Land acquisition

Why it is easier to acquire land in Gujarat & Punjab than Bihar, Kerala & Bengal

land
Land acquisition has been a tricky subject in the country of late. The issue has been discussed threadbare in the media over the last few years. But one point seems to have been missed out on. I came across this rather basic and very interesting point in Sanjoy Chakravorty’s book The Price of Land—Acquisition, Conflict, Consequence.

In this book published in 2013, Chakravorty uses data from the 2005-2006 agriculture census. I will use data from the 2010-2011 agricultural census in this column and make the same points that Chakravorty is making.

The basic point that Chakravorty makes is that it is easier to acquire land in states where the average landholding is larger in comparison to states where the average landholding is smaller. As Chakravorty points out: “In Kerala, where 96 per cent of all landholding are marginal, the average marginal holding size is 0.35 acres [the actual number is around 0.34 acres. The writer seems to have rounded it off to 0.35 acres]. In Bihar, where almost 90 per cent of all holdings are marginal, the average marginal holding size is 0.62 acres.”

How do things look if we were to use data from the 2010-2011 agricultural census? The above paragraph would read like this: “In Kerala, where 96 per cent of all landholding are marginal, the average marginal holding size is 0.33 acres. In Bihar, where almost 91 per cent of all holdings are marginal, the average marginal holding size is 0.61 acres.”

As we can see the numbers haven’t changed much between 2005-2006 and 2010-2011.
Chakravorty further points out: “In both these states [i.e. Bihar and Kerala] the marginal holdings make up little over half of all agricultural land area. In Tamil Nadu, Uttar Pradesh and West Bengal, over 75% of all landholdings are marginal. It may be very difficult to bring these lands to the market.”

In Bihar farmers with marginal landholders own 57% of all agricultural land. In Kerala, the number as of 2010-2011 stands at 58.6%. In Tamil Nadu, Uttar Pradesh and West Bengal, 90%, 79% and 82% of all landholdings are marginal.

What this means is that the moment a large amount of land needs to be acquired for an infrastructure project or setting up a factory or a mine, a large number of landholders need to be dealt with. In many cases, some arm of the government (state or central) wants to acquire land for private businesses. And this is not easy.

Further, many other states like Gujarat, Rajasthan and Punjab have larger average landholdings. As Chakravorty writes: “From the smallest landholders(marginal farmers in Kerala, averaging 0.35 acres per holding) to the largest (50 acres in several states, even larger in some), it is not difficult to see how a price such as Rs 10 lakh per acre can be perceived very differently by different landholders based on the size of their holdings. For example, an average large landowner in Gujarat would be paid more than Rs 4 crore for his land (because the average large landholding size in the state is over 41 acres), whereas the average marginal landowner in Kerala would be paid Rs 3.5 lakh.”

How do things look if we use 2010-2011 agriculture census data? The average large landowner in Gujarat owns around 52 acres. Hence, at Rs 10 lakh per acre he would be paid Rs 5.2 crore. In fact, even if we look at marginal landowner in Gujarat things are much better. The marginal landowner in Gujarat owns around 1.2 acres. At Rs 10 lakh per acre the payment is Rs 12 lakh. In Kerala, the average marginal landowner owns 0.33 acre as per the latest agriculture census, and this amounts to a payment of Rs 3.3 lakh. In Bihar with an average size of 0.61 acres, the payment would be Rs 6.1 lakh.

In fact, Punjab is another state where the average marginal landholding is significantly large. The average size in case of marginal landholding in Punjab is 1.5 acres. At Rs 10 lakh per acre, this would involve a payment of Rs 15 lakh. The average size of a landholding in Punjab is around 9.3 acres. And at Rs 10 lakh per acre, it would involve a payment of Rs 93 lakh.

Given this difference in average landholding size, it is easier to acquire land in parts of the country where average the landholding size is larger because that ultimately leads to higher payments. As Chakravorty writes: “Based on this information on land distribution alone, it is possible to conclude that land acquisition is likely to very difficult in some states; Kerala, Bihar, and West Bengal top this list. It is also likely to be significant challenge in Tamil Nadu and Uttar Pradesh, and to a lesser extent, in Andhra Pradesh and Assam.”

In fact, information is available even at a district and sub-district level. Given this, identifying parts of the country where land fragmentation is lower and hence, land acquisition should be easier. Nevertheless as Chakravorty puts it: “This is not hard to do because the information already exists. Having this information should make the task of identifying land for acquisition easier, but to the best of my knowledge, has never been done.”

