Land acquisition Bill to go to Parliament any time: Joshi
BS Reporter / New Delhi September 16, 2009, 0:19 IST
Cabinet has already approved the Bill.
Union Rural Development Minister C P Joshi today said the Land Acquisition (Amendment) Bill, certain provisions of which were earlier opposed by Trinamool Congress chief and Railway Minister Mamata Banerjee, was ready to go to Parliament any time. He told reporters here that the Cabinet had already approved the Bill and now the introduction of the Bill in Parliament had to be addressed by the parliamentary affairs ministry.
The minister did not comment whether the content of the Bill had been changed to accommodate the views of the Trinamool Congress. Joshi, who presented the quarterly report of his ministry’s performance, however, did not say when the Cabinet approved the Land Acquisition (Amendment) Bill 2007.
The Trinamool Congress chief, whose party is the second largest constituent of the United Progressive Alliance (UPA), had almost walked out of a Cabinet meeting raising serious objections to the Bill.
Banerjee had opposed that provision in the Bill which provides for private developers to acquire 70 per cent of land for an industrial project, directly from farmers and land owners. The remaining 30 per cent is to be acquired by the state government concerned. Joshi, did not comment on whether the provisions opposed by Banerjee were part of the Bill approved by the Cabinet. The Medha Patkar-led National Alliance of People’s Movement, which has been opposing the Land Acquisition Amendment Bill and the Relief and Rehabilitation Bill, said it was totally in the dark as to when the Cabinet approved the Bill.
NAPM activists said the only way the Bill could be brought in Parliament without displeasing Banerjee could be after the Assembly elections in West Bengal in 2011.
Wednesday, November 18, 2009
Mamata and the LAA
In a huff
Business Standard / New Delhi August 20, 2009, 0:14 IST
It may be a coincidence, but Railway Minister Mamata Banerjee hasn’t attended any cabinet meeting after she almost threatened to walk out of a cabinet meeting in the third week of July over the Land Acquisition Amendment Bill. On that occasion, Banerjee had to argue with not only Rural Development Minister C P Joshi but also other Congress ministers like Human Resource Development Minister Kapil Sibal who wanted to pass the bill immediately. While she has been in West Bengal for her political programmes, she was in Delhi in the first week of August when a Cabinet meeting took place. On that occasion, she chose to attend a private party of a party colleague instead....
Business Standard / New Delhi August 20, 2009, 0:14 IST
It may be a coincidence, but Railway Minister Mamata Banerjee hasn’t attended any cabinet meeting after she almost threatened to walk out of a cabinet meeting in the third week of July over the Land Acquisition Amendment Bill. On that occasion, Banerjee had to argue with not only Rural Development Minister C P Joshi but also other Congress ministers like Human Resource Development Minister Kapil Sibal who wanted to pass the bill immediately. While she has been in West Bengal for her political programmes, she was in Delhi in the first week of August when a Cabinet meeting took place. On that occasion, she chose to attend a private party of a party colleague instead....
'The State's Duty': To Make Land Available for Development
The 'L' word
Vinayak Chatterjee / New Delhi September 21, 2009, 0:29 IST
The introduction of the Land Acquisition Amendment Bill (2009) has the potential to derail economic development.
Exasperated with the public perception of its role, the government now wants to abdicate its key sovereign function of making land available for economic development by dumping it on the private sector. This is wrong. The maintenance of up-to-date land records, the scientific identification of tracts for change-over from agriculture to non-agricultural uses and the smooth transfer of land-assets are the functions of the sovereign. The Land Acquisition (Amendment) Bill, 2009, to be introduced in conjunction with the National Rehabilitation and Resettlement Bill (R&R Bill) throws the baby out with the bathwater.
The introduction of these Bills has had a troubled history, and not all of it is due to Mamata Banerjee! The Standing Committee of Parliament set-up in UPA-I to examine the provisions in detail, had expressed its reservations. Chambers of commerce had sent written communication of their very serious concerns. Nevertheless, it was sought to be enacted in February on the last day of the 14th Lok Sabha. Hurriedly passed in the Lok Sabha, it invited criticism — not just for the haste, but also for doing so in the absence of the opposition National Democratic Alliance. Luckily, there was inadequate time for the Rajya Sabha to clear it, and it thus lapsed as the tenure of the 14th Lok Sabha ended. Notwithstanding all this, UPA-II once again tried introducing the same Bill on August 10, seemingly oblivious to all past objections. As expected, Mamata Banerjee created a furore leading to Sonia Gandhi refereeing the matter and hurriedly withdrawing the Bill, ostensibly, to be dealt with again in the next session of Parliament.
It is not possible to have a perspective on the Land Acquisition Bill without taking stock of the accompanying Rehabilitation and Resettlement Bill. This Bill re-emphasises resettlement as a development issue. In a recent interview, Amartya Sen said, “...on land acquisition ... the sets of people benefitting and paying the price are often quite different.” The Rehabilitation and Resettlement Bill does take a major stride in attempting to address Sen’s concern. The Congress Party thinks that this Bill is heavily aam aadmi but appears to have not quite factored in the possible negative impact on economic development. If it hampers job creation, it cannot be aam aadmi.
Anyway, let us refresh ourselves with the key provisions.
One, the Bill stipulates that land may be acquired by the state only for public purpose. However, the proposed amendment to the Act severely narrows down the definition of ‘public purpose’ to ‘defence purposes’ and ‘infrastructure development’.
Two, other than defence or infrastructure, the Bill proposes that the state can only acquire a maximum of 30 per cent of the land required for an industrial project while the rest has to be purchased directly by the concerned company. A company that wants to set up a large project cannot ask the government to forcibly acquire land, citing ‘eminent domain’. It must first buy 70 per cent of the land required privately, and do this directly from those who own the land. Simply put, the state will step in only to ensure that a 30 per cent minority does not hold back the wishes of the 70 per cent majority.
