Whose land is it anyway?

One more revolution, please.

The Bharatiya Janata Party (BJP), humbled by a humiliating defeat in the recently concluded Delhi assembly elections, will open the budget session of the parliament today. The party with its allies will present the first full budget. Expectations are high. Among other developments Deepak Parekh, chairman of HDFC, said, “nothing has changed on ground” since the NDA came to power. A long brewing political drama finally climaxed in Bihar. Anna Hazare, the anti-corruption hero of 2013 has threatened to start fresh protests over an amendment to the land acquisition act (2013). The budget session looks set for a high decibel show.

The government, especially the finance minister, has a lot riding on it this time. The industry would expect major reforms and policy changes to make doing business easier (currently India ranks 142, one point above the West Bank and one point below Uzbekistan, in the ease of doing business ranking). The average citizen would expect respite from a high food inflation (currently at around 6%) and the middle class would expect tax rebates. The highly ambitious “make in India” programme of the Prime Minister will see some success if it is backed up by policy reforms and a push in infrastructure development (trucks carrying manufactured goods travel less than 300 km a day, compared to an average of around 600 km in Europe). To come up with a game changing policy to boost manufacturing and reducing food wastage the government has to offer major breakthroughs in building new infrastructure.

To do so the government has to offer land. To build roads, lay electricity transmission lines, widen highways, etc. land will be required. Unlike in China, where land is owned by the government, India cannot simply ask the land owners to move somewhere else. To this effect, the last UPA government brought the land acquisition act (2013) in its final days. The act made provisions for compensating the land owners the tune of four times the value of land. One can debate on “how fair is fair compensation”, given the discrepancy in registered value of land against market value. The act however made it sort of mandatory to have a consensus to acquire land from multiple landowners.

The new government came up with an amendment to the act by means of an ordinance. The highlight of the amendment was to exempt projects related to national security or defence of India, rural infrastructure, affordable housing for the poor, industrial corridors and infrastructure & social infrastructure projects (including PPP) where the land is owned by the government. This essentially means that a consent from the buyers will not be essential for such projects to go ahead. This exemption is not automatic, however and would require a notification from the government. The government has not made any changes to the provisions of compensation to land owners.

Land acquisition has always been a difficult task in India and many projects have suffered due to this. The new airport for Mumbai, POSCO project in Orissa, Nano manufacturing plant in Singur and a twenty years long battle for the Narmada multipurpose project are some such projects. Delays are not just costly for the promoters but to the people too. Loss of potential jobs, economic benefits and general slowdown in poverty eradication, exponential cost overruns are all result of such delays.

In the last few weeks Anna Hazare has warned of a mass protest against the land acquisition bill, which he calls anti-farmer. He however does not sight any specific clause(s) that he thinks is anti-farmer. He has also invited all and sundry to his show of strength, starting today. Other social activists like Medha Patkar of the Narmada Bachao Andolan and Aruna Roy have also jumped in to lend a helping hand. In a recent interview to Firstpost Medha Patkar said she is not anti-development but the ordinance is anti-people, again without sighting specifics in the ordinance, which she thinks are anti-people. The Indian press, which is ever ready to ask “tough questions”, has so far failed to ask even the basic question of “what is anti-farmer in the ordinance?” it seems to rub its hands in glee at the prospect of another “revolution”.

The government should prepare itself to handle the drama waiting to unfold on the streets of Delhi. If one considers the last agitation call given by Anna Hazare, which was an absolute disaster, this movement too might find few takers on the streets. The scene inside the parliament might be different though. The government should come up with some innovative idea to compensate the landowners. The idea behind compensation is not only that of loss of an asset but also that of loss of livelihood. A farmer for example will lose his or her source of livelihood if the land is taken away by the government and hence would need something on top of the compensation. Most projects promise jobs for the landowners, but these may come to naught for various reasons, desired skills being one.