This is not surprising given that there was very little resistance to forceful land acquisition carried out by the government up until very recently. But now that is no longer possible, hence, more out of the box solutions need to be looked at.

The column originally appeared on The Daily Reckoning on Dec 8, 2015

Why has Narendra Modi changed his Mann Ki Baat on land acquisition


narendra_modi

In a column I had written for Firstpost on February 27, 2015, I had suggested that the prime minister Narendra Modi should use the platform of mann ki baat on All India Radio to explain to the people of this country why the Land Acquisition Act of 2013, needed changes.

Modi addressed the issue in the mann ki baat programme on March 22, 2015. He explained why the The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014, which made changes to the Land Acquisition Act of 2013, was needed.

The Article 123 of the Constitution empowers the President to promulgate an ordinance if the Parliament is not in session, provided he is convinced that the situation demands so. Further, an ordinance is valid upto six weeks from the date on which the next session of the Parliament starts. After that it lapses. There is no upper limit to the number of times an ordinance can re-promulgated. The land acquisition ordinance issued by the Modi government has been re-promulgated thrice. It is valid up until today (i.e. August 31, 2015), when it will be allowed to lapse.

Modi made this announcement over the mann ki baat programme aired yesterday. As he said: “Tomorrow [August 31, 2015] the Land Bill will lapse and I have agreed to it. The government will not repromulgate [an] ordinance, but will include 13 points to reform the land acquisition law to benefit farmers.”
There has been much criticism of the Modi government, from those on the left, as well as those on the right. The jhollawallahs feel that the Modi government is kow-towing to the corporate crowd, which finances the Bhartiya Janata Party (not that it does not finance the Congress and other parties). Those on the right believe that it is not the job of the government to be acquiring land.

The issue is a little more complicated than that.  Land is not just needed by the private parties, it is also needed by the government for projects which are of national importance and which seek to improve the quality of life of the people of this country.

In a recent interview to The Indian Express, Mangu Singh, Managing Director of the Delhi Metro was asked how does the Delhi Metro manage land acquisition: “Fortunately, so far there hasn’t been any case where we require private land under the new Act (Land Acquisition, Rehabilitation and Resettlement Act, 2013), because we also believe it is almost impossible to acquire land under the new Act.”

In fact, this is something that even Jairam Ramesh, the brain behind the 2013 Land Acquisition Act also admits to. As he writes in Legislating for Justice—The Making of the 2013 Land Acquisition Law along with Muhammad Ali Khan: “The law was drafted with the intention to discourage land acquisition. It was drafted so that land acquisition would become a route of last resort.” In fact, for anyone who really wants to understand how complicated the process of land acquisition actually is under the 2013 Act, should read Ramesh and Khan’s book. It is not surprising that Singh of Delhi Metro believes that it is impossible to acquire land under the new Act. And he doesn’t work for a greedy corporate.

For a country which has nearly 13 million people entering the workforce every year and which has aspirations of “making things,” a law which discourages acquisition of land really cannot be the best way to move forward. No country has gone from being developing to being developed without the expansion and success of its manufacturing sector. And any manufacturing enterprise needs some land.

Further, the physical infrastructure in the country from roads to rail to ports are all creaking. Nearly 70 years after independence many villages in the country do not have access to electricity. All this needs land.

Another fundamental point that the jhollawallahs need to understand that nearly half of the country’s population is engaged in agriculture producing only around 18% of the country’s gross domestic product (GDP). While it is one thing romanticising agriculture, there is a fundamental problem here. There are many more people working in agriculture than required. This means that people needed to be moved out of agriculture. The situation gets even worse once you take into account the fact that most people who work on farms don’t totally depend on income from the farm. Only 17 percent of them survive entirely on money from their farm. So most farmers need to make ends meet by doing other odd jobs.

When Modi had addressed the country through the mann ki baat programme in March earlier this year, he had addressed this issue when he had said: ““In every household, the farmer wants only one son to stay in farming. But he wants other children to get out there and work because he knows that in order to run a household in this day and age different endeavours need to be made.” He then went to say that given this scenario what is wrong with the government acquiring land for building an industrial corridor and ensuring that jobs are created in the vicinity of where farmers live.

The point being that Modi had sold the land acquisition ordinance as something that would benefit the farmers. Now five months later, he has withdrawn the ordnance and even sold this move as being beneficial to farmers. How can that be possible?