Three, in the event of resale of acquired land, the entity is required to share 80 per cent of the difference (between the new sale price and the original acquiring price) with the original landowners or their heirs. The implementation of this clause has several practical limitations.
Overall, it is only government that can carry out the task of acquiring land from numerous owners, efficiently and effectively, in a scenario where title-search is frustrating, to say the least. The private sector can perform this function only in reasonably efficient markets. The land acquisition business is a grossly imperfect market. Therefore removing government from playing a proactive role is self-defeating.
(Banerjee’s demands include a buyback provision under which the farmers can repurchase their land if the proposed industry does not use the land within the given time — no role for the government in land acquisition for private industrial projects, no forcible acquisition of land and exclusion of all farm lands. All these four demands are impractical, in the opinion of this columnist.)
Identifying large tracts of land and their subsequent acquisition should be sterilised politically. This means, land is acquired ex-ante, and partially or fully developed before it is allocated to a particular private sector entity and before controversies erupt over government acting at the behest of any particular industrial group. The clause ‘public purpose’ should be redefined to empower the state to acquire land not only for infrastructure or defence purposes but also for the purpose of development of land for potential use by private-sector led industrial, commercial or institutional purposes. This is all the more relevant in an era where Public Private Partnership is being encouraged from bus terminals to sports stadia to hospitals.
The columnist has argued in ‘The lay of the land’, November 17, 2008, that Land Bank Corporations in the public domain would be an appropriate 21st century institutional response to fulfilling the required objectives. As the debate and discussion on the Land Acquisition Bill again hots up, it will be worthwhile considering this solution.
The focus of these State Land Bank Corporations would be to scientifically acquire large tracts of primarily non-cultivable land, develop them as land banks for the future, build appropriate infrastructure linkages and have a transparent mechanism to pass them on to the private sector. The Rehabilitation and Resettlement Bill requirements should be handled by the Land Bank Corporations as per the Rehabilitation and Resettlement Bill Bill, the costs of which could be passed on to the private sector.
Where site-requirements are large (as in the case of a refinery, or a steel plant), or very specific (as in the case of a mine), it is clear that the effort has to go beyond ex-ante land-banking. Industry and government have to work together on this. The arrangement to purchase land should be a tripartite one involving the government, the seller and the buyer. The Land Bank Corporation can be the market-maker. In an article in Hindustan Times on August 15, 2009, Kaushik Basu wrote: “Modern economic theory ... comes out on the side of government intervention … the land acquisition process cannot be left to voluntary transactions. The state must have a role”.
Among the three classical factors of production, government plays a pivotal role in developing and regulating capital and labour markets. It cannot excuse itself from the third factor of production — the land market.
The author is chairman of Feedback Ventures.
He is also the chairman of CII’s National Council on Infrastructure.
Views expressed are personal. vinayak@feedbackventures.com
Vinayak Chatterjee / New Delhi September 21, 2009, 0:29 IST
The introduction of the Land Acquisition Amendment Bill (2009) has the potential to derail economic development.
Exasperated with the public perception of its role, the government now wants to abdicate its key sovereign function of making land available for economic development by dumping it on the private sector. This is wrong. The maintenance of up-to-date land records, the scientific identification of tracts for change-over from agriculture to non-agricultural uses and the smooth transfer of land-assets are the functions of the sovereign. The Land Acquisition (Amendment) Bill, 2009, to be introduced in conjunction with the National Rehabilitation and Resettlement Bill (R&R Bill) throws the baby out with the bathwater.
The introduction of these Bills has had a troubled history, and not all of it is due to Mamata Banerjee! The Standing Committee of Parliament set-up in UPA-I to examine the provisions in detail, had expressed its reservations. Chambers of commerce had sent written communication of their very serious concerns. Nevertheless, it was sought to be enacted in February on the last day of the 14th Lok Sabha. Hurriedly passed in the Lok Sabha, it invited criticism — not just for the haste, but also for doing so in the absence of the opposition National Democratic Alliance. Luckily, there was inadequate time for the Rajya Sabha to clear it, and it thus lapsed as the tenure of the 14th Lok Sabha ended. Notwithstanding all this, UPA-II once again tried introducing the same Bill on August 10, seemingly oblivious to all past objections. As expected, Mamata Banerjee created a furore leading to Sonia Gandhi refereeing the matter and hurriedly withdrawing the Bill, ostensibly, to be dealt with again in the next session of Parliament.
It is not possible to have a perspective on the Land Acquisition Bill without taking stock of the accompanying Rehabilitation and Resettlement Bill. This Bill re-emphasises resettlement as a development issue. In a recent interview, Amartya Sen said, “...on land acquisition ... the sets of people benefitting and paying the price are often quite different.” The Rehabilitation and Resettlement Bill does take a major stride in attempting to address Sen’s concern. The Congress Party thinks that this Bill is heavily aam aadmi but appears to have not quite factored in the possible negative impact on economic development. If it hampers job creation, it cannot be aam aadmi.
Anyway, let us refresh ourselves with the key provisions.
One, the Bill stipulates that land may be acquired by the state only for public purpose. However, the proposed amendment to the Act severely narrows down the definition of ‘public purpose’ to ‘defence purposes’ and ‘infrastructure development’.
Two, other than defence or infrastructure, the Bill proposes that the state can only acquire a maximum of 30 per cent of the land required for an industrial project while the rest has to be purchased directly by the concerned company. A company that wants to set up a large project cannot ask the government to forcibly acquire land, citing ‘eminent domain’. It must first buy 70 per cent of the land required privately, and do this directly from those who own the land. Simply put, the state will step in only to ensure that a 30 per cent minority does not hold back the wishes of the 70 per cent majority.
Three, in the event of resale of acquired land, the entity is required to share 80 per cent of the difference (between the new sale price and the original acquiring price) with the original landowners or their heirs. The implementation of this clause has several practical limitations.
