the government and society address the issue of land acquisition and ownership will have very important ramifications,

How much of the benefits of economic growth accrue directly to farmers and workers who lose their livelihoods when agricultural land is taken over for development? If handled properly, the Land Acquisition and Rehabilitation and Resettlement Bill 2011 offers an opportunity for equitably addressing the interests of diverse sections affected by the land acquisition process.

Jayanta Bandyopadhyay (jayanta@iimcal.ac.in) is at the Centre for Development and Environment Policy, Indian Institute of Management, Kolkata and Tapas Roy (email2roys@gmail. com) is at the Indian Institute of Planning and Management, Kolkata Research Centre.

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In present-day India, the pressure on land has multiplied, as have the intensity of conflicts over it. Establishing control over land, with the help of the Land Acquisition (Amendment) Act, 1984 or otherwise, continues to generate widespread social tensions. Land-related conflicts, whether in the forested heartland of the country, the bauxite-rich areas of Odisha or the agricultural hinterlands of West Bengal, have become all too common. From the point of view of governance, this issue, which touches the largest number of people,

The British introduced the Land Acquisition Act in 1894 for legal takeover of private lands for public purposes. The present Land Acquisition (Amendment) Act, 1984 is a modified version of this. Its use in independent India has triggered hundreds of popular protests, including those over the 2005 proposal to establish 513 special economic zones (SEZs). The dismal record of the State in rehabilitating and resettling those involuntarily displaced by land acquisition inspires very little public confidence.

A Land Acquisition and Rehabilitation and Resettlement Bill, 2011 (hereafter Land Bill) was approved by the cabinet and introduced in Parliament on 7 September 2011 by the minister of rural development. It was referred to the Standing Committee on Rural Development on 15 September “for examination and report”. The Land Bill, meant to replace

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the Land Acquisition Act, 1894, proposes a unified legislation for acquisition of land and rehabilitation mechanisms for all affected persons.

Urgency of Land Bill 2011

While the displaced victims of past land acquisition processes have been protesting against ill-implemented or inadequate rehabilitation and resettlement (R&R) provisions, those getting the acquired land, e g, industrialists, are no less unhappy, albeit from a different perspective. A recent study reveals that delays in land acquisition for industrial projects are likely to endanger investments worth $100 billion in India in the near term. Eighteen delayed projects, which will have an investment amounting to Rs 2,44,815.5 crore ($49,317.3 million), are reportedly stuck at the stage of memorandums of understanding (MoUs).1

Large-scale land acquisition for industrialisation has always been projected by economists as essential for economic development and, therefore, eradication of poverty. But industrialists, concerned with the cost and opportunity aspect of their investment plans, in general desire almost off-the-shelf acquisition of acquired land. Their interest in the human problem of R&R and the cost incurred by the displaced are limited to a few cor porate social responsibility initiatives. The rest is left to the government to sort out.

Divided Opinion All Round

The legislative assembly elections in Uttar Pradesh have been an important factor behind the Land Bill 2011 being tabled in Parliament at this time. After serious criticism from the judiciary as well as the opposition parties, in 2011 the Uttar Pradesh government radically enhanced the quantum of compensation for acquired land to placate farmers who were to be displaced.2 The ruling Trinamool Congress in West Bengal, which opposed land acquisition in Singur and Nandigram by the former state government, has taken the position that there will be no involvement of the government in the process of land acquisition for private industry.3 In a recent lecture delivered in Kolkata, Nobel laureate economist Joseph Stiglitz expressed doubts about the practicality of the state

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being a distant and passive observer while direct purchases of land are made by industry.4 Even for state government projects, land acquisition is to be recommended only if there is the consent of all the land owners concerned.

In contrast, the National Advisory Council (NAC) wants the states to get involved when “other less-displacing alternatives are not available” and “the acquisition (is) only for public purposes”.5 The NAC does not exclude private industry from the definition of “public purpose” if the benefits are to largely accrue to the common people. However, the Land Bill stipulates that it is essential to have the consent of at least 80% of the landowners in an area to be acquired. There are differences even on returning unused acquired land to the original landowners with the governments of Uttar Pradesh, Tamil Nadu and West Bengal enacting divergent legislations. According to Section 48B in Tamil Nadu, the government can return land to the original owners under certain circumstances. In West Bengal, the Singur Land Rehabilitation and Development Bill, 2011, passed by the assembly, permits retur ning land to unwilling farmers who refused to take money during the acquisition.6 However, in Uttar Pradesh, the Urban Planning and Development Amendment Bill, 2011 prevents farmers from reclaiming their land once it is acquired.7

The Land Bill 2011 follows the guideline provided in the NAC recommendations on “public purpose”, a position criticised by industry. The union government has, however, been quite pro-industry in defining “fair price” and reduced the compensation liability in the Land Bill, which prescribes four times the market value instead of six times as suggested by the NAC. It has also shifted from its original draft of restricting acqui sition of any multi-crop irrigated land for public purpose to allowing acquisition of irrigated multi-crop land up to 5% of the total land area in a district.