The question is why has Modi taken a u-turn on the land acquisition issue after expending so much political capital behind it? A simple answer is the up-coming assembly election in Bihar. Other than the fact that Bihar sends 16 members to the Rajya Sabha, the election is also seen as a sort of a vote on Modi’s time in office since May 2014. It is being seen as a vote on whether people still believe in Modi’s promise of “acche din”.

The Bhartiya Janata Party and the National Democratic Alliance do not have the numbers required in the Rajya Sabha to push through key economic legislation. To get members in the Rajya Sabha, the BJP plus NDA first needs to win state assembly elections. The Rajya Sabha members are elected by the members of state assemblies.

The trouble is this focus on state assembly elections will continue for the next couple of years with elections in key states like West Bengal, Tamil Nadu and Uttar Pradesh coming up over the next few years. Hence, compromises on the economic reform front will keep happening.

Chances are the BJP plus NDA might win some of the assembly elections and end up with the numbers they require in the Rajya Sabha. But by then will there be enough time left for the Modi government to deliver even a small part of the “acche din” they had sold to the people of this country? For that to happen, the government needs to create conditions which lead to the creation of jobs. That isn’t happening at this point of time.

The three key economic reforms it was believed Modi would push through were: land reforms, labour reforms and the goods and services tax. Land reforms have been put on the back burner. Labour reforms never really took off (there have been some minor moves in Rajasthan and Madhya Pradesh, two states which barely have any industry). And so many compromises have been made in the bid to get it passed, that it is better that the Goods and Services Tax does not get passed in its current shape.

If they continue going the way they currently are, Modi and BJP might end up with a majority in the Rajya Sabha, only to lose to the 2019 Lok Sabha elections.  And that is something the country cannot afford. Because then the BJP will behave like the Congress is now.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The column originally appeared on Firstpost on August 31, 2015

The land acquisition process will continue to remain at a standstill

narendra_modi
Vivek Kaul

It seems we are going to go back to the Land Acquisition Act 2013, which was passed during the time when the Manmohan Singh led UPA government was in power.

The 2013 Act which replaced the 1894 Land Acquisition Act had made the entire process of acquisition of land extremely difficult and time taking. The 2013 Act is the exact antithesis of the 1894 Act, which given the fact that it had been introduced during the time the British ruled India, allowed the government to acquire land at a drop of a hat and very quickly.

The 1894 Act had something called as the “urgency” clause.  As Jairam Ramesh and Muhammed Ali Khan write in Legislating for Justice—The Making of the 2013 Land Acquisition Law: “Section 17 of the Land Acquisition Act, 1894 was used to forcibly disposes people of their land in a frequent and brutal fashion by suspending the requirement for due process…Section 5A…allowed for a hearing of objections to be made but put no responsibility on the Collector to take those claims into consideration.”

What this meant was that people could complaint against the acquisition of land, but it was up to the Collector of the area where the land was being acquired whether to give them a hearing or not. Also, there was no clear definition of urgency. It was left “to the authority carrying out the acquisition.”

This clause allowed the collector to “take possession of the land within fifteen days of giving notice”. He could take possession of a building within 48 hours of giving notice. “The Outer Ring Road Project of Hyderabad and the Expressway in Uttar Pradesh are both striking (and recent) examples of acquisitions where large tracts fell pray to the urgency clause,” write Ramesh and Khan.

Given this, it was only right that the 1894 Land Acquisition Act was done away with. In fact, it should have been done away with long before it finally was.  The trouble is that the 2013 Act that replaced it, as I said was at the other extreme, and made the process of land acquisition next to impossible.

In fact, Ramesh and Khan even write: “The law was drafted with the intention to discourage land acquisition. It was drafted so that land acquisition would become a route of last resort.” Ramesh was one of the key movers behind the 2013 Act. Economist Rajiv Kumar estimated that it could take more than four years to acquire land, if all the processes were followed.

The Modi government tried to dilute the provisions of the 2013 Act and brought in the 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. It made some changes to the 2013 Act.

As Anand Ranganathan wrote in a column on www.newslaundry.com: “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 was a step in the right direction. In the months to come a lot of noise was made around how land would be taken away from farmers and be handed over to corporates. This was totally incorrect. As Rajiv Kumar pointed out in a column in The Economic Times: “As many as 59% of rural households do not own any land. Another 28% have land holdings of less than 0.5 hectares. Therefore, 87% of the rural population is desperate to end their dependence on agriculture.
Only 0.5% of India’s farmers have land holdings larger than 10 hectares and in the vicinity of urban centres. They are the only ones who could be adversely affected by the proposed amendments to [Land Acquisition Act].”