Overall, it is only government that can carry out the task of acquiring land from numerous owners, efficiently and effectively, in a scenario where title-search is frustrating, to say the least. The private sector can perform this function only in reasonably efficient markets. The land acquisition business is a grossly imperfect market. Therefore removing government from playing a proactive role is self-defeating.
(Banerjee’s demands include a buyback provision under which the farmers can repurchase their land if the proposed industry does not use the land within the given time — no role for the government in land acquisition for private industrial projects, no forcible acquisition of land and exclusion of all farm lands. All these four demands are impractical, in the opinion of this columnist.)
Identifying large tracts of land and their subsequent acquisition should be sterilised politically. This means, land is acquired ex-ante, and partially or fully developed before it is allocated to a particular private sector entity and before controversies erupt over government acting at the behest of any particular industrial group. The clause ‘public purpose’ should be redefined to empower the state to acquire land not only for infrastructure or defence purposes but also for the purpose of development of land for potential use by private-sector led industrial, commercial or institutional purposes. This is all the more relevant in an era where Public Private Partnership is being encouraged from bus terminals to sports stadia to hospitals.
The columnist has argued in ‘The lay of the land’, November 17, 2008, that Land Bank Corporations in the public domain would be an appropriate 21st century institutional response to fulfilling the required objectives. As the debate and discussion on the Land Acquisition Bill again hots up, it will be worthwhile considering this solution.
The focus of these State Land Bank Corporations would be to scientifically acquire large tracts of primarily non-cultivable land, develop them as land banks for the future, build appropriate infrastructure linkages and have a transparent mechanism to pass them on to the private sector. The Rehabilitation and Resettlement Bill requirements should be handled by the Land Bank Corporations as per the Rehabilitation and Resettlement Bill Bill, the costs of which could be passed on to the private sector.
Where site-requirements are large (as in the case of a refinery, or a steel plant), or very specific (as in the case of a mine), it is clear that the effort has to go beyond ex-ante land-banking. Industry and government have to work together on this. The arrangement to purchase land should be a tripartite one involving the government, the seller and the buyer. The Land Bank Corporation can be the market-maker. In an article in Hindustan Times on August 15, 2009, Kaushik Basu wrote: “Modern economic theory ... comes out on the side of government intervention … the land acquisition process cannot be left to voluntary transactions. The state must have a role”.
Among the three classical factors of production, government plays a pivotal role in developing and regulating capital and labour markets. It cannot excuse itself from the third factor of production — the land market.
The author is chairman of Feedback Ventures.
He is also the chairman of CII’s National Council on Infrastructure.
Views expressed are personal. vinayak@feedbackventures.com
A Trio of Articles on Proposed Reforms to the Land Acquisition Act
Land Acquisition (Amendment) Bill: A slow but sure step forward
By Ramaswamy R. Iyer. The Hindu. August 7 2009
The debate about the displacement of people caused by various developmental projects has been going on for over two decades. Without going into that history in detail, we may note that the Government of India finally notified the National Rehabilitation and Resettlement Policy 2007 in October 2007, and followed that up with the Rehabilitation and Resettlement Bill 2007 and the Land Acquisition (Amendment) Bill 2007. Those Bills have lapsed and have now to be introduced afresh in the new Lok Sabha. There have been reports that Railway Minister Mamata Banerjee is unhappy with the Bills. There have also been protests against the Bills by many NGOs.
Superficially, the Bills seem to include a number of good elements. There was a demand for a Rehabilitation Act and here is a Bill; the much-criticised Land Acquisition Act is being amended; ‘public purpose’ is being re-defined; governmental acquisition of land for private parties is being reduced; ‘minimum displacement,’ ‘non-displacing alternatives,’ consultations with the people likely to be affected, and so on, find a place in the Rehabilitation Bill; a Social Impact Assessment is provided for; an Ombudsman is being provided for the redress of grievances; and a National Rehabilitation Commission is envisaged. Why then are the Bills not being welcomed?
Let us consider the Land Acquisition Amendment Bill first. At first sight, the deletion of all references to companies gives us the impression that acquisition by the state for private parties is being eliminated, but that is not the case. The original Act had the wording “for a public purpose or for a company”; the words “or for a company” are now being omitted; but the definition of “public purpose” itself is being changed to include a (supplementary) acquisition for “a person” (including a company). If the private party purchases 70 per cent of the required land through negotiation, the balance 30 per cent can still be acquired by the government for that party. This means that sovereign compulsion will be brought to bear on those who are not inclined to sell their land, and also that state patronage for industrial houses can continue. Incidentally, it will be seen that the definition of ‘public purpose,’ instead of being made stringent and narrow as many had recommended, is being widened.
Moreover, it was necessary not merely to rule out (or limit) the acquisition of land for private parties under the Land Acquisition Act, but also to ensure that rural communities are not taken advantage of by corporate bodies in unequal negotiations. There is no such provision in the Bill.
Judging by its name, The Land Acquisition Compensation Disputes Settlement Authority will apparently deal only with compensation issues. A longstanding criticism of the Land Acquisition Act has been that the ‘public purpose’ for which land is being acquired is not open to contestation. There seems to be no change in that position.
One wonders whether the bar on the jurisdiction of the civil courts and the establishment of a Dispute Settlement Authority instead is in fact a good thing to do. There is room for misgivings here.
Turning now to the Rehabilitation Bill, the provision for a Social Impact Assessment seems very good, but the impacts are rather narrowly confined to physical assets (buildings, temples), institutions, facilities, etc. Social impacts must be more broadly understood to include the loss of identity; the disappearance of a whole way of life; the dispersal of close-knit communities; the loss of a centuries-old relationship with nature; the loss of roots; and so on. It is good that the SIA will be reviewed by an independent multi-disciplinary expert body, but it should first be prepared by a similar body. The provision for a Social Impact Assessment clearance is good, but not enough: it should be part of an overall clearance for displacement. If the felling of trees and interference with wildlife and nature in general require statutory clearances, should not the displacement of people be subject to a similar requirement? Such a clearance must come from an independent statutory authority and not from the bureaucracy. The clearance must of course be subject to certain conditions and must be revocable in the event of non-compliance or lapses; and the revocation clause should be actually used.
