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Land ahoy!

If we are to take one public policy lesson from Singur, it’s a critical re-look at India’s policies on land acquisition and resettlement, writes Gautam Chikermane.

india Updated: Sep 09, 2008 22:47 IST
Gautam Chikermane

Between Tata Motors’ Singur face-off and your 250 sq m plot in Delhi that’s been under siege from builders for the past three years, there’s a single binding force: transfer of property. It is the process of transfer that differentiates the first from the last — you have a choice.

In the case of mega-projects dotting the country, owners of land don’t have that choice. Here, too, if the land is acquired by a private company — a DLF acquiring 2,500 acres in Gurgaon to develop a township, for instance — and landowners get what they feel is a market rate (or higher), the transfer is smooth. Sweetening such deals is also the promise of jobs, an equity stake in the project, equivalent land elsewhere and so on.

The problem arises when the govern-ment acquires land and then offers it to private businesses to create SEZs (Reliance in Haryana) or build steel plants (Posco in Orissa) and auto plants (Tata Motors in Singur). Here, the relationship is a monopsony — a single buyer (the government) for many sellers, and one where the sellers do not have a choice as the state exercises its right to buy. Economists and jurists term this process of land acquisition ‘eminent domain’.

Whatever the nomenclature, its meaning is the same: the power of the state to take its citizens’ properties or rights (like lease) for public use, for which the State pays the citizen a just compensation. Read the laws of various nations and the terms change from ‘eminent domain’ in the US to ‘compulsory purchase’ in Britain and New Zealand to ‘resumption’ or ‘compulsory acquisition’ in Australia and ‘expropriation’ in Canada and South Africa.

A tool for economic development, in India it is known as ‘land acquisition’, based on the 114-year-old Land Acquisition Act, 1894. Under this — and 13 other provincial and national laws — more than 150,000 square km have been acquired between 1951 and 1990. That’s more than the size of 143 countries, including Bangladesh, Nepal and Greece. More than half of this, notes an Asian Development Bank Report, is estimated to be private property. Specifically, 5 per cent of Orissa’s and Andhra Pradesh’s land mass, 3.5 per cent of Goa’s and 3 per cent of Kerala’s has been acquired, according to studies by various scholars.

On the human front, the total number of people displaced so far is estimated at up to 50 million by the World Commission on Dams. That’s little less than the population of France. Within them, three out of four people have lost their land to water resources schemes. With numbers so large, and issues so wide, there are three sets of questions that crop up around the issue of land acquisition, to which I have no answers — yet.

One, have the returns from displacement been commensurate? In other words, have the benefits of displacement helped more than that number?

When we attempt to define ‘benefit’, we face a legal dilemma. Globally, jurists and political scientists are taking a more liberal view of things, where ‘public purpose’ and ‘public ownership’ seen through the lens of eminent domain are converging towards ‘public advantage’, even if the ownership is not public. A September 5 Supreme Court judgement takes the debate around what serves ‘public purpose’ further by defining it as one that brings foreign exchange, generates employment and secures economic benefits for the state and public at large.

Two, has the 4.5 per cent of the country’s population that has been displaced got a deal where its survival and living standards have remained the same, if not risen? In legal terms, has their compensation been just and reasonable in spirit of the law? If we are to assume that cultural and social adjustments are easy once the resettlement friction is greased with adequate compensation — a tenuous argument — has employability and retraining, which ensure a soft-landing, been taken care of?

Three, is economic development backed by political sincerity? The political economy of eminent domain, the world over, is looked at with suspicion. And given a sharp rise in the number of leaders here willing to use it as a lever to fire emotive voters, how does developmental politics engage with disruptive politics around land? Can the political atmosphere where poverty and illiteracy tilt the scales towards petty power-mongers be countered? Can the use of eminent domain be morally strong? Are politicians exercising the eminent domain necessarily bad?

See the political fright on West Bengal Chief Minister Buddhadeb Bhattacharjee’s face when he addresses the issue. He is doing the right thing by using the eminent domain principle to transfer land to Tata Motors, a project that will bring in jobs, wealth and taxes to the state. The answers to the first two questions above are definitely positive. But there’s no conviction in his stance, no firmness in his voice. On the other hand, the passion with which Mamata Banerjee is unleashing her violent politics could well be her spiritual salvation.

The story at Singur is still developing. Whether it’s rhetoric and rant or economic logic that will win, we don’t know just yet. What we do know is that government intervention in land deals lacks credibility. If it was the government that wanted to buy your 250 sq m plot to turn your area into a metro station, you would, perhaps rightly, suspect that you’ve been had. The same price, when paid by a developer could get you thinking rationally. You may still not want to sell. But once 83 out of 100 homeowners are willing (the ratio at Singur), you may have no choice in stalling the project, as the greater good, even at the hands of the government, would demand that you sign up.

If we are to take one public policy lesson from Singur, it’s a critical re-look at India’s policies on land acquisition and resettlement. The National Policy on Rehabilitation and Re-settlement, 2007, attempts to address that. In the absence of right to property, taken away by the 44th amendment in 1978 by Indira Gandhi, the Land Acquisition Act, 1894, needs to be amended to bring credibility back into politics.

Land acquisition is also an area ripe for public-private partnership, where the state ensures that a company acquiring land not only offers just and reasonable compensation but also raises the level of skill in that area (something all companies are willing to do) and unleashes the country’s inclusive aspiration: 70 per cent of India’s transition from agriculture to industry and the accompanying macro-prosperity.

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