But this was a point that the government did not manage to communicate to the people of this country. Narendra Modi addressed the issue in one of his mann ki baat programmes but there never really any follow up to that. Finally, the rhetoric against the ordinance unleashed by the Congress party seems to have gained credibility.

This probably explains the decision of the Modi government to go back to the 2013 Law. Further, there is an assembly election scheduled in Bihar later this year and this could have become a huge issue. Bihar is very important for the Modi government given that it elects 16 members to the Rajya Sabha, where the Bhartiya Janata Party does not have a majority. And the only way to get partymen elected to the Rajya Sabha is to first win the assembly election. Also, the Bihar election will decide if the Modi magic still persists. Given these factors, the land acquisition ordinance will be given a burial, at least for the time being.

One of the face saving gestures that has been put forward is that the states can go in for their own land acquisition laws. But what needs to be kept in mind is the fact that a state law cannot go against the central law. If there is a conflict between the two laws, the central law prevails.

Also, states cannot dilute the provisions in the central law. As Jairam Ramesh told Scroll.in: “For instance, if the central stipulates that consent of 80% of landowners be obtained, the states cannot reduce it to 70% but they can make it 90%…They can’t even do away with the consent clause.”

What this means is that the states cannot come up with a law which is radically different from the 2013 Land Acquisition Act. And this means that the land acquisition process for the setting up of industry and for building public infrastructure will continue to remain at a standstill.

The column originally appeared on The Daily Reckoning on Aug 6, 2015

Land acquisition mess: Will the real Narendra Modi please stand up?

narendra_modiVivek Kaul

The Narendra Modi government seems to have agreed to drop the politically unpopular clauses in the Bhartiya Janata Party’s version of the land acquisition bill. This is not a move in the right direction.

One of the key planks of Narendra Modi’s electoral campaign for the 2014 Lok Sabha elections was economic development and job creation. In a country where most electoral rhetoric has been based around “garibi hatao”, this was like a breath of fresh air.

And given that 13 million Indians are entering the job market every year, creation of new jobs should be one of the top priorities of any government.
What also needs to kept in mind is the fact that the average holding size of agricultural land has come down over the years.  As per Agriculture Census 2010-11, small and marginal holdings of less than 2 hectare account for 85 per cent of the total operational holdings and 44 per cent of the total operated area. This could have only gotten worse since 2010-11. And what this means people need to be moved away from agriculture into other areas where they can make a living.
How does a country like India create jobs? As Cambridge University economist Ha-Joon Chang writes in Bad Samaritans—The Guilty Secrets of Rich Nations & the Threat to Global Prosperity: “History has repeatedly shown that the single most important thing that distinguishes rich countries from poor ones is basically their higher capabilities in manufacturing, where productivity is generally higher, and more importantly, where productivity tends to grow faster than agriculture and services.”

An important part of building a vibrant manufacturing sector is the ease with which land can be acquired. Over and above this, the quality of physical infrastructure (roads, railways, ports etc.) in India remain abysmal. If this infrastructure has to improve, the ease of land acquisition remains very important.
Narendra Modi became the prime minister of India on May 26, 2014. One of the things he did at the very beginning was to try and figure out what were the factors holding back investment in India. The answer that he got was the Land Acquisition Act of 2013 was one of the key reasons holding back investment.

In fact, the latest economic survey released in February earlier this year pointed out that “land acquisition” was a top reason for 161 stalled government projects. The Survey also pointed out: “India’s recent PPP [public-private partnership] experience has demonstrated that given weak institutions, the private sector taking on project implementation risks involves costs (delays in land acquisition, environmental clearances, and variability of input supplies, etc.).”

Arvind Panagarya the vice-chairman of the NITI Aayog in a recent speech said: “The Land Act, 2013 is an onerous Act under which by all calculations it will take up to five years for acquiring land assuming that all steps progress smoothly,” Panagariya said.

The question is what led to the Land Acquisition Act 2013? Before 2013, the process of land acquisition in India was governed by the Land Acquisition Act 1894. This was a law introduced during the time when the British ruled India and it managed to survive for more than 65 years after India attained independence from the British in 1947.

Given that the law was passed during British times it essentially ensured that the government could acquire land for almost any purpose and pay a pittance for it. As Jairam Ramesh and Muhammed Ali Khan write in Legislating for Justice—The Making of the 2013 Land Acquisition Law: “The 1894 Act was a comparatively short legislation that left much to the discretion of the acquiring authorities.”