The terms ‘minimum displacement’ and ‘non-displacing alternative’ are music to the ears, but the application of this criterion is left to a late stage when the consideration of options may no longer be possible, and the decision is left to the Administrator for R&R. In other words, this crucial decision is entrusted to the bureaucracy.
An impressive structure of institutions has been specified, but their responsibilities and powers have not been spelt out. Administrator, Commissioner, project-level and district-level R&R Committees, Ombudsman, Monitoring and Oversight Committees, National R&R Commission: what each will do, how they will be inter-related, what decision-making powers each will have and in relation to what aspects, and so on, are far from clear. Everything is covered by the phrase “as may be prescribed.”
Words such as “wherever possible,” or other similar phrases are scattered throughout the Bill. For instance, group settlement is laid down, but qualified by the phrase “wherever possible;” training is to be provided “wherever necessary;” there are also qualifications such as “if government land is available,” “preferably,” and so on. They seem innocuous, but all of them involve decisions. Such hedged-in requirements can hardly be mandatory: they are likely to become discretionary, with the discretion vesting in the bureaucracy.
The Ombudsman provision is a good one, but ‘grievance’ has been narrowly defined to cover only the case of “not being offered the benefits admissible.” Grievances could relate to many other things: non-participatory project decision, failures of consultation, non-compliance with the minimum displacement condition, non-inclusion of a person in the ‘affected’ category, and so on. How the Ombudsman will be appointed, how the Ombudsman will function, etc., are left to be ‘prescribed.’
Taking the preceding points together, it appears that the precise manner in which this seemingly benign and enlightened legislation will actually work in practice will be entirely determined by the delegated/subordinate legislation, that is, the rules that are made under it.
The National Monitoring Committee seems totally bureaucratic, except for the non-mandatory association of some experts (the operative word is “may”). No civil society or NGO participation seems envisaged.
In the case of the Sardar Sarovar Project the basic principle in force (though it may not always be complied with) is: rehabilitation must precede submergence. The present Bill retreats from that position and requires only “adequate progress in rehabilitation” prior to displacement. This is a retrograde step. Besides, who will decide the adequacy of the progress?
The elements of the rehabilitation ‘package’ seem inferior to the policies already adopted in projects such as Sardar Sarovar and Tehri. Moreover, cash in lieu of land is envisaged in several places. This is fraught with danger. Eventually, cash may well become the main form of compensation.
In the event of deliberate or inadvertent lapses or non-compliance or deviations, what consequences will follow? The Bill is silent on this. Without such sanctions, how can the provisions be enforced? Far from sanctions for non-compliance, there is a sweeping indemnity provision!
In addition to those primary points, there are many others, some of them quite important, that need consideration. They cannot be set forth in detail here for want of space.
The conclusion that emerges from this quick examination of the two Bills is that there are many weaknesses and questionable features in these Bills which need to be rectified. Opposition to the Bills is therefore warranted. However, the very fact that the government is thinking of a rehabilitation law and of amending the Land Acquisition Act is an achievement for public opinion. It has taken more than two decades for the debate to reach this stage. Opposition to the Bills should be carefully modulated so that we can proceed further from here and not lose what has been gained.
==================================
West Bengal Land (Requisition and Acquisition) Act
A review of Avijit Guha’s Land, Law, and Left
Bitten in the backside by Nandigram, Singur, and the political developments that followed, the West Bengal government is wary of using the Land Acquisition Act to acquire land even for its own essential development projects. Mr. Subhas Naksar, state irrigation minister, recently proposed directly purchasing 14,210 acres for a protective embankment in the Sunderbands: an example of how the Bengal government will try to side-step the central act in the lead up to the 2011 state elections. And, it is unique in Bengal history. Whether it further corners the government - if some landholders disregard the overall importance of the embankment and simply refuse to sell - remains to be seen.
Successive governments in West Bengal have avoided using the central Land Acquisition Act to acquire land in the past too. But, only to substitute it with another more powerful law. Hark back to the period between 1948 and 1993. During these 45 years in Bengal the Congress and Left governments had an acquisition tool more powerful and more destructive than the central act in the form of the West Bengal Land (Requisition and Acquisition) Act, also known as Act-II. Act-II was purportedly created to settle millions of refugees from East Pakistan, but its power (which included not even needing to pay those displaced by acquisition) was used for a variety of development works.
Abhijit Guha’s Land, Law, and Left dissects how, in its 45 years of existence, Act-II was used by parties in power to acquire vast swathes of land, despite the same politicians having opposed the extension of the act from opposition benches. For example, Mr. Guha shows that in opposing the extension of the bill in 1957, Harekrishna Konar railed against the government for pauperizing lakhs of people in the name of development, citing examples where the government used bulldozers over standing crops of farmers. However, as Minister of Land and Land Revenue Mr. Konar had no qualms about extending Act-II in 1967 and 1970, stating that “this Act is necessary for quicker work.” Similarly, before he took the Chief Minister’s chair, Mr. Siddhartha Sankar Ray opposed the act on legal grounds calling it “an oppressive and jabardast piece of legislation.” During, his own tenure, however, the Bill passed without even a proverbial choon. In fact, the Bill was placed in the house, and successfully passed, 17 times. The year 1993 brought with it a message from the Centre to discontinue the act. Seeking to expedite pending cases, the Bengal government then declared that a staggering 15,000 cases of acquisition under Act-II were in limbo: this land could neither be returned to the original owners and nor could it be transferred to the central Land Acquisition Act.
