Even while the provisions of the Land Acquisition Act [LAA] brought by the then UPA – government in 2013 were being debated, some sections including chief ministers from Congress ruled states had expressed serious concerns over its efficacy in ensuring smooth acquisition of land. After the Act came in to force from January 1, 2014, those apprehensions came true as during the 18 months since then, only a few hundred acres of land has been acquired.
Meanwhile, in a meeting convened by Nitin Gadkari [then in charge of rural development ministry] on June 26, 2014, majority of the states and union territories including from Congress ruled states viz., Karnataka, Kerala, Maharashtra and Haryana had pressed for deletion of the “consent” and “social impact assessment [SIA]” clauses which they strongly felt were main bottlenecks in the way of land acquisition under the Act.
Accordingly, Modi – governments came up with amendments [these focussed primarily on dispensing “consent” and “SIA” clauses for 5 project categories of national importance] which were given effect vide promulgation of an ordinance in December, 2014. This has since been re-promulgated twice as the passage of the amendment bill is stuck in the parliament; courtesy, opposition by Congress and other parties in Rajya Sabha [upper house] where the ruling BJP is in minority.
In the last session, the bill was referred to a joint committee of the parliament which was expected to submit its report at the commencement of monsoon session on July 21, 2015. However, the committee has asked for more time and it is unlikely that report will be available before the session ends. Meanwhile, with mounting opposition from more quarters including from within the ranks of BJP, the chances of amendments getting through have dimmed.
In this backdrop and continuing uncertainty surrounding the availability of much needed land for development and building infrastructure [a major plank on which 1.25 billion people gave a resounding mandate to Modi], some thinkers in the ruling establishment are looking for alternatives. One such alternative advocated by Dr Arvind Panagariya, vice-chairman, NITI Aayog is to ask state governments to relax their land use laws.
Dr Panagariya has suggested that the state governments should amend laws to provide for the possibility of farmers giving their land on long-term lease [instead of outright acquisition] for industrial use and building infrastructure. He has also recommended that extant rules for ‘approving changes in land use’ be streamlined to expedite the process of making land available to project proponents.
There can be no disagreement over his second proposal. Considering that the extant arrangements in majority of the states are riddled with cumbersome procedures, multiple layers of approvals, administrative inefficiency, sloth and endemic corruption at every level, there is an urgent need for a metaphorical change in the systems. This in turn, will require a complete overhauling of governance culture to speed up delivery of services. However, the first idea of giving land on long-term lease is flawed.
It involves giving land to projects on lease for say 33 years, 50 years or 99 years [depending on nature of project and location specific situation] even as title remains vested with farmer/owner. The land owners may be given a down payment followed by annual rent [known as ‘annuity’ in common parlance] during the period of lease. To give additional comfort to owner, this model also allows for re-negotiation of terms viz., lease period and annuity amount taking in to account prevailing market scenario.
The protagonists of this approach argue that as time passes with industrial development and urbanization, the market value of the land increases and the owner would be deprived of the benefit if the contract terms are not revised to capture the changed situation. However, what they often forget is that the appreciation in value is primarily because of the investments made in projects; sans such investment and resultant development in the area, any talk of increase in value is academic.
The proposal is dangerous and will knock at the very foundation of strategic projects of national importance. In order to be able to successfully execute and run projects for building roads, highways, bridges, rails, power transmission lines, gas pipelines, irrigation networks, ports, defence establishments etc, the government must have in its possession requisite acreage of land. A foremost and fundamental requirement in this regard is that state must have clear ownership of land free from all encumbrances.
Now, if such projects are built on land that is taken on lease from tens of thousands of owners/farmers [who shall continue to be the owner all through the life of the project], the aforementioned requirement of state having a clear title is not met. In the absence of a clear title [free from all incursions], the project will be rendered vulnerable from the day one. Additionally, by providing for change in the terms viz., annuity amount et al at future points of time, the vulnerability will be further accentuated.
Look at the humongous implications if at the end of every 10 years or 15 years, the government is required to re-negotiate contract terms with those very tens and thousands of land owners. What if they do not agree to proposed new terms? What if their own assessment about the market value and annuity is differs vastly from that of government? What if some of them decide not to continue the lease? These are mind-boggling imponderables and will only end up jeopardizing the existence of the project.
The very idea of giving land on lease is preposterous as it compromises on national interest for the sake of giving extra comfort to land owners. It smacks of a very self-centered approach whereby people want government to provide access to all public services [roads, highways, irrigation, power, schools, hospitals etc] at affordable prices and even free but, they are un-willing to part with land, a basic requirement for creating these facilities.
It is ironical when it comes to an industrial plot [or a flat in group housing society], a person is always keen to convert lease-hold ion to free-hold so that he has un-encumbered rights for an infinite period [in many cases, governments have even obliged] but won’t let this happen for a project of common good say a road or hospital that has the potential of benefiting tens of thousands of persons. Why such double standards?
Under Jawaharlal Nehru and Indira Gandhi regime, land was taken away from owners/farmers for national projects by paying almost nothing [under subsequent dispensations, there are examples galore of land acquired using dubious means and given to private persons for a song]. That was one extreme highly exploitative and detrimental to farmers, courtesy the archaic Land Act of 1894. Now, by adopting flawed mechanisms like land leasing, we could be moving the pendulum to the other extreme where crucial projects for development, infrastructure and for welfare of public at large would face a Damocles sword hanging all through their life.
Such a model may not even do good to farmers for whom it is intended. Apart from lot of uncertainty surrounding such deals [each time the terms come up for re-negotiation], the very act of writing contracts for enforcing the intended lease arrangement could implant fear in their mind that this could be used for appropriating his land at some future point of time. Dr Pangariya himself has alluded to such a possibility. So, his proposition neither helps the project proponent, nor farmer/owner and not even the government.
The trigger for the idea is the “consent” clause in LAA [2013] which Modi – government does not want to apply to 5 project categories of national importance but is facing opposition. The question of consent inevitably crops up in cases of land acquisition. If, you wish to acquire land, the consent of seller is a pre-requisite. However, in case acquisition is by the state for projects of national/strategic importance, this requirement can be done away.
All along in the past until 2013, land was acquired on this very premise, when suddenly erstwhile UPA – government [with an eye on elections] introduced the land acquisition bill to provide for consent of 70% of affected families in case of public-private projects [80% for private] and making SIA mandatory. The idea was flawed. While, it may carry emotional appeal with farmers, this was a surest way to kill land acquisition as getting consent of such a large number is next to impossible [though the Act provides for handsome compensation besides rehabilitation and resettlement, all that is meaningless if acquisition does not materialize]. Modi is trying to undo this damage but the opposition parties are not letting that happen.
Dr Panagariya’s idea for long-term lease is a response and an attempt to get over the stalemate as under such an arrangement, there is no need for consent as ownership remains with farmer. But, it is a dangerous idea; some one wanting to set up a private factory would wish to first own land with a clear title [free from all encumbrances] and here we want to put big national projects at stake by letting ownership remain with tens of thousands of persons. The powers that be should not even look at it.
Modi – government’s land bill strikes a judicious blend between legitimate needs of ‘strategically’ important projects on one hand and farmers/owners interest on the other. This needs to be vigorously pursued. If efforts do not succeed at the national level [that could be a likely scenario], then BJP ruled states should go ahead using centre’s bill as a model law. In due course, seeing good results in terms of speedy development, increase in jobs, income and better quality of life, others will have no option but to follow suit.