Marking Out The Margins

It was an astounding admission. In 2012, a parliamentary committee on rural development, headed by Sumitra Mahajan (then a BJP MP, now the Lok Sabha Speaker), recorded that the UPA government of the time had said there was no “official data base” of land acquired by the State since independence. The government also said it had no data on people displaced when the State made them part with their land. Such a blatant claim could only have been made by an inefficient, irresponsible or corrupt government. Successive Congress governments at the Centre have clearly been the main culprits. In 2013, the Congress tried to make amends with a more progressive legislation, helped in no small measure by the committee Sumitra Mahajan headed. Now, she sees her BJP bent upon diluting the provisions of a law it had helped frame. The reasoning is not far to seek: if Congress governments could plunder land for over 60 years, shouldn’t the NDA government get an equal opportunity to do so when it is in power?

Frustrated by the UPA government’s throwing up of hands, Sumitra Mahajan’s committee used inputs from unofficial studies and an expert group of the Planning Commission to estimate that, since 1947:

• 25 million hectares (some 6.1 crore acres) had been acquired

• 60 million (or six crore) people had been displaced

• 40 per cent of those displaced were tribals, 20 per cent Dalits and 20 per cent from the other backward classes (OBCs)

The committee highlighted the fact that in America and the European Union, the State never acquired land for private business. In 2006, US President George Bush had issued an executive order to reassert that the State would not take over land for private companies. The European Union has no provision for such acquisition. In Canada, the State can acquire land, but not to further the commercial interests of private companies. In Japan, land for the Narita international airport was purchased through long and elaborate negotiations with landowners.

While the committee helped finalise the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Act (also known as the LARR Act or the Land Acquisition Act of 2013), as Speaker, Sumitra Mahajan last year found herself presiding over a Lok Sabha session in which a much-diluted law introduced by the Narendra Modi government was passed, undoing much of her committee’s work. The NDA’s bill, however, is stuck in the Rajya Sabha, where it does not have a majority.

Ahead of the committee report, the Economic & Political Weekly published a paper by Prof Ram Singh of Delhi University showing that government-driven land acquisition had been “inefficient, unfair and prone to litigation”. He studied 525 judgements in additional district judge courts in the national capital delivered between 2008 and 2010. He also studied 305 judgments of the Punjab and Haryana High Court since 2009 and found that in an overwhelming number (86 per cent in lower courts, 97 per cent in the high court) the judges ordered payment of higher compensation.

***

Suit, Boot And The Loot

What  the numbers tell us about the mismatch in the land acquisition debate

• The State
  6.1 crore acres of land acquired by the Indian state since 1947, displacing over 60 million people; 40% of those displaced are tribals, 20% Dalits and 20% OBCs 

• Elsewhere
  In the United States, European Union countries, Canada and Japan, the government does not play the role of a broker in the acquisition of land for private companies to set up shop

• States
  Five states (Maharashtra, AP, UP, Rajasthan and Gujarat) acquired 5.72 lakh acres since their inception. As of Dec 2014, 2.55 lakh acres or 45% of the land not allotted to any industry.

• Industry
  Maharashtra had an un-allotted land bank of 1,00,000 acres in 2014 December; Gujarat Industrial Development Corporation had over 50,000 acres. In 2012, AP similarly held 73,000 acres.

• Corporates
  Godrej group sitting on 2,800 acres in Mumbai, largely unused. Infosys owns 1.4 sq km of unused land in Bangalore. Only 13% of projects worth over Rs 1,000 crore stalled for land problems.

• SEZs
  1,50,000 acres acquired between 2006 and 2013 for SEZs. Fourteen per cent of land acquired for SEZs diverted for commercial use. Only 152 of the 576 SEZs are operational in 2013.

• Land Banks
  45 lakh acres of surplus land held by public sector undertakings; 2,65,000 acres with defence forces; 2,58,000 acres held by ports; 50,000 acres by airport authorities.

• Waste Land
  In 2014, India had approximately 40 million hectares of wasteland, down from 55 million in 2003 (barren, degraded forest, waterlogged, upland, steep sloped etc)

• Employment
  Industry’s share in GDP in 2014 at 21.5% was higher than 13.5% of agriculture. But agriculture continues to employ 50% of the population while industries employ only 20%.

Sources: Parliamentary Notings; Deloitte & Touche, Price Waterhouse Cooper, Vijay Kelkar Report; NDTV; other reports

***

Since land is a subject on the concurrent list, state governments have also built up huge land banks. A Comptroller & Auditor General (CAG) of India report of 2014 gave damning insight into how Orissa acquired land from 2001-12. The state’s Industrial Infrastructure Deve­l­opment Corporation (IIDCO) had conferred mortgage rights to 19 companies. These companies pledged the land allotted to them to raise loans of Rs 75,000 crore. It was found that the companies­—not the government—had selected the land to be acquired, allowing them to choose land in locations that might prove profitable in the long run. Examples abound. In 2007, the Y.S. Rajasekhara Reddy-led Congress government in Andhra Pradesh allotted 10,760 acres to the controversial Reddy brothers of Bellary. Mortgaging part of the land, for which they had paid Rs 18 crore, the Bellary brothers raised Rs 350 crore in bank loans. Eventually, the allotment was cancelled (by the Kiran Reddy government) in 2013, when the Reddy brothers were in jail.