A better idea would be to divide the compensation into two sections. One a lump sum amount and another an annuity against the remaining sum. The lump sum amount can help the farmer in buying land elsewhere or finding alternate means of sustenance and the remaining can provide a fixed, predictable income. Both the chunks of money can be deposited in the bank accounts opened under the Jan Dhan Yojana or in an existing bank account. Landowners who want the entire compensation at once should also be free to have it their way. Such an arrangement will take care of both the immediate needs of the farmer and the question of sustenance at once.

The Patkars and Hazares will always come up to oppose change. The best way to handle them is to defeat them at their own game.

The AAP landslide

Yes, you will all get the freebies

The results for Delhi elections are trickling in for the Bharatiya Janata Party (BJP) and pouring in for the Aam Admi Party (AAP). The early trends suggest a land slide for AAP. Prima facie, it looks like a case of socialist promises of freebies and a negative campaign run by the BJP, winning over everything else. The imminent defeat of the BJP is strikingly similar to the rout faced by the Indian National Congress (INC) in recent Lok Sabha elections. The INC for long thought handouts will win them votes and allies. It miserably failed to gauge the change in public opinion and demography. An aspirational middle class with a demographic bulge was in no mood to fall for utopia. The BJP campaign was carefully planned around the aspirations of an emerging India and the voters rewarded it (though the cart load of scams perpetrated by the INC and its allies contributed to its loss). Just nine months down the line, the BJP seems to have misjudged the voters. It has done an INC.

The huge vote share (more than 50% according to early counting trends), will obviously make the AAP supporters euphoric. They ran a relentless campaign and ensured a massive shift in traditional vote banks. The expectations form the new government are hazy at best. The previous stint of 49 days was a disaster and left Delhi without a government for almost a year. One can only hope that this time around with a decisive mandate, the AAP will deliver some of its promises. Unlike last elections they have refrained from giving deadlines for their promises. This is sensible, especially when realpolitik is a different animal than street politics. The only fear Indian Affairs has is, Arvind Kejriwal turning into a Mamata Banerjee, who still has to come to terms of being a Chief Minister and not a street protestor anymore. Hopefully Kejriwal has learnt his lesson from the 49 days in power.

What was touted as a close contest by the BJP is turning out to be the most disastrous result for them. Kiran bedi, the Chief Ministerial candidate trailing (and probably losing to AAP) talks volumes about the way the party carried out its campaign. Hubris is all one can blame it on. There would be many rounds of postmortem in the BJP war room, blames would be assigned and scapegoats sacrificed. What the party really needs is realigning.  For a start it should avoid doing an “India shining” all over again. The first National Democratic Alliance (NDA) government carried out large scale reforms, fruits of which were reaped by the succeeding United Progressive Alliance (UPA) government.

If the NDA wants to keep its voters in good humour, it should have a two prong strategy. Carry on with the reforms, which will bear fruit in the long run and identify quick-wins at the same time. A nuclear deal or make in India will take their own time, meandering through bureaucracy and the federal structure. The results may not be visible in the next two or three years. The benefits of which, might take even longer to reach the bottom of the pyramid (the most critical section of voters). On the other hand schemes like Jan-Dhan Yojna can be leveraged relatively quickly to show impact on the masses. Though the reform agenda and the social media blitz the government has embarked upon bodes well with the middle class, it has little or no relevance to the masses.

To capture the imagination of the masses, NDA should not get into a populist binge mode. The right approach will be to balance the big ticket reforms with quick-wins. Access to quality education, formal banking, utilities (Water, energy, sanitation) and infrastructure will immediately benefit people even in the remotest of corners. Ensuring teacher attendance, direct cash transfers, holding utility operators accountable and fast tracking infrastructure projects can show results in a short period of time.

The roumours have it that the BJP is struggling with internal dissent. The Modi, Amit shah combine has sure rattled a lot of feathers in the party. Containing the dissent from the sundry sadhus and sadhvis to veterans in the party will not be easy. The rules of the game cannot be changed overnight. Will the NDA learn its lesson from the humiliation in Delhi is yet to be seen. More interesting will be to see how the AAP keeps its socialist promises and how it finds the money despite lowering tax rates.