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Thursday, August 13, 2020

On land,no lessons learnt

The land acquisition bill ignores both the reality of land markets in India and the state’s past record.

Written by Sanjoy Chakravorty | Published: August 30, 2013 12:00:36 am

The land acquisition bill ignores both the reality of land markets in India and the state’s past record.

The Land Acquisition,Rehabilitation and Resettlement Bill,2011,taken up by the Lok Sabha on Thursday,has been through the parliamentary standing committee process and two rounds of amendments,the latest in March 2013. All major parties apparently agree on its key provisions. But if this bill becomes law,it will have consequences beyond anything imagined by its creators. So much so that it is likely that land acquisition itself will end in all of urban and large parts of rural India. In an unexpected affirmation of Karl Marx’s view on capitalism,this bill carries within it the seeds of its own destruction.

This is not hyperbole. The key to this impending disaster is what the bill does with the price of land. It quadruples it in rural areas and doubles it in urban areas. Now,comparing apples to apples,the price of land in India is already the highest in the world. The most expensive land in the country (in south-central Mumbai) is as pricey as the most expensive land almost anywhere (including New York City and Tokyo). The average price of land in Mumbai,Bangalore,Bhopal or Guwahati is significantly higher than in any comparable American city. The price of land on the urban fringe in India is 20 times higher than in America or Europe. The price of rural land in states like Punjab and Haryana is several dozen to several hundred times higher than land with comparable productivity in America or Europe.

If this bill becomes law,it will likely no longer be possible to acquire land in urban India and large parts of rural India that are prosperous and/ or proximate to urban areas — in other words,the very land that is in demand for conversion or acquisition. This is because the bill quadruples or doubles prices that are already the highest in the world and have increased fivefold in the last decade. Once the other provisions of the bill are factored in,such as payment to non-owners and resettlement and rehabilitation,both very good ideas in principle,the price of acquisition will multiply 10 to 25 times or higher from a decade ago. For landowners,this will be a windfall. The rest of society will have to pay for it. This can’t be done. It’s too expensive. States will have to figure out new ways of converting land to other uses,as will private industry. Cities like Mumbai are already unable to acquire land under the existing law. This will put the rest of urban India in the same boat.

On top of these direct price increases will be the indirect or opportunity costs of a new bureaucracy that will have five new authorities,a compulsory social impact assessment process and a referendum process for all acquisitions that involve the private sector. If these seem like justifiable protections to avoid the widespread injustices of past acquisitions,consider the evidence. The vast “land reform” bureaucracies created during the 1950s through the 1970s redistributed less than six per cent of all agricultural land (over one-third of all redistribution happened in Kerala and West Bengal),and led to litigation,cheating,fakery,land fragmentation and corruption. Analysts do not doubt that the net effect for the rural poor,the agricultural sector and the country,has been negative. Is there any reason to think these new bureaucracies will deliver more justice than corruption? Have we not learnt anything?

Nonetheless,the referendum idea has a lot of merit,especially to identify “priceless” lands. But amazingly,the state has absolved itself from any referendum. It applies only to the private sector. This despite the fact that post Independence,well over 90 per cent of all acquired land and affected people have been for state projects in irrigation,transportation,energy and heavy industry.

According to the rural development minister,the private sector has got away with acquiring land too easily for too long. This is true. What is much more true is that it is the state that has got away far too easily for far too long. There is a real history of land acquisition in India. Pretending otherwise doesn’t change that reality. What the pretence does is ensure that the conflicts that have necessitated this new bill will keep flaring up.

This bill will not solve one core problem of identifying “priceless” lands. It will vastly complicate the other core problem of underpayment. One must conclude that the creators and supporters of this bill are either cynically or blissfully ignorant of both the reality of land markets in the country and the state’s own past record on land legislation and acquisition.

The road to hell,they say,is paved with good intentions. I believe the original framers of this bill (the National Advisory Council) had the best of intentions. It is possible that in several parts of deep rural India,this bill may actually be relevant and enhance welfare. However,those are precisely the lands that are not in demand (except for relatively limited uses like mining). In places where the action is — India’s urban and near-urban areas — this bill will have nothing less than a revolutionary effect. It will end eminent domain.

Chakravorty,professor of geography and urban studies at Temple University,US,is author of ‘The Price of Land: Acquisition,Conflict,Consequence’

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