Just for its insight into the legislative history of Act-II, Land, Law, and Left, is well worth a read. But, Act-II is only peripheral to Mr. Guha’s main focus: an analysis of particular cases of acquisition in Kharagpur block of West Midnapore district. By studying these acquisitions and their impact on specific communities, Mr. Guha provides an essential window into the process of land acquisition in Bengal after Act-II and before the eruptions of Nandigram and Singur.
Mr. Guha, an anthropologist associated with Vidyasagar University, has used Land, Law, and Left to stretch the margins of academic anthropology in India by focusing on displacement caused by a mainstream legislation, the Land Acquisition Act, amongst specific agricultural and tribal communities. Bracketed within the limitations of academic scholarship, it is an essential primer on the workings of arguably the least understood laws that have had immense impact on people and therefore on politics.
That it is land and its ownership which has once again rattled Bengal politics is not surprising for anyone even vaguely familiar with the history of the state. This time around it is the Land Acquisition Act, its amendment, its use, its abuse, its avoidance, and its very nature that is in the eye of the storm.
A fortnight ago, Mamata Banerjee put her foot down and stalled the Congress desire for swift passage of the Land Acquisition Amendment and Rehabilitation and Resettlement Bills. It appears likely that the bills will again be referred to the standing committee, yet to be constituted by the Ministry of Rural Development. Recommendations of the last standing committee (to which even Dr. Guha presented his opinions) were coolly ignored by the UPA in its unsuccessful attempt to pass the two Bills in 2008-09. There are considerable defects with the Bills, going beyond Ms. Banerjee’s reported objection to the clause which states that the government will acquire the remaining 30 per cent of the land for the requiring body. The present Bills continue to side-step defining “public purpose”, attempt to placate the idea of consent by offering “consultations”, harbinger further displacement in providing land for some of those displaced by projects, and take India no closer to the need of the century: scrapping of the land acquisition act in order to replace it with one that offers proper rehabilitation and only caters to projects without private interest built by the government according to the needs of particular local populations.
All governments need some law in order to acquire land for projects essential to the needs of local populations. That these laws have been either painfully laborious in implementation, have been used to cater to the needs of non-local interests, or have been a source of misery for the displaced is a sad chapter in India’s history. But, the fact is a law is needed. Mr. Guha’s treatise shows how in Bengal despite personally finding prevailing acquisition laws oppressive, politician after politician has used the same when in power. In attempting new projects without using the Land Acquisition Act, the present Left Front government might just be throwing the baby out with the bathwater. On the other hand, Ms. Banerjee’s stand against the two bills in their present form and against how the central act has been used in Bengal, though inflated in proportion, is well in line with the nature of opposition in Bengal history. The question is, if Ms. Banerjee were to come to power in 2011, what trick will she use to acquire land for the specific needs of Bengal’s residents?
============================
The real issues behind land acquisition
By Pranab Bardhan. The Hindu, August 1 2009
The opportunistic and partisan stalling of the Land Acquisition and Rehabilitation and Resettlement Bills in the Cabinet recently by Mamata Banerjee has provided an opportunity to rethink some of the important provisions of the Bills (which she is not concerned about, but should have been).
Under the prospective legislation, a company must first buy directly from landowners 70 per cent of the land required. The state steps in to buy the rest in case some recalcitrant landowners are holding out; even here, the sellers are guaranteed a 60 per cent premium on the average land price over the previous three years. While this is an improvement on the existing colonial land acquisition law, this is quite unsatisfactory, particularly from the point of view of stake-holders in agricultural land. Let us spell out the reasons:
First, while leaving the major part of the transaction to the market may stop the matter from becoming a political game of football in populist competitive politics (as has happened in West Bengal), it is an inadequate solution to a complicated problem. Even assuming that the purpose for which the land is to be transferred is a legitimate one from an economic and environmental point of view, Indian history is replete with instances of uninformed, cash-strapped peasants being induced to sell their land at nominal prices by the lure of ready cash from developers, speculators, and touts of large corporate interests. This is how many Adivasis have lost their land even in recent years. Even in the case of informed, market-savvy sellers, thousands of small, uncoordinated farmers are no match for a large corporate buyer in the bargaining process.
Of course, in many cases the State government did very little to get the landowners a good price; but there is potential here for community organisers (and panchayats) to get involved in ensuring a fair price. In particular, the provision of a 60 per cent premium on the past average price is not good enough. The average past price is for the land as agricultural land, whereas use for industrial or infrastructure purpose will probably multiply the value many times, the gain from which the farmer is deprived. So, over and above the value of the agricultural land being considered as a minimum floor of basic compensation, the farmers should be compensated with a share in the enterprise or company, so that they can benefit from future profits.
Of course, the poor farmer may not have the capacity to bear the risks of fluctuating share prices. Here the role of the state is to put the farmers’ shares of the new company in an independently managed trust fund which will bear the risks at the cost of some management fees. Out of this trust fund, the farmer should be paid a steady “pension” (or annuity) every six months or so. Given the large gap between productivity in agriculture and the new activity for which the land is acquired, the farmer can be assured of a reasonable stream of pension. This will go a long way in assuaging the anxieties of an uncertain future that the farmer may contemplate in selling the land.
Also, a regular pension may be more advisable than a one-off cash payment, which often tends to get frittered away. In case the land is acquired for public infrastructure building (where there may not be any direct company profits to be shared), the land should be given out by the farmer on long-term lease with the rent periodically readjusted in accordance with the current value of surrounding pieces of land and the rental increases deposited in a trust fund.
Secondly, a land sale displaces not just landowners, but other stakeholders as well (sharecroppers and agricultural labourers working on the land, for example). In West Bengal, the government had announced compensation to be paid to registered sharecroppers (which Ms Banerjee never paid much attention to). But the state also needs to be involved in some form of welfare payments (and job training and so on) to unregistered sharecroppers and landless workers.
