Vested interests oppose Land Bill

The gathering storm over the NDA’s bill to amend the Land Acquisition Act is largely posturing… They will try their damnedest to do so what is not in their own states’ interest. A perfect example of cutting the nose to spite the face…

Even the current opposition to the NDA move to ease the land law on five fronts – defence, affordable housing, rural infrastructure, industrial corridors, public-private projects, etc - is a denial of federalism. Leaving the act as it was in 2013 will make it tougher for states to acquire land for infrastructure projects which are vital for growth.

It is important to understand why the original Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act – which is the official name of the Act which the NDA wants to amend – is not what the doctor ordered for India…

Consider the pros of making land acquisitions easier – and who actually benefits from the UPA law. It is certainly not the poor.

First, all politicians love the UPA version of the law for the simple reason that if land acquisition becomes tougher, middlemen and landlords will benefit from the resultant scarcity… It has been estimated that acquiring a large parcel of land under the UPA Act would take four to five years – enough time to make any project unviable as all cost assumptions go for a toss.

Second, the basic purpose of the Act – as its very name suggests - is to ensure fair compensation, rehabilitation and resettlement; none of this is impaired by the NDA’s version of the Act. In fact, by making acquisitions easier, it will be able to make payments quicker to land sellers. The poor will get rehabilitated faster if the deal goes through faster, not by dragging it over five years.

Third, making land available for infrastructure and housing will make jobs grow in rural areas… Fourth, India’s structural problem is that too many people are bottled up in unproductive rural work. Any scheme to get people off the land – even if it happens through compulsory land acquisitions – is thus good for them. The real issue is people’s emotional attachment to land – but this is no different from hanging on to a family heirloom which is of no use to anyone.

Fifth, quicker land acquisition will, in fact, make it easier for farmers to derive more value from land. It is a fallacy to think that land prices can be mandated to rise only through government fiat. (The Land Act mandates paying two times market price for land acquired in urban areas, and four times for land in rural areas.) Land values rise when more land shifts out of agriculture (as is visible in large areas of urban Haryana bordering Delhi), and this cannot happen if the idea is to make acquisitions tougher…

Sixth, the UPA Act’s provision for the return of land in case it is not developed five years after acquisition makes no sense… What I do with what I have bought is my business, not the seller’s…

Seventh, the assumption that giving up fertile land will impact food production is erroneous. It is Luddite thinking. Food production depends on improving agricultural productivity by investing more in it. This calls for land consolidation, mechanised farming, more contract

(or even corporate) farming, use of improved techniques, and introduction of new technology, including genetically-modified seeds, among other things.

It is nobody’s case that the poor farmer must be robbed to feed rapacious corporate greed with cheap land. But it cannot be anyone’s case that the poor must be bound hand-and-foot to underproductive land. Land gets undervalued when too many people are dependent on it. So it is important to get people off land.

By: R Jagannathan