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Why Centre should leave land to the states

A state-centric strategy on land acquisition will permit a more nuanced approach. It will also promote competitive federalism.

Written by Rajiv Kumar |
Updated: August 24, 2015 12:18:57 am
Narendra Modi, Prime Minister Narendra Modi, PM Narendra Modi, Land bill, Right to Fair Compensation and Transparency in Land Acquisition, Land Acquisition, Land Acquisition bill, Rehabilitation and Resettlement Act, LARR bill, Indian express, express column The reasons that impelled the Modi-Arun Jaitley-Nitin Gadkari team to rush into amending the LARR without the necessary political preparations on the ground are not clear. (Illustratiojn by: C R Sasikumar)

Legend has it that, when faced with adversity in his battle against Jarasandha, Lord Krishna fled from the battlefield, which earned him the name of “ranchordas”. Later, Krishna returned to defeat and annihilate Jarasandha. Given his deep knowledge of the Mahabharata and Chanakyaniti, Prime Minister Narendra Modi should be expected to behave strategically on the issue of amending the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (LARR) and, as per the repeated advice of these two classics, not stand on petty ego or false pride. So, we should not be surprised about the BJP’s climbdown on the land acquisition amendments. Perhaps Modi knows when to retreat and regroup to try again with better preparation and a different strategy.

The new strategy could possibly take two forms: First, Modi could manage to convince the UPA’s principal protagonist on the LARR to cross over to his side and lead the charge against those opposing the amendments that the government had proposed. Stranger things have happened in Indian politics. The person concerned, it is said, was open to joining a BJP-led government in the past and could surely reconsider the option. We are in a world where ideals and ideology are considered unnecessary baggage that come in the way of “serving the country”. The second approach could be to give the state governments the responsibility to take the amendments forward. We elaborate on this below and hope that Modi will adopt this latter strategy.

The question, however, must arise that if the government has acceded to the retention of the consent clause as well as to the inclusion of the social impact assessments, then is there any real purpose in amending the existing act? Rather than beat a retreat across the board, it may well be politically pragmatic and more efficient to leave the LARR as it is and let the states carry on with the amendments they deem to be necessary and doable.

The Centre could simply abdicate its role in amending the act on the grounds that under the Constitution, land is principally a state subject. Issues relating to this critical factor of production (necessary terminology to take away the emotions attached to it) should be covered by state-specific legislation that takes into account the particular circumstance of the state.

The states reflect a very broad spectrum of geographic, economic and cultural diversity. This state-centric strategy would not only permit a far more nuanced approach towards this important issue but will also promote “competitive federalism”. Progressive states that pass a suitably amended law will benefit from greater investment activity, employment-generation and rapid growth. Others will likely follow suit, and although it will take longer for all the states to come on board, the route of state legislation for land acquisition makes eminent sense in as diverse and complex an economy as ours. States will find it more convenient and practical to adopt “self-designed” land acquisition laws and not be seen to be following a fiat from the Central government.

The reasons that impelled the Modi-Arun Jaitley-Nitin Gadkari team to rush into amending the LARR without the necessary political preparations on the ground are not clear. There was hardly any urgency. The necessary political preparation involves winning the trust of the farmers by assuring them that the state is not after expropriation and will not leave them behind in the development journey. At present, a very large majority of the farming community in India looks at the state with deep suspicion and does not trust it to safeguard its interests. That is the reason that it is seen to be relatively easy to mobilise farmers against any ruling dispensation in Delhi. The possible impact of a move that was seen as “anti-farmer” on the Bihar election outcomes may well have persuaded Modi to jettison the amendments from his agenda at this stage.

It is critical to rebuild trust between farmers and government. This can be done in three simple steps: First, by asking all state governments to draw up a comprehensive district-wise catalogue of land that is already under government/ public-sector ownership and using this for infrastructure and manufacturing projects before acquiring additional land. Second, to make compensation a two-part process by paying part of the price of the land being acquired (four times the market or registered value) up front and converting the remainder, perhaps an equal or smaller part, into project equity, whose value could be expected to rise over time. This approach will surely convince farmers that their interests are being looked after as the economy is modernised and urbanised. Third, to complete the digitisation of land records as quickly as possible because that will make land conversion and sales far more transparent, unlike the black box they are at present. The black box only favours those who want to unfairly expropriate from farmers.

The land acquisition process, it is well established, hardly affects 10 per cent of the rural population. The recently released Socio-Economic and Caste Census reinforces the fact that land ownership is highly skewed and the majority of the rural population does not “live off the land”. Those affected are restricted to a tiny fraction of large landowners whose holdings are in proximity to existing or upcoming urban/ industrial centres. One has to believe that individual state governments have the capabilities to ensure the cooperation of this tiny minority and not allow it to vitiate the entire development/ modernisation process. Having tested the ground reality, it is time that we give up on the idea of a national policy for land resources, and instead let the states take it forward.

The writer is senior fellow, Centre for Policy Research, New Delhi, and founder director, Pahle India Foundation.

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