Yogi Aggarwal: Managing land is at heart of our emerging economy

The need for land and the struggle to retain it is becoming a major faultline in India. While major development needs like highways, expansion of cities, power, steel and automobile plants need vast amounts of mainly agricultural land, there is also an unpleasant fallout.

Families that have been living off the land, by farming or by forest produce for hundreds of years, face eviction on terms that would reduce them to paupers.

This dilemma and how it is handled is at the heart of the emerging political economy of India. Land is being forcibly acquired for large projects, often at absurdly low rates.

The discretionary power of political rulers to get this land for developers and industry leads to huge unearned profits and feeds corruption on a massive scale, with the gains shared between the political and business class. In effect, a valuable asset is taken from the poor and transferred to the rich and has the “potential for wrecking the social legitimacy of capital.”

Those so impoverished — whether in Orissa, Karnataka, Uttar Pradesh, West Bengal or Maharashtra — rise up in revolt, sometimes violently.

The conflict is partly about the compensation offered. But it is also based on fears about the security that land provides, survival of future generations and making a harsh shift to an unfamiliar lifestyle.

The existing legislation on land acquisition is over a century old and a relic of colonial rule. The government introduced a bill in 2009 but couldn’t get it passed before Parliament was dissolved. Last week it released a Draft Land Acquisition and Rehabilitation & Resettlement Bill, 2011 for discussion and comment.

The draft bill has several commendable features. The most significant of these is that land acquisition is seen in tandem with relief and resettlement (R&R) of those affected. Adequate compensation, if combined with a serious effort to ease those displaced into living in an industrial age, will be the most important factor that could lead to its acceptance.

It wants to ensure a “humane” process so that the affected persons “become partners in development.” It further states that neglect of R&R results from not combining it and land acquisition within one law and that land will not be transferred until R&R is completed.

It claims that in urban areas, the award amount would be not less than twice that of the market value determined, whereas in rural areas it would be not less than six times the original market value and would include assets like trees, wells and buildings.

Further, people who do not own land but make their livelihood from it (like forest dwellers) will also be compensated. While this seems like a positive step, the market value of land is a tricky subject since all land deals have a large cash component not reflected in registered sale deals.

The draft bill sweetens the deal by offering families a subsistence allowance at Rs3,000 per month for 12 months, inflation indexed annuity of Rs2,000 a month for 20 years, a constructed house, a resettlement allowance, mandatory employment for one person per family or Rs2 lakh compensation. To protect tribals, the new bill shall be compliant with laws that protect their rights.

Despite all the progressive elements in the bill, its passage will face immense problems and it is far from certain that it will be accepted by either the politician/developer lobby that gains from land deals and will try and scuttle the bill or the farmers, whose bargaining power varies — large farmers (especially near the metros) have a better capacity than smaller farmers in remote areas.

Though the bill would set a floor, the terms negotiated would depend on the relative strengths of the parties.

The costs for large industry are easily manageable. The Posco steel plant in Orissa, for instance, would cost around Rs60,000 crore. Just 10% of this, if spent wisely on the displaced tribals and on providing the necessary facilities like schools, hospitals, and electricity, would radically improve their lives.

Jobs are another point of contention. The draft bill does not lay enough emphasis on this. In Singur the only jobs offered to those dispossessed was as janitors. While rural families lack the specialised skills to operate modern plants, they can easily be trained for better employment like truck drivers or mechanics.

A steel plant like that of Posco would need tens of thousands of drivers and helpers for the trucks that carry the finished steel to the consumers.

But then that requires political will to ensure such employment goes to the dispossessed. A difficult task given the corrupt nexus that relies so much on extracting the maximum it can from land acquired for projects.

The writer is a commentator on political issues