Thirdly, the state often needs to get involved in building roads, providing electricity, water supply and so on for the new company, and this may require coordination in the land transaction itself between the transactors and the state right from the beginning.
Of course, politicians often lack credibility in any process of obtaining fair compensation to land sellers. Cases of politicians, middlemen, and contractors defrauding poor sellers of their compensation and resettlement rights are far too many. So it may be desirable in some cases to hand over the responsibility of determining fair prices and managing the process of transfer and resettlement to an independent commission, provided political interference with the working of such a commission can be minimised and enough opportunity is given to community leaders and organisations to serve in such commissions or present their cases at hearings before the commission, and to generally act as watchdogs in the whole process.
Thus, what is at stake with the new Bills is much larger and deeper than Ms Banerjee’s political gripe.
The author is a professor of economics at the University of California, Berkeley.
By Ramaswamy R. Iyer. The Hindu. August 7 2009
The debate about the displacement of people caused by various developmental projects has been going on for over two decades. Without going into that history in detail, we may note that the Government of India finally notified the National Rehabilitation and Resettlement Policy 2007 in October 2007, and followed that up with the Rehabilitation and Resettlement Bill 2007 and the Land Acquisition (Amendment) Bill 2007. Those Bills have lapsed and have now to be introduced afresh in the new Lok Sabha. There have been reports that Railway Minister Mamata Banerjee is unhappy with the Bills. There have also been protests against the Bills by many NGOs.
Superficially, the Bills seem to include a number of good elements. There was a demand for a Rehabilitation Act and here is a Bill; the much-criticised Land Acquisition Act is being amended; ‘public purpose’ is being re-defined; governmental acquisition of land for private parties is being reduced; ‘minimum displacement,’ ‘non-displacing alternatives,’ consultations with the people likely to be affected, and so on, find a place in the Rehabilitation Bill; a Social Impact Assessment is provided for; an Ombudsman is being provided for the redress of grievances; and a National Rehabilitation Commission is envisaged. Why then are the Bills not being welcomed?
Let us consider the Land Acquisition Amendment Bill first. At first sight, the deletion of all references to companies gives us the impression that acquisition by the state for private parties is being eliminated, but that is not the case. The original Act had the wording “for a public purpose or for a company”; the words “or for a company” are now being omitted; but the definition of “public purpose” itself is being changed to include a (supplementary) acquisition for “a person” (including a company). If the private party purchases 70 per cent of the required land through negotiation, the balance 30 per cent can still be acquired by the government for that party. This means that sovereign compulsion will be brought to bear on those who are not inclined to sell their land, and also that state patronage for industrial houses can continue. Incidentally, it will be seen that the definition of ‘public purpose,’ instead of being made stringent and narrow as many had recommended, is being widened.
Moreover, it was necessary not merely to rule out (or limit) the acquisition of land for private parties under the Land Acquisition Act, but also to ensure that rural communities are not taken advantage of by corporate bodies in unequal negotiations. There is no such provision in the Bill.
Judging by its name, The Land Acquisition Compensation Disputes Settlement Authority will apparently deal only with compensation issues. A longstanding criticism of the Land Acquisition Act has been that the ‘public purpose’ for which land is being acquired is not open to contestation. There seems to be no change in that position.
One wonders whether the bar on the jurisdiction of the civil courts and the establishment of a Dispute Settlement Authority instead is in fact a good thing to do. There is room for misgivings here.
Turning now to the Rehabilitation Bill, the provision for a Social Impact Assessment seems very good, but the impacts are rather narrowly confined to physical assets (buildings, temples), institutions, facilities, etc. Social impacts must be more broadly understood to include the loss of identity; the disappearance of a whole way of life; the dispersal of close-knit communities; the loss of a centuries-old relationship with nature; the loss of roots; and so on. It is good that the SIA will be reviewed by an independent multi-disciplinary expert body, but it should first be prepared by a similar body. The provision for a Social Impact Assessment clearance is good, but not enough: it should be part of an overall clearance for displacement. If the felling of trees and interference with wildlife and nature in general require statutory clearances, should not the displacement of people be subject to a similar requirement? Such a clearance must come from an independent statutory authority and not from the bureaucracy. The clearance must of course be subject to certain conditions and must be revocable in the event of non-compliance or lapses; and the revocation clause should be actually used.
The terms ‘minimum displacement’ and ‘non-displacing alternative’ are music to the ears, but the application of this criterion is left to a late stage when the consideration of options may no longer be possible, and the decision is left to the Administrator for R&R. In other words, this crucial decision is entrusted to the bureaucracy.
An impressive structure of institutions has been specified, but their responsibilities and powers have not been spelt out. Administrator, Commissioner, project-level and district-level R&R Committees, Ombudsman, Monitoring and Oversight Committees, National R&R Commission: what each will do, how they will be inter-related, what decision-making powers each will have and in relation to what aspects, and so on, are far from clear. Everything is covered by the phrase “as may be prescribed.”
Words such as “wherever possible,” or other similar phrases are scattered throughout the Bill. For instance, group settlement is laid down, but qualified by the phrase “wherever possible;” training is to be provided “wherever necessary;” there are also qualifications such as “if government land is available,” “preferably,” and so on. They seem innocuous, but all of them involve decisions. Such hedged-in requirements can hardly be mandatory: they are likely to become discretionary, with the discretion vesting in the bureaucracy.
The Ombudsman provision is a good one, but ‘grievance’ has been narrowly defined to cover only the case of “not being offered the benefits admissible.” Grievances could relate to many other things: non-participatory project decision, failures of consultation, non-compliance with the minimum displacement condition, non-inclusion of a person in the ‘affected’ category, and so on. How the Ombudsman will be appointed, how the Ombudsman will function, etc., are left to be ‘prescribed.’
Taking the preceding points together, it appears that the precise manner in which this seemingly benign and enlightened legislation will actually work in practice will be entirely determined by the delegated/subordinate legislation, that is, the rules that are made under it.
