The spin-doctors of the Bhartiya Janata Party(BJP) are normally very good at spinning things. Nevertheless, the entire debate on land acquisition seems to have gone out of their hands.
No government in this country has ever made an effort to explain economic reform to people. Economic reform has always happened by stealth. This is something that needs to stop.
Prime Minister Narendra Modi has asked his party MPs to go to the people and explain to them that the new land acquisition law is in their interest. This, if executed well will be a great move. The BJP can also use the prowess of its back-room boys to explain to its MPs in a very simple way what the issue is all about and how it should be communicated to the people. The trick is to make things simple but not simplistic (as often happens when politicians take over).
Prime Minister Modi should also explain the entire issue to the people of this country directly on his radio programme mann ki baat. If required there is no harm in speaking to the people directly on Doordarshan as well.
It is important that the BJP does not back down on the The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014. It needs to go directly to the people and explain why this legislation is in the interest of the nation. If the party backs down here, it will become more and more difficult to push any economic reform in the days to come.
Before we go any further, it is important to go back a little. Until 2013, land acquisition in India was governed by the Land Acquisition Act, 1894. This Act survived all the years of socialism as well as socialists that governed the country. A 1985 version of this Act stated: “Whenever it appears to the [appropriate Government] the land in any locality [is needed or] is likely to be needed for any public purpose [or for a company], a notification to that effect shall be published in the Official Gazette [and in two daily newspapers circulating in that locality of which at least one shall be in the regional language], and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.”
In simple English, this British legislation allowed the government to seize any land that it wanted to. It survived for close 66 years in independent India. Governments often used this Act to acquire land and then sell it on to crony capitalists who made a killing in the process (and so did the politicians). Farmers lost out.
This has led to a scenario where people are skeptical about selling their land. The trust required for such a transaction to take place has totally broken down and will not be easy to repair. The Congress party ruled India for a large part of this period and they are basically responsible for the mess that prevails. The 1894 Act was eventually replaced by The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013, which went to the other extreme and bought all land acquisition to a standstill.
One of the major provisions of the Act was that private companies acquiring land would require the prior consent of at least eighty percent of the affected families. In case of public-private partnerships(PPP) the prior consent was required from at least seventy percent of the affected families.
This has brought all land acquisition to a standstill. Companies have till date been used to governments arranging land and handing it over to them on a platter. They are still trying to get used to this new way of doing things. The BJP government brought in The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014, which made a few changes to the 2013 Act. The ordinance was signed by President Pranab Mukherjee on December 31, 2014.
In the ordinance the requirement of getting prior consent from those affected has been done away in certain cases. Anand Ranganathan in a brilliant column on www.newslaundry.com writes that: “Projects relating to national security or defence, including preparation for defence, defence production; rural infrastructure including electrification; affordable housing and housing for the poor people; industrial corridors; infrastructure, social infrastructure and PPP projects where government holds the land, there is no longer any need to obtain prior consent of 80% (for private projects) or 70% (for PPP projects).”
This is clearly a step in the right direction. Land required for the defence, electrification, affordable housing, industrial corridors etc., needs to be made available as soon as possible.
The trouble here is with the phrase “social infrastructure,” which wasn’t there in the original 2013 Act and has been inserted only in the ordinance. This phrase needs to be clearly defined to tell the people that it hasn’t been introduced to provide a back-door entry for corporates.
Further, the 2013 Act had clearly stated that “no irrigated multi-cropped land shall be acquired under this Act.” Such land could only be acquired “subject to the condition” that it was “being done under exceptional circumstances, as a demonstrable last resort.”The 2014 ordinance does away with this. This is another thing that the BJP needs to explain to the people of this country. In a country where half of the land area is arable, it is very difficult to get hold of non-agricultural land, close to the cities, most of the time. Further, there is no shortage of land for agriculture in India, even if some of it goes towards urbanization and industrialization. (As I explain in this piece).
Further, the general impression that has been communicated about the 2013 Act (as well as the 2014 ordinance, given that there has been no change on this front) is that those affected will be paid a compensation by the appropriate government of four times the market value of the land that is being acquired. This is not actually true. This was first done by the Congress when it was in power. And is now being done by the BJP over the social media.
The 2013 law(as well as the 2014 ordinance) is slightly more complicated than that. For rural areas the minimum compensation promised is anywhere between two to four times the market value of land along with the value of the assets on that land. For urban areas the minimum compensation promised is two times the market value of land along with the value of the assets on that land.
This is to be determined by state governments. Hence, state governments are in a position to pay only twice the market value of the land that is being acquired in rural areas. In fact, this has already happened.
As a report on NDTV.com points out: “at least two BJP led states – Haryana and Madhya Pradesh – have fixed as compensation of two times the market value of the land for both rural and urban areas.” But there are other states which are paying more. Nevertheless, this is an anomaly that needs to be set right. If land is being acquired for a certain purpose, the government should be following a similar ratio throughout the country.
The BJP is on a strong wicket in this case. It needs to bat accordingly. It needs to tell the people of this country that it was the Congress party which forcefully took over their land over the years. It also needs to tell the people that more than a million Indians are entering the workforce every year. Jobs need to be created for them—and how will jobs be created without the creation of more physical infrastructure and new industry.
In fact, Arun Jaitley made a fantastic speech in the Rajya Sabha yesterday defending the land acquisition ordinance. “Don’t create an environment where infrastructure and industry become bad words,” he said.
More such performances are required for the BJP.
The column originally appeared on www.firstpost.com on Feb 27, 2015
(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)