Governments don’t believe they are bound by laws. The CAG report, for example, found that the Orissa government invoked “emergency provisions” to acquire several thousand acres. Emergencies were defined in law as projects that needed to be completed in six months. But the state government in fact took 6-34 months to acquire the land and then let it remain unused for several years—at least till the time of the CAG audit, in March 2013.

Another classic case. In 1956, the Bihar government acquired 257 acres for a seed farm in Ranchi. Compensation was fixed at Rs 2,700 per acre. A handful of the farmers accepted it, but most of them refused. So the government deposited Rs 1.5 lakh or so in the treasury as compensation in the names of those who had refused to accept it. This is one of the ways governments make land acquisition a fait accompli. Fifty-five years later, the government of the new state of Jharkhand tried to take over the land for a proposed law university and an Indian Institute of Management. This led to violent clashes as farmers protested, for by this time, the cost of an acre had gone up to Rs 1.5 crore and the farmers had been fobbed off with peanuts.

It’s hardly a secret that land records are in a mess. Good governance would require that the Centre pay the states to digitise land records, and more important, standardise and update them, a much overdue reform. But the process has been agonisingly slow because it suits both politicians and bureaucrats to keep land records and allotments opaque.

Following the abolition of zamindari in the fifties, the Tatas were allowed a 40-year lease for Jamshedpur. While the lease expired in 1995, a fresh lease was signed in 2005. A  Mumbai-datelined report in the Economic Times (September 4, 2002) quoted unnamed sources as confirming that the Tatas would be paying lease rent at the rate of “Rs 30 lakh per acre”. But the website of a BJP minister in Jharkhand (saryuroy.in) indicated that in 2005, the industrial house and the state government had agreed to a lease rent of less than Rs 6 lakh for 6,000 acres. To put it in perspective, the Delhi Golf Club pays a lease rent of Rs 5.79 lakh for as less as 180 acres. No details are available for over 4,000 acres in Jamshedpur that the company had ‘sub-leased’—obviously without profits.

Governments, chief ministers—and now the prime minister—no doubt want to exercise unbridled power to acquire and allot land and resources. Bloomberg reported last year how it took Narendra Modi as Gujarat chief minister just 72 hours to arrange land, power, tax exemptions, a four-lane highway and a loan of Rs 9,000 crore and more for Tata to start building the Nano at a plant in Sanand, a drive of an hour or two from Ahmedabad. The report quoted anonymous sources because “details aren’t public”. Even the Left Front government of West Bengal had refused to divulge details of the deal it had offered the house of Tatas to put up the plant at Singur.

Such arbitrary powers, and power to withhold details from the public, were sought to be curbed by the LARR Act. Provisions were included to ensure that the consent of the landowners is obtained and the land returned if projects do not come up within five years. The Act also provided for rehabilitation and resettlement of even landless labourers and artisans affected by the acquisition.

These are precisely provisions that the BJP and most of the state governments want to be dropped or diluted. Not surprisingly, virtually all state governments are unanimous on this point.  They have also officially registered their opposition to penal clauses in LARR that seek to make bureaucrats accountable for lapses, mistakes and delays. They also want the freedom to acquire multi-cropped land restored.

Available data show that both public sector units and private companies have sought, and often received, huge chunks of land from the government. The Adani Port SEZ in Kutch is spread over 15,000 acres and it is a matter of record that Reliance wanted 35,000 acres in Navi Mumbai. Their hunger for land, which is finite and scarce, is explained away by their desire to provide for future expansions and acquire land before prices escalate.

The industry’s share in the GDP in 2014 at 21.5 per cent was higher than the 13.5 per cent of agriculture. But agriculture continued to provide employment to half the population while industries gave employment to 20 per cent of the people. Independent studies are therefore necessary to assess the impact of acquiring rural or agricultural land for industry. But the Centre and the state governments seem to believe such studies as provided in the LARR Act would be a millstone round their neck and would take too much time.

States do not seem to have any dearth of land, if their own figures are any indication. For example five states (Maharashtra, Andhra Pradesh, Uttar Pradesh, Rajasthan and Gujarat) have acquired 5.72 lakh hectares (1 hectare is roughly 2.4 acres) since inception, but 45 per cent of the land thus acquired had not been allotted to any industrial project till 2014. Only 50 per cent of the Gujarat Industrial Develop­ment Corporation’s land bank of 1,03,784 acres had been allotted for use by industrial units in December 2014.

The Centre for Monitoring Indian Economy (CMIE) Pvt Ltd also indicated in February 2015 that out of 120 projects stalled in the quarter ending December 2014, only 11 were being held up because of problems related to land acquisition. Lack of promoters’ interest, non-availability of raw material or fuel supply, unfavourable market conditions, lack of funds, delay in receiving environmental clearances etc—such were the various reasons being cited for remaining projects not taking off. So it’s not as if problems of land acquisition are holding up the nation’s growth.

There are enough straws in the wind to suggest that the government should confine itself to acquire land for well-defined public purposes and give the LARR Act a chance. But then laws have never kept governments from having their way.

By Uttam Sengupta in New Delhi