The government basically acquires land from the public for what it calls “public purpose”. Given this, it is very important to define the term public purpose properly. But as Ramesh and Khan write: “‘Public Purpose’ which was the raison d’etre for any acquisition initiated was drafted in such wide terms that essentially any activity could be constituted as public purpose, as long as the Collector [of the district where the land was being acquired] felt it did…’Public

Purpose’ became what ever the Government or acquiring authority defined it to include.”
And if this wasn’t enough, a 1984 amendment to the 1894 Act allowed the government to “acquire lands for a public purpose ‘or for a private company’”. So, as per the 1894 Act the government could acquire land even for a private company. This clause was at the heart of the nexus that evolved between builders and politicians, over the years.

Given this, such a law had to be done away with it. This finally happened in 2013. The land acquisition law that was brought in was towards the other extreme, and seems to have made land acquisition almost next to impossible. (For those interested in the entire procedure, they should read Ramesh and Khan’s book, to realise how complicated and time taking the 2013 law is).

The 2013 law calls for consent from 70% of families in case of public private partnership projects and 80% if the land is being acquired for a private company. A social impact assessment also needs to be carried out. This assessment needs to answer questions like whether the “proposed acquisition serves public purpose” and “whether land acquisition at an alternate place has been considered and found not feasible”.

As mentioned earlier, after coming to power, the Modi government figured out that land acquisition law of 2013 was acting as a substantially barrier to investment. It 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. As Swaminathan Aiyar writes in a column in The Economic Times: “It substantially diluted the clauses relating to a social impact assessment and consent of 70-80% of people affected. It provided exemptions for 1 km on either side of railway and industrial corridors, rural infrastructure, affordable housing, and PPP infrastructure projects.”

This was a step in the right direction to get investment going again. Land required for the defence, electrification, affordable housing, and industrial corridors etc., also needed to be made available as soon as possible. Also, Ramesh and Khan write: “The law was drafted with the intention to discourage land acquisition.

It was drafted so that land acquisition would become a route of last resort.” Ramesh was a key player behind the Act.
A land acquisition Act which discourages land acquisition cannot be of much help to an economy which needs to create jobs for 13 million individuals entering the work force every year.

Now with the government planning to go back to the 2013 law the status quo will return. If Arvind Panagariya is right in estimating that it will take five years to acquire land then there is no way that the Narendra Modi government is going to get around to delivering its promise on creating jobs and economic development.

Also, Modi’s pet “Make in India” programme is unlikely to get anywhere. You can’t make in India without being able to get land to set up the necessary infrastructure.

Aiyar summarised it the best when he said: “[Modi] seems happier coining slogans than in implementing tough decisions.” Tough decisions on the economic front is what this country needed. Alas, it is not going to get them even under Modi, who for a while flattered to deceive. And by the time the 2019 Lok Sabha election is here, “garibi hatao” might be the order of the day again.

It is worth asking here, if the plank of economic development and jobs, was also an electoral jumla? From how things are going right now, that is how it seems like.

To conclude, the Narendra Modi that we saw in the run-up to the 2014 Lok Sabha elections was a different man, from the Narendra Modi we are seeing now. Will the real Narendra Modi please stand up?

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)
The column originally appeared on Firstpost on Aug 5, 2015

