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| 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.
