by Mr.N C Saxena, NAC Member
National Advisory
Council (NAC
Member), Mr. N. C. Saxena argues that the law is so cumbersome and time
consuming that neither industry nor landowner will benefit
Fast economic growth
in the past 2 decades has increased demand for land from many sources, like
infrastructure, industry, mining, and urbanisation, including real estate.
Even when these
activities are funded privately &
are driven by profit motive, they serve a social purpose since
employment generation per unit of land is higher for non-agricultural uses than
for agriculture ones.
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| N C Saxena, NAC Member |
Growth through
industrialisation and urbanisation would not only increase labour productivity
but will reduce pressure on farmland by pulling people away from land to
non-farming occupations.
However, acquisition
of land by the government has lately drawn resistance in many cases due to
inadequate & uncertain compensation for the land & loss of livelihoods of the affected people,
as well as due to involuntary displacement without proper rehabilitation.
The 1894 colonial law
has been quite hostile to the interests of the landowner, as it attempts to
make land available to government at a minimal price. So far the practice in
most state governments has been to coerce people to give up their lands by
using the legal powers of eminent domain, and in some cases even through the
use of force. Thus the model followed has been, "let some people lose out
so that others (this includes some enterprising poor too) may gain".
Unfortunately, the
losers tend to be the poorest with little skills, often tribals, who are unable
to negotiate with the market forces and cope with the consequences of their
forced expulsion from land, and end up much worse off than before acquisition.
In this context the
Land Acquisition Bill just passed by the Lok Sabha tries to do justice to the
landowners and those dependent on that land by prescribing that besides
compensation, each affected household is either provided employment, or / given
a monthly sum of Rs. 2,000 for 20 years, or Rs. 5 lakh as a lump sum.
The total cost, which
the industry will bear, will not be more than 2% to 5% of the project cost.
For instance, a 4000 Mw thermal plant would
cost about Rs. 25,000 crore and would displace nearly 250 households. Thus,
earmarking just one per cent of the project cost for acquisition would make
each displaced family a crorepati!
The clause requiring
consent of at least 70% of the project affected people is highly welcome, and
it should not scare industry, as in most cases of mono-cropped agriculture,
farmers themselves are keen to get out of uncertain and risky crop production.
The main concern of
industry should not be the one-time cost but the delay in getting secure
possession over land which causes the escalation in the project cost. A close
examination of the Bill just passed by the Lok Sabha would reveal that
acquisition of even one acre of land would take at least three years and the
proposal will have to pass through about a hundred hands.
The delay is caused
mainly because the Bill seeks to establish several committees adorned by
activists and "experts". To begin with, the social impact assessment
will be carried out by a committee, and its report would be vetted by an Expert
Group.
In addition, there
would be an R & R Committee, of course a state level committee & a
national monitoring committee to pontificate over the reports generated by the
junior committees.
Delays in completing
formalities would also delay payment of compensation, thus harming farmers
& causing uncertainty in their rehabilitation.
Often land values go
up after acquisition and the original owners feel cheated when they find that
their land, after a few years, is being sold for ten times the price that was
paid to them. Therefore, whenever land acquired by the government is
transferred to an individual or a company for a consideration, 20 per cent of
the appreciated value should be given to the original land owner. However,
section 96 of the Bill completely defeats the intention behind the idea of
sharing capital gains with the landowner since payment would be made only when
no development has taken place on such land. The builder can plant one tree on
that land and get away by not paying any capital gains!
A simpler solution
would have been to delegate powers to the Collector to acquire up to 100 acres
of land without committees and without any reference to the state governments.
The Collector would obtain landowners' consent and fix compensation through
negotiations and, thus, make land available to the project in a few months'
time. The new law should have also encouraged industry to buy land directly
from the farmers without involving administration, but section 42 of the Bill
discourages direct purchase where more than 100 acres are needed. Moreover,
such transactions are difficult in central and eastern India where land records
are in a bad shape, and several state-level restrictions exist on land
alienation from tribals. Markets in backward regions do not favour small
farmers because of information asymmetry.
In section 3 (c) (iv)
of the Bill, the word acquisition should have been replaced by
"acquisition and resumption" since forest lands and water bodies,
being government property, are not acquired, these are just resumed. In the
absence of this amendment the poorest people as users of common land and
forests and slum dwellers will be deprived of their livelihoods without any
R&R benefits. This amendment is particularly relevant in view of the state
governments' reluctance to implement the community clauses of the Forest Rights
Act.
Section 94 will hit
the interests of the real estate industry since taking permission from the
government for each sale of plot is not only time-consuming but will encourage
corruption. It should be deleted.
The Bill has ended up
by being both anti-farmer and anti-growth, but it is certainly pro-civil
society and pro-bureaucracy!
The author N. C.
Saxena is a member of the National Advisory Council (NAC)
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