In the run up to General Elections 2014, and before the Election Commission’s Model Code of Conduct comes into play, the Congress-led UPA is in the process of overcoming one of the big humps in its effort to crank up economic policy. The decks, it seems, have been cleared for the crucial land acquisition bill.
After weeks of hectic negotiations between various political parties, the Land Acquisition and Rehabilitation and Resettlement Bill could be introduced in the second half of the Monsoon session which reopens on April 22 after the traditional lay off.
At the end of yet another all party meeting, Parliamentary Affairs Minister Kamal Nath told reporters that they had ‘‘reached a broad consensus on land acquisition. Rural Development Minister Jairam Ramesh, too, confirmed what Kamal Nath had said. The reported consensus had indeed been hard to arrive at – there are a total of 35 major amendments which will be introduced in a bill which has 107 clauses.
There can be little doubt that this much-awaited bill is aimed at the big leg up for development projects in India and for policy planners within the Congress and the government, it constitutes a period of economic reconstruction since the days of the Pranab Mukerjee, who as Finance Minister was practically responsible for taking the economy back into the license raj era.
It will also be the first central legislation in India for the rehabilitation and resettlement of families affected by the vexed and politically tricky issue of land acquisition. Significantly, it seeks to replace a British Raj-enacted Land Acquisition Bill, 1894.
As per the proposed bill, the law will become applicable ‘‘when the government acquires land for its own use, hold and control’’; ‘‘it acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose’’ and includes ‘‘public-private partnership projects but excludes land acquired for state or national highway projects,’’ or when the ‘‘government acquires land for immediate and declared use by private companies for public purpose.’’
The government’s stated position on the bill which was introduced on September 5, 2011 is simple: it says public concern over land acquisition is a worry, no concern greater than the fact that despite umpteen amendments, there has been no cohesive national law that addresses two main issues: one, fair compensation when private land is acquired for public use and two, fair rehabilitation of land owners and those directly affected from loss of livelihoods.
Says an official connected to the drafting and redrafting of the bill, ‘‘the Government of India believes that a combined law is necessary, one that legally requires rehabilitation and resettlement and necessarily and simultaneously follow government acquisition of land for public purposes.’’
Disputes over land acquisition issues are a frequent occurence dotting the Indian landscape and political parties are concerned: where afterall will global companies set up their operations except into the Indian hinterland? Which makes it a politically ticklish issue. At Singur in West Bengal, where the Tata Group was supposed to set up its Nano car plant in 2008, confusion abounds. Mamata Banerjee of the Trinamool Congress, who led the agitation over Tata’s acquisition of farmland, is now the state’s chief minister. One of her first acts after gaining power — Singur was one of her major campaign points — was to push through the Singur Rehabilitation and Development Act. The law would enable the government to return the land to the farmers. The Tatas say they have invested nearly $400 million in the plant.
In Odisha, work at the Posco site was halted for several days. Posco, South Korea’s Pohang Steel Company, is planning to build a $12 billion steel plant here, the largest-ever FDI planned for India. According to the media, recently close to 2,000 women, children and men formed a women barricade to prevent the police from entering the site earmarked for the project. Similar trouble has erupted in Jaitpur in Maharashtra, where a nuclear plant has been planned. Here, however, anti-nuclear activists have overshadowed the anti-land acquisition movement. But many crucial highway and power projects in Uttar Pradesh are hanging fire because of agitations, many of which have been violent and politically motivated.
There is also a flip side. In Rajasthan’s Barmer district, farmers have turned millionaires overnight as oil major Cairn Energy has bought their lands. The company struck oil in the state a few years ago and now proposes to build a refinery close to the site. With the government having finally cleared the proposed sale of Cairn India to the UK-based Vedanta controlled by Anil Agarwal, the refinery project is likely to be expedited. Farmers in the vicinity are expecting another windfall as two other projects – a power plant and a lignite mining operation — are also being planned.
But the nub of the problem lies in the realisation that Indian agriculture does not yield adequate returns. If the prevailing view in the government is anything to go by, the future is poised towards large farms with consolidated land holdings run by private corporations. ‘‘The farmers’ own inclination would be to sell out if a fair deal is offered,’’ says an official. Most companies have offered jobs in addition to the compensation, to help sweeten the impact of land acquisition.
But all this is only possible when the bill becomes an all India central act. The bill defines ‘public purpose’ as the following:
Politically, for the UPA government, the introduction of the bill would be an achievement And in an attempt to take as many political parties on board as is possible, it has gone out of the way to accommodate the demands of the BJP and Shiv Sena that compensation also be paid to original land owners if it had been bought by private entities after September 5, 2011, the day the bill was introduced.
These parties had raised concerns about land mafia buying and hoarding land in anticipation of hefty compensations after acquisition. A new provision in the bill would ensure that in such cases, the original land owner also gets a share of the compensation.
The BJP’s other proposal of keeping the option open for a lease agreement as opposed to an outright purchase so that the farmer does not lose his original rights over land, is also going to be adopted.
Partially on board are the CPM whose demand for changes in certain sections which give the government the right to amend clauses related to compensation as well as resettlement and rehabilitation is being accepted. The party had demanded that the government should have the right to amend these provisions but only to revise it upwards, not dilute or water it down.
Says JD (U) leader Sharad Yadav, ‘‘it is important that the new act does not jeopardise food security.’’ Other doubts have been expressed by DMK saying that land acquisition is basically a state subject. But the fact that despite reservations, political parties have come on board does suggest that land acquisition is a bandwagon they will like to hitch on to – after all Mamata Bannerjee has shown the way and the others are bound to emulate it.
Major Indian infrastructure projects such as the Yamuna Expressway have paid close to Rs 2,800 crores ($500 million) for buying land in Uttar Pradesh. In global terms, it works out to $ 25,000 per acre between 2007 and 2009.
How does it compare with land prices acquired for developmental projects globally? According to influential daily The Financial Times, in 2008, farmland prices in France were Euro 6,000 per hectare or approximately Rs. 1,09,350 per acre.
According to the United States Department of Agriculture, as of January 2010, the average farmland value in the United States was $2,140 per acre or roughly Rs 96,300 per acre. Farmland prices in the United States, of course varies from one part of the country to the other – as it does in India.
A 2010 report by the Ministry of Labour, India, claims that as per 2009 data collected across all states in the country, the all-India annual average daily wage rates in agricultural occupations ranged between Rs 53 to 117 per day for men working in farms and between Rs 41 to 72 per day for women.
This wage rate in rural India included the following agricultural operations common in India: ploughing, sowing, weeding, transplanting, harvesting, winnowing, threshing, picking, herdsmen, tractor driver, unskilled help and mason.
The compensation for acquired land is based on the value of the agricultural land. In the process, price increases have been ignored. The land value would increase many times, which the current buyer would not share the surplus value.
Secondly, if the prices are left for the market to determine, the small peasants could never influence the big corporate tycoons. It strictly creates the unfair price management leading to land acquisition in India.
The compensation provided to the farmers should be characterized into two broad categories. A minimum amount in relation to the present market value should be paid to the person while a monthly pension should be allotted from a trust where the company shares are vested.