The National Monitoring Committee seems totally bureaucratic, except for the non-mandatory association of some experts (the operative word is “may”). No civil society or NGO participation seems envisaged.
In the case of the Sardar Sarovar Project the basic principle in force (though it may not always be complied with) is: rehabilitation must precede submergence. The present Bill retreats from that position and requires only “adequate progress in rehabilitation” prior to displacement. This is a retrograde step. Besides, who will decide the adequacy of the progress?
The elements of the rehabilitation ‘package’ seem inferior to the policies already adopted in projects such as Sardar Sarovar and Tehri. Moreover, cash in lieu of land is envisaged in several places. This is fraught with danger. Eventually, cash may well become the main form of compensation.
In the event of deliberate or inadvertent lapses or non-compliance or deviations, what consequences will follow? The Bill is silent on this. Without such sanctions, how can the provisions be enforced? Far from sanctions for non-compliance, there is a sweeping indemnity provision!
In addition to those primary points, there are many others, some of them quite important, that need consideration. They cannot be set forth in detail here for want of space.
The conclusion that emerges from this quick examination of the two Bills is that there are many weaknesses and questionable features in these Bills which need to be rectified. Opposition to the Bills is therefore warranted. However, the very fact that the government is thinking of a rehabilitation law and of amending the Land Acquisition Act is an achievement for public opinion. It has taken more than two decades for the debate to reach this stage. Opposition to the Bills should be carefully modulated so that we can proceed further from here and not lose what has been gained.
==================================
West Bengal Land (Requisition and Acquisition) Act
A review of Avijit Guha’s Land, Law, and Left
Bitten in the backside by Nandigram, Singur, and the political developments that followed, the West Bengal government is wary of using the Land Acquisition Act to acquire land even for its own essential development projects. Mr. Subhas Naksar, state irrigation minister, recently proposed directly purchasing 14,210 acres for a protective embankment in the Sunderbands: an example of how the Bengal government will try to side-step the central act in the lead up to the 2011 state elections. And, it is unique in Bengal history. Whether it further corners the government - if some landholders disregard the overall importance of the embankment and simply refuse to sell - remains to be seen.
Successive governments in West Bengal have avoided using the central Land Acquisition Act to acquire land in the past too. But, only to substitute it with another more powerful law. Hark back to the period between 1948 and 1993. During these 45 years in Bengal the Congress and Left governments had an acquisition tool more powerful and more destructive than the central act in the form of the West Bengal Land (Requisition and Acquisition) Act, also known as Act-II. Act-II was purportedly created to settle millions of refugees from East Pakistan, but its power (which included not even needing to pay those displaced by acquisition) was used for a variety of development works.
Abhijit Guha’s Land, Law, and Left dissects how, in its 45 years of existence, Act-II was used by parties in power to acquire vast swathes of land, despite the same politicians having opposed the extension of the act from opposition benches. For example, Mr. Guha shows that in opposing the extension of the bill in 1957, Harekrishna Konar railed against the government for pauperizing lakhs of people in the name of development, citing examples where the government used bulldozers over standing crops of farmers. However, as Minister of Land and Land Revenue Mr. Konar had no qualms about extending Act-II in 1967 and 1970, stating that “this Act is necessary for quicker work.” Similarly, before he took the Chief Minister’s chair, Mr. Siddhartha Sankar Ray opposed the act on legal grounds calling it “an oppressive and jabardast piece of legislation.” During, his own tenure, however, the Bill passed without even a proverbial choon. In fact, the Bill was placed in the house, and successfully passed, 17 times. The year 1993 brought with it a message from the Centre to discontinue the act. Seeking to expedite pending cases, the Bengal government then declared that a staggering 15,000 cases of acquisition under Act-II were in limbo: this land could neither be returned to the original owners and nor could it be transferred to the central Land Acquisition Act.
Just for its insight into the legislative history of Act-II, Land, Law, and Left, is well worth a read. But, Act-II is only peripheral to Mr. Guha’s main focus: an analysis of particular cases of acquisition in Kharagpur block of West Midnapore district. By studying these acquisitions and their impact on specific communities, Mr. Guha provides an essential window into the process of land acquisition in Bengal after Act-II and before the eruptions of Nandigram and Singur.
Mr. Guha, an anthropologist associated with Vidyasagar University, has used Land, Law, and Left to stretch the margins of academic anthropology in India by focusing on displacement caused by a mainstream legislation, the Land Acquisition Act, amongst specific agricultural and tribal communities. Bracketed within the limitations of academic scholarship, it is an essential primer on the workings of arguably the least understood laws that have had immense impact on people and therefore on politics.
That it is land and its ownership which has once again rattled Bengal politics is not surprising for anyone even vaguely familiar with the history of the state. This time around it is the Land Acquisition Act, its amendment, its use, its abuse, its avoidance, and its very nature that is in the eye of the storm.
A fortnight ago, Mamata Banerjee put her foot down and stalled the Congress desire for swift passage of the Land Acquisition Amendment and Rehabilitation and Resettlement Bills. It appears likely that the bills will again be referred to the standing committee, yet to be constituted by the Ministry of Rural Development. Recommendations of the last standing committee (to which even Dr. Guha presented his opinions) were coolly ignored by the UPA in its unsuccessful attempt to pass the two Bills in 2008-09. There are considerable defects with the Bills, going beyond Ms. Banerjee’s reported objection to the clause which states that the government will acquire the remaining 30 per cent of the land for the requiring body. The present Bills continue to side-step defining “public purpose”, attempt to placate the idea of consent by offering “consultations”, harbinger further displacement in providing land for some of those displaced by projects, and take India no closer to the need of the century: scrapping of the land acquisition act in order to replace it with one that offers proper rehabilitation and only caters to projects without private interest built by the government according to the needs of particular local populations.