Why Jairam Ramesh’s new book on land acquisition is a must read for Rahul Gandhi

Jairam_ramesh

Jairam Ramesh was the minister of rural development between July 2011 and May 2014. He was instrumental in getting the new land acquisition law drafted and passed in 2013. And now he has written a book documenting this experience.
The book is titled Legislating for Justice—The Making of the 2013 Land Acquisition Law. Ramesh has co-authored this book along with Muhammad Ali Khan, who worked with Ramesh as an officer on special duty in the rural development ministry.
The book goes into great detail on why India needed a new land acquisition law. And given this, it is a must read for Rahul Gandhi, the vice-president of the Congress party, who has recently been ranting against the changes that the Narendra Modi government is trying to bring to the land acquisition law passed in 2013.
Before the 2013 land acquisition law was passed, land acquisition in India was governed by the Land Acquisition Act 1894—a law from the time when the British ruled India. And rather surprisingly it survived for close to 66 years after India achieved independence from the British in 1947.
The 1894 Act was loaded totally in favour of the government and made it very easy for the government to acquire land as and when it wanted to. This wasn’t surprising given that it was drafted in 1894, when the British ruled India and the rights of Indians were not really top of the British agenda. As Ramesh and Khan write: “The 1894 Act was a comparatively short legislation that left much to the discretion of the acquiring authorities.”
Take the case of the phrase “public purpose,” which is the basic reason why any government acquires (or at least should acquire) land from its citizens. It is very important to define the term properly. Nevertheless, as Ramesh and Khan write: “’Public Purpose’ which was the raison d’etre for any acquisition initiated was drafted in such wide terms that essentially any activity could be constituted as public purpose, as long as the Collector [of the district where the land was being acquired] felt it did…’Public Purpose’ became what ever the Government or acquiring authority defined it to include.”
In fact, in a 1984 amendment expanded the government’s ability to “acquire lands for a public purpose ‘or for a private company’”. Yes, you read that right. And which party was in power in 1984? The Congress party. This amendment allowed the government to acquire land from farmers at cheap rates and then sell it on to private companies at a significantly higher price.
The ‘Yamuna Expressway’ is a very good example of this, where the land was acquired by the Uttar Pradesh from farmers and then sold on to private parties at multiple times the price the farmers had been paid for it.
The 1894 Act also had an ‘urgency’ clause. As Ramesh and Khan write: “Section 17 of the Land Acquisition Act, 1894 was used to forcibly disposes people of their land in a frequent and brutal fashion by suspending the requirement for due process…Section 5A…allowed for a hearing of objections to be made but put no responsibility on the Collector to take those claims into consideration.”
So people could complain, but it was up to the Collector whether he wanted to listen to them or not. Further, like was the case with the definition of public purpose, the definition of urgency was also left “to the authority carrying out the acquisition.”
This clause allowed the collector to “take possession of the land within fifteen days of giving notice”. He could take possession of a building within 48 hours of giving notice. “The Outer Ring Road Project of Hyderabad and the Expressway in Uttar Pradesh are both striking(and recent) examples of acquisitions where large tracts fell pray to the urgency clause,” write Ramesh and Khan.
Further, land acquisition displaced many people over the decades and most of them were not resettled and left to fend for themselves. “While there is no comprehensive record of how many individuals have actually been displaced by land acquisition post-independence, estimates put forth by credible studies find that close to 60 million individuals have been displaced since independence. Worse still, only about a third of these have actually seen some measure of resettlement and rehabilitation,” write Ramesh and Khan. Further, the studies that Ramesh and Khan refer to are more than a decade old. Hence, the number of displaced is likely to be higher than 60 million.
The question is who is to be blamed for this? The Congress party, which ruled the country in every decade after independence. Why did it take them more than 60 years to wake up to this and do something about it. The only possible explanation is that the Congress politicians ‘privately’ gained from the law as it was.
And given this, Rahul Gandhi’s recent holier than thou attitude on “land acquisition,” doesn’t cut any ice. The Congress party is responsible for the land acquisition mess that prevails in this country as of today.
Getting back to the land acquisition law of 2013, it is only fair to say that India needed a proper land acquisition law which wasn’t loaded totally in favour of the government. The trouble is now we have a law which makes land acquisition extremely complicated and next to impossible. A reading of Ramesh and Khan’s book makes that extremely clear.
In fact, the authors even write: “The law was drafted with the intention to discourage land acquisition. It was drafted so that land acquisition would become a route of last resort.”
For a country which has nearly 13 million people entering the workforce every year and which has aspirations of “making things,” a law which discourages acquisition of land really cannot hold. No country has gone from being developing to being developed without the expansion and success of its manufacturing sector.
As Cambridge University economist Ha-Joon Chang writes in Bad Samaritans—The Guilty Secrets of Rich Nations & the Threat to Global Prosperity: “History has repeatedly shown that the single most important thing that distinguishes rich countries from poor ones is basically their higher capabilities in manufacturing, where productivity is generally higher, and more importantly, where productivity tends to grow faster than agriculture and services.”
And in the long run the ease of land acquisition remains an important input for the manufacturing sector to take off. It also remains a very important area if the physical infrastructure in this country needs to improve. Having said that, it does not mean that land should be taken over on a platter.
In fact, as the Economic Survey points out “land acquisition” was a top reason for 161 stalled government projects. The Survey also pointed out: “India’s recent PPP[public-private partnership] experience has demonstrated that given weak institutions, the private sector taking on project implementation risks involves costs (delays in land acquisition, environmental clearances, and variability of input supplies, etc.).”
Hence, we need to take a middle path on land acquisition.

(The column appeared originally on Firstpost on May 26, 2015)