dwellers comprise 40 percent of displaced people.

Displacement ripped apart families and whole villages, created economic hardship and serious law and order problems as the dispossessed turned increasingly desperate. The consequences of land acquisition reverberated down generations and took unlooked-for forms. From 2007-08, for instance, the Gujjars of Rajasthan launched a violent agitation to demand scheduled tribe status. A pastoral community, dependent on animal husbandry, they had suffered economically from the shrinkage of their pastures. With no other means of gainful employment, they lobbied for reservation in government jobs.

In and around Delhi, villages fell prey to the Maruti syndrome. Farming families came into quick money when their land was acquired and spent it all on alcohol and cars – in the late 1980s, Marutis were the first option. Many studies have been conducted on the peri-urban interface of Delhi. All point to a rise in consumerism and alcoholism and erosion of livelihoods along with the natural resource base, like pastures and water bodies, of the affected villages.

An issue Sushma Swaraj had raised during the debate on the Bill.

Recent Developments

Post-POSCO, the UPA government decided to define “public purpose” and focus on rehabilitation and resettlement. It brought in two Bills: the Rehabilitation and Resettlement Bill, 2007 and the Land Acquisition (Amendment) Bill, 2007. Both lapsed with the 14th Lok Sabha. It then redrafted the Bills and submitted them to the Cabinet in 2009, but did not place them in the Lok Sabha. In 2011, it brought in an integrated Land Acquisition and Rehabilitation & Resettlement (LARR) Bill.

The Standing Committee on Rural Development, chaired by Mahajan, criticized the Bill for not going far enough in protecting the rights of land-owners and other stakeholders. To quote: “The Bill throws the doors wide open for any kind of land acquisition by the state for companies, whether these be state enterprises, private enterprises or public private partnerships. Such a wide ambit for discretionary action by the executive amounting to arbitrariness can hardly be reconciled to the high objectives proclaimed in the Preamble to the LARR Bill, 2011.”

The Mahajan report pointed out that in all developed democracies private purchase of land, and not State acquisition, is the norm. (The EU does not allow land acquisition by the state for private enterprise, while in the US, the government can only acquire land for “benefitting the general public and not for advancing the economic interest of private parties.” In Japan, even for state projects, the primary mode of acquisition is through purchase.)

The report goes on to say, “There is no provision in their laws for the State acquisition of privately held land for profit-making private enterprises, nor, by extension, for public-private enterprises.” It recommended that acquisition be for a “public purpose”, defined as linear infrastructure and irrigation and social sector infrastructure such as schools, hospitals and drinking water/sanitation projects constructed at State expense.

It also suggested that the role of local self-government institutions be mandated by legislation, and that gram sabhas be not merely consulted but asked to consent. It said gram sabhas must be “specifically endowed with powers to prevent alienation of land and to take appropriate action to restore any unlawfully alienated land,” and no central Act should be exempted from the purview of the LARR Bill.

The final Act incorporated the spirit of the Mahajan committee’s recommendations by putting in a strong consent clause – not just for private but also Public Private Partnership projects, and generous compensation and rehabilitation and resettlement measures for all livelihood losers. The suggestion that if land was not used for the purpose for which it had been acquired for five years, it would be returned to the original owner or the state land bank, was also incorporated.

The redrafted Bill was discussed at all-party meetings on April 9 and April 18, 2013, criticized by the BJP – specifically, by Rajnath Singh – for failing to adequately protect the rights of farmers. BJP leaders Sushma Swaraj (then leader of the Opposition) suggested a slew of measures to make acquisition even harder for private enterprises. Some of her suggestions, like retrospective application of the Bill, a lease rather than purchase option and a prospective share in development benefits for the original owner were incorporated.

NDA, UPA & U-Turns

Now that the BJP is in power, it intends to dilute provisions of the Act it had held were pro-farmer.

The contentious provisions of the Land Act, 2013, were identified at the meeting of 32 state & UT representatives called by Minister for Transport Nitin Gadkari last month:

the “consent clause”: for private projects, at least 80 percent of farmers must consent to surrender their land; 70 percent in the case of public-private participatory (PPP) projects
the Social Impact Assessment clause: an independent expert group is to review the socio-economic outcomes of the proposed ‘development’ interventions before giving the green signal
the land bank clause: if land acquired is not used for the stated purpose within five years, it must be returned to the original owner or to the state land bank
the project-affected clause: landless laborers, artisans and all those whose livelihoods are put at risk by the proposed project are to be compensated, not just the land-owners
the R&R clause: rehabilitation and resettlement must be undertaken for all the project-affected, even if 80 percent of the land holders voluntarily sell their land
the food security clause: multi-crop land cannot be acquired for any project, public or private, unless it is demonstrably a last resort
the resale clause: if acquired land is sold to a third party, the original owners get 40 percent of the sale amount
restrospective effect: the Act applies with retrospective effect to land that has been notified for acquisition but for which compensatory awards have not yet been given
the penalty clause: violations by officials invites stringent punishment including imprisonment

Nineteen suggestions were made in all, of which five are significant. First, dilution or deletion of the consent clause for PPP projects. Second, doing away with social impact assessment for all but “large” and PPP projects. Third, removing the ban on acquiring multi-crop land. Fourth, redefining project-affected to exclude some of the livelihood losers. Fifth, modifying the retrospective clause to allow notified land to be acquired even where compensation has not been awarded in the last five years.

Economist Mohan Guruswamy sees nothing wrong in diluting – but not removing – the consent clause. “We’re a first-past-the-post democracy. If more than 50 per cent of land-owners – say 55 or 60 – agree, then that should be adequate.” At the same time, he says, the state needs to guard against land grab in the form of projects. “Why does Tata need 7,000 acres for an automobile factory? Or Anil Ambani need 3,000 acres for a power plant?” Although Tata only actually got 1,100 acres for its Nano factory in Gujarat (the rest of the land – 5,000-plus acres – is meant for an industrial estate adjoining the factory), Guruswamy makes a valid point. And Special Economic Zones (SEZs) are regarded as “land grab” because industrialists tend to demand huge tracts – the Adani Port SEZ in Kutch covers 15,000 acres; Reliance wanted 35,000 acres in Navi Mumbai; the Perambalur SEZ is 3,000 acres.

Why we need social impact studies

The threat of land grab is precisely what makes social impact assessment so necessary. Gram sabhas and expert groups can question the extent of land needed for a project, as well as its location. NBA activist Chitrarupa Palit points out that elimination of social impact assessment for all but big projects would effectively deprive people of any say in the development of their area and encourage private enterprise to violate environmental norms and deplete natural resources, crippling the economy of the village. And removing livelihood losers from the list of beneficiaries would leave them destitute.

As Speaker Sumitra Mahajan pointed out so recently, in other developed nations, state purchase of land is not the norm. Should government have a role at all in acquisition of land for private enterprise? The Ekta Parishad, a federation of several thousand community-based organizations, believes that majorities can be wrested through money and muscle power. So the gram sabha’s decision on whether or not to locate a project in their area should be unanimous and binding on the government.

Given that the BJP supported the Jan Satyagraha, a 350-km march for land rights in 2012, the move to amend the Land Act comes as a surprise. All these clauses were either put in at the BJP’s behest or supported by its leaders. On the other hand, Prime Minister Narendra Modi has always favored land allotment for industry. As Gujarat chief minister, his land acquisition policy, albeit described by the UPA government as the best model, evoked widespread protests by farmers.

The RSS-affiliated Bharatiya Kisan Sangh has often butted heads with Modi. It has opposed the move to change the Land Act by diluting the consent clause and yielding multi-crop land to industry, and has threatened to launch an agitation with “left, right and center” if any attempt is made to do so.

In a parallel exercise, the NDA has floated a proposal to dilute the provisions of the Forest Rights Act of 2006 and allow forest land to be acquired for certain projects without the approval of the gram sabha. The move to change the law was initiated last year, when the UPA was in power. It was opposed by the then ministers of tribal affairs and environment.

The Congress left a considerable legacy of social legislation: the Right to Information Act (RTI), the Rural Employment Guarantee Scheme (MNREGA), the Right to Education (RTE), Forest Rights Act (FRA), the Food Security Act (NFSA) and of course, the Land Act. All were passed with the support or at least the consent of the BJP. So if the NDA government now wants to change the Land Act, it will have to go through a consensus-building exercise, getting Congress-led state governments and other parties in Parliament on board – an operation that is well underway.

Source: Yahoo News India, By Bhavdeep Kang

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