All governments need some law in order to acquire land for projects essential to the needs of local populations. That these laws have been either painfully laborious in implementation, have been used to cater to the needs of non-local interests, or have been a source of misery for the displaced is a sad chapter in India’s history. But, the fact is a law is needed. Mr. Guha’s treatise shows how in Bengal despite personally finding prevailing acquisition laws oppressive, politician after politician has used the same when in power. In attempting new projects without using the Land Acquisition Act, the present Left Front government might just be throwing the baby out with the bathwater. On the other hand, Ms. Banerjee’s stand against the two bills in their present form and against how the central act has been used in Bengal, though inflated in proportion, is well in line with the nature of opposition in Bengal history. The question is, if Ms. Banerjee were to come to power in 2011, what trick will she use to acquire land for the specific needs of Bengal’s residents?
============================
The real issues behind land acquisition
By Pranab Bardhan. The Hindu, August 1 2009
The opportunistic and partisan stalling of the Land Acquisition and Rehabilitation and Resettlement Bills in the Cabinet recently by Mamata Banerjee has provided an opportunity to rethink some of the important provisions of the Bills (which she is not concerned about, but should have been).
Under the prospective legislation, a company must first buy directly from landowners 70 per cent of the land required. The state steps in to buy the rest in case some recalcitrant landowners are holding out; even here, the sellers are guaranteed a 60 per cent premium on the average land price over the previous three years. While this is an improvement on the existing colonial land acquisition law, this is quite unsatisfactory, particularly from the point of view of stake-holders in agricultural land. Let us spell out the reasons:
First, while leaving the major part of the transaction to the market may stop the matter from becoming a political game of football in populist competitive politics (as has happened in West Bengal), it is an inadequate solution to a complicated problem. Even assuming that the purpose for which the land is to be transferred is a legitimate one from an economic and environmental point of view, Indian history is replete with instances of uninformed, cash-strapped peasants being induced to sell their land at nominal prices by the lure of ready cash from developers, speculators, and touts of large corporate interests. This is how many Adivasis have lost their land even in recent years. Even in the case of informed, market-savvy sellers, thousands of small, uncoordinated farmers are no match for a large corporate buyer in the bargaining process.
Of course, in many cases the State government did very little to get the landowners a good price; but there is potential here for community organisers (and panchayats) to get involved in ensuring a fair price. In particular, the provision of a 60 per cent premium on the past average price is not good enough. The average past price is for the land as agricultural land, whereas use for industrial or infrastructure purpose will probably multiply the value many times, the gain from which the farmer is deprived. So, over and above the value of the agricultural land being considered as a minimum floor of basic compensation, the farmers should be compensated with a share in the enterprise or company, so that they can benefit from future profits.
Of course, the poor farmer may not have the capacity to bear the risks of fluctuating share prices. Here the role of the state is to put the farmers’ shares of the new company in an independently managed trust fund which will bear the risks at the cost of some management fees. Out of this trust fund, the farmer should be paid a steady “pension” (or annuity) every six months or so. Given the large gap between productivity in agriculture and the new activity for which the land is acquired, the farmer can be assured of a reasonable stream of pension. This will go a long way in assuaging the anxieties of an uncertain future that the farmer may contemplate in selling the land.
Also, a regular pension may be more advisable than a one-off cash payment, which often tends to get frittered away. In case the land is acquired for public infrastructure building (where there may not be any direct company profits to be shared), the land should be given out by the farmer on long-term lease with the rent periodically readjusted in accordance with the current value of surrounding pieces of land and the rental increases deposited in a trust fund.
Secondly, a land sale displaces not just landowners, but other stakeholders as well (sharecroppers and agricultural labourers working on the land, for example). In West Bengal, the government had announced compensation to be paid to registered sharecroppers (which Ms Banerjee never paid much attention to). But the state also needs to be involved in some form of welfare payments (and job training and so on) to unregistered sharecroppers and landless workers.
Thirdly, the state often needs to get involved in building roads, providing electricity, water supply and so on for the new company, and this may require coordination in the land transaction itself between the transactors and the state right from the beginning.
Of course, politicians often lack credibility in any process of obtaining fair compensation to land sellers. Cases of politicians, middlemen, and contractors defrauding poor sellers of their compensation and resettlement rights are far too many. So it may be desirable in some cases to hand over the responsibility of determining fair prices and managing the process of transfer and resettlement to an independent commission, provided political interference with the working of such a commission can be minimised and enough opportunity is given to community leaders and organisations to serve in such commissions or present their cases at hearings before the commission, and to generally act as watchdogs in the whole process.
Thus, what is at stake with the new Bills is much larger and deeper than Ms Banerjee’s political gripe.
The author is a professor of economics at the University of California, Berkeley.
Monday, November 2, 2009
VAT, SEZs and Federal Politics
The legal regime surrounding SEZs raises a host of issues concerning the relationship between different levels of government. For instance, whether state governments (including through urban development authorities) are (or will) usurp the authority delegated to panchayat and urban bodies is something that continues to be debated.
One area where the conflict is likely to be particularly intense is with respect to taxation. In the process of working out so-called 'anomalies' in the tax code, SEZ promoters and firms operating within their boundaries have lobbied heavily for policy changes. This has manifested itself most recently in the form of complaints by these actors that they are treated unfairly when it comes to VAT applied to products sold by SEZ units within India's Domestic Tariff Area (DTA).
As reported recently, a collection of state governments are opposing a move by the commerce ministry to do away with VAT on goods sold into the DTA. States, not surprisingly, see this as a good (and legitimate) source of revenue. The Government of India organization that represents SEZ promoters and units is, on the other hand, of the view that, because SEZ units already pay import duty on intermediate goods used to produce that portion of their production that is sold into the DTA, their products should not be subjected to VAT as well.
Whatever the legal merits of the case -- and there is disagreement as to whether the SEZ Act trumps other legