Without land, big projects will not take off.
Trinamool Congress chief Mamata Banerjee must be happy that she has managed to stall the Land Acquisition as well as Rehabilitation and Resettlement Bills in Cabinet, prospective pieces of legislation that would have set the rules for industry to acquire land for large industrial projects. She may not be alone, given the UPA’s stress on fiscal transfers as its preferred route to poverty eradication. The real solution to poverty, however, as anyone with even half an economics degree will tell you, is roads, electricity, industrialisation and urbanisation — look for any country that has all four and the chances are that poverty levels will be low there. That is why it is vital that these two Bills be passed.
Contrary to what Ms Banerjee may profess, the proposed Bills are not anti-people, nor are they designed to help just businessmen. Indeed, as the Prime Minister apparently tried to point out in Cabinet, the two Bills are an improvement on what exists in terms of fairness, while also facilitating industrialisation. The key provision is that any company that wants to set up a large project cannot ask the government to forcibly acquire the land, citing eminent domain; it must first buy 70 per cent of the land required, and do this directly from those who own the land. It is only after this that the state can step in to buy the rest from those holding out, and even here there is the guarantee of a 60 per cent price premium on the average price of the previous three years. In other words, the state will step in only to ensure that a minority does not hold back the wishes of the majority. Also promised is resettlement of the displaced families before the land is taken over, and a social impact assessment if more than a certain number of families are displaced.
One would have expected that the people who might oppose such a stringent law might be those who want to set up projects, because it will make their work infinitely more difficult, and also make land acquisition more costly. Instead of opposing the Bill in its entirety, Ms Banerjee could have argued for better terms on behalf of those she seeks to represent, but she did not do that. For instance, the usual practice is for state governments to first buy the land and then change its land use stipulation; as everyone knows, changing land use from agriculture to industry usually multiplies land value manifold—and so far the benefit of this gift in increased value has gone to companies. Ms Banerjee could have argued that some of this benefit must go to those who are asked to sell their land.
Instead, by blocking these Bills, she has solved nothing. While the two Bills would have forced a better deal for land-owners (ie farmers), their non-passage means that states will rely on an old law that dates back to colonial days, and continue their practice of taking over land without a by-your-leave. It is this policy that caused a backlash and prevented the SEZ policy from taking off, for state governments would simply announce that various tracts were to be taken over for a pittance. Ironically, the states which will suffer the most are the ones with the most poor people. With a few exceptions, in most of the more prosperous states, land acquisition is not as much of a problem. So, it is the poor who need the land acquisition and R&R bills the most, and it is they who have been denied by Ms Banerjee. The people of Singur have already paid the price for following Ms Banerjee; they have lost the Nano project, and with it the prospect of good jobs and spin-off benefits for the local area. Must more people suffer in the same fashion, merely because Ms Banerjee does not want the pitch queered for her state assembly election campaign?