Opinion on land acquisition is divided among bodies representing industry such as the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Confederation of Indian Industry (CII). While the CII has taken the stand that the government cannot relieve itself of the responsibility of acquiring land for industry, the FICCI holds that marketbased land acquisition will be transparent and more favourable to farmers.8

The National Alliance of People’s Movements (NAPM) has opposed the application of the principle of eminent domain if the government is acquiring land for private corporations and demanded the extension of R&R packages to all sellers (including past ones) even if the exchange is at market price. It has also said the Land Bill should be titled the “Development Planning, Resettlement and Rehabilitation Bill”, ensuring no forcible acquisition and protecting the rights of communities over their land and everything attached to it. The NAPM holds that the focus should be on development, not just acquisition, recognising that those who surrender land are investors in the development process, not victims of it.9

In the post-liberalisation year of 1996, the Supreme Court obser ved, “Publication of declaration (by the government) under Section 6 is conclusive evidence of public purpose”.10 However, in 2011, it remarked that “the appli cation of the concept of ‘Public Purpose’ must be consistent with the constitutional ethos and especially with the Fundamental Rights and Directive Principles of the Indian Constitution”.11

All this has generated confusion and has added to the many difficulties of arriving at a consensus, only pointing to

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the need of a new Act that clarifies and reconciles all these issues.

Sharing of Prosperity

At the present stage of India’s economic development, agriculture is a distant third in the creation of value through the use of land. The service sector generates the highest value per unit area of land, followed by manufacturing. Thus, from a narrow economic point of view, it makes sense to transfer scarce land from agriculture to industry or the service sector. But such a mechanical calculation would stir up the politically-sensitive debate over using fertile land for industrial purposes and the threat to food security. However, in this era of wider international trade, such a shift may not cause food insecurity.

That industrialisation may lead to food shortages is an alarmist view. The fraction of agricultural land required for industrial production is too small to make more than a dent on overall food production. For this reason, the literature on economic development has paid almost exclusive attention to the transfer of labour from agriculture to industry, and has neglected the issue of land altogether.12

In the Land Bill 2011, there are concerns about food security and the acquisition of multi-crop land for industry has been restricted to a maximum of 5% of the total land in a district.

The question India faces is how much of the benefits of economic development will accrue directly to farmers who lose their land and livelihood. For too long, poor people have been hearing about the percolation theory and inclusive growth from policymakers, which do not reflect the reality they face. But to achieve the government target of rapid economic growth, there may not be much choice other than transferring large areas of land from agriculture to industry. The Land Bill 2011 provides an opportunity for the government to ensure that there really is inclusive growth while doing so.

Importance of Rural Voters

Of the 1.21 billion people in India, nearly 69%13 live in villages and depend on agriculture for a livelihood, directly or indirectly. Due to the lack of effective land reforms, landholding in India is quite skewed. The All-India Report on Agriculture Census 1991-2000 reveals that in 1995-96, as many as 61.2% the holdings in the country accounted for only 17.2% of the total operational landholdings, confirming a high degree of fragmentation.14 As a result, over decades, a large number of marginal farmers have moved into the “absolute landless” or “mere landless” (owning up to 0.002 acres) categories. Rich peasants, on the other hand, have largely moved to urban areas and employ migrant agricultural labourers for farming.

During the same period a new group, which earns a significant income from non-farming activities, has emerged in rural India and this has created a new political alignment. With its economic and social clout, this group occupies the political space partially vacated by rich absentee landlords and the landless and mere landless look to it for economic and social support. The rise of caste-based politics in north India is an indicator of this shift. With its large numbers, this new alliance has been demanding far more than what the present Land Acquisi tion Act offers.

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This has created a serious dilemma for the ruling elite when it comes to choosing between growth and equity.

Context of Land Bill 2011

Electoral arithmetic pushes the political elite to present a farmer-friendly face on the land acquisition issue. At the same time, the economic policies of the union government require otherwise. It is against this background that the Land Bill 2011 has been placed in Parliament. The bill makes an attempt to address two of the three most contentious issues in the Land Acquisition Act, 1894, leaving the third unanswered. These are (1) determining a clear definition of fair compensation; (2) defining the scope and limits of public purpose for acquisition; and

(3) acquiring land under litigation in a proposed project site.

Fair Compensation

After using the unfair compensation packages outlined in the Land Acquisition Act 1894 for decades, electoral calculations seem to have pushed the political elite to enhance the level of compensation in the Land Bill to give it a farmer-friendly image. However, the control of the urban rich over the political machinery has ensured that the cash compensation path remains wide open. No justification or reference is given to vindicate the multi plier, which is paid over and above an inflationresistant annuity for 20 years. The landowning population in rural India is small in number. With more than 60% of the rural population being either landless or mere landless, they will hardly benefit from such liberal compensation.

The issue of compensation for those who do not lose land as a result of acquisition, but lose their livelihoods is not addressed in the present Land Acquisition (Amendment) Act, 1984. There are some provisions in the Land Bill for compensating those indirectly affected in the acquisition process. But in the pre sent scenario of using migrant labourers for cultivation, it is difficult to prepare an accurate list of such people and there is no clear direction in the bill for identifying them. This will make any list a subject of continuing disputes and provide the political elite opportunities for one-upmanship.

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There are more complications in the way of actual implementation of compensation packages. Today, the price of land in suburban areas begins increasing as soon as there is a rumour that an industry or business may come to the vicinity. Speculators with greater access to information quickly get hold of large areas of land. When construction for an automobile plant at Singur, West Bengal, began, the land price in and around the site rose by more than 10 times the highest ever sale price in that locality. Such speculative transactions can easily make losers of evictees in the post-acquisition scenario and add to dissension. The RR package in the Land Bill, which provides the option of employment to losers of land without a qualifying clause (minimum land area) for eligibility, is another possible source of disputes. In a country with a highly fragmented landholding pattern and a high level of unemployment, such legislation may have serious negative implications for any investment proposal.

Public Purpose

Apart from the developmental and strategic needs of the government, land is also needed by the private sector. As per the Land Bill, 80% of the affected families in a project area have to agree to any proposal to acquire their land. It is not clear how such quantitative assessments will be made. The definition of “affected people” is also open to interpretation.

In today’s world, the distinction between private industry and public inte rest has become a complex issue that can at times be politically manipulated. In India, the United Progressive Alliance (UPA) government tabled the Land Acqui sition (Amendment) Bill, 2007 in Parliament to redefine the very definition of public purpose after the widespread protests over land acquisition for SEZs. But it lapsed in 2009 when the 14th Lok Sabha was dissolved. This only underlines how urgent a clear descri ption of public purpose is, especially in the use of eminent domain.

Acquisition of Litigated Land

There is no attempt to address the issue of acquiring land under litigation in the bill despite the fact that no litigated land can be acquired by an individual

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owner for industrialisation unless vested through the acquisition process of the state. In Singur, land so acquired constituted a major part of the 400 acres of disputed land acquired for Tata Motors’ proposed automobile plant.

Conclusions

The Land Bill offers an opportunity for equitably addressing the interests of diverse sections involved in the land acquisition process. Industrialisation in countries such as India needs to be supported by a more innovative and equitable framework for land acquisition and RR. Close attention also has to be paid to the public purpose in proposals for land acquisition. A large section of the rural population is fully dependent on agriculture for its livelihood and cash compensation for land is not an attractive option to it. This makes land for land an important alternative. The upcoming discussions in Parliament on the Land Bill 2011 will have to recognise that develop ment and democracy have arri ved at the crossroads on the land question and keep public interest in mind, rising above narrow electoral interests.

Notes

1 Assocham’s Eco Pulse Study on “Land Acquisition Scenario in India”, October 2009. 2 “UP Announces New Land Acquisition Policy”, The Hindu, 3 June 2011.

3 “State Land Bill Seeks to Bar Acquisition for Pvt Projects”, Times of India, Kolkata, 15 September 2011.

4 “Hands-off Land Policy May Not Work: Stiglitz”, Times of India, 12 January 2012. 5 National Advisory Council, “Land Acquisition, Resettlement and Rehabilitation”, 25 May 2011.

6 “Governor’s Assent to Singur Land Rehabilitation and Development Bill, 2011”, GK Today: Legal Current Affairs, 1 August 2011.

7 “UP Changes Land Law, Farmers The Worst Hit”, Times of India, Kolkata, 12 August 2011.

8 “FICCI, CII Split Over NAC Land Acquisition Recommendations”, at http://www.domain-b.com/ economy/general/20110606, dated 6 June 2011.

9 Submission on Land Acquisition before Parliamentary Standing Committee by National Alliance of People’s Movement, 2 November 2011; see napm-india.org/node/524.

10 Scindia Employees Union vs State of Maharashtra and Others, reported in 10 SCC 150, 1996.

11 Dev Sharan and Others vs State of UP and Others, 7 March 2011, Supreme Court of India.

12 Ghatak, Maitreesh and Parikshit Ghosh (2011): “The Land Acquisition Bill: A Critique and a Proposal”, Economic Political Weekly, Vol 46, No 41.

13 Census of India; see http://censusindia.gov. in/2011-prov-results/paper2/data_files/india.

14 “Land Use and Ownership in India”; at http:// www.empowerpoor.org/backgrounder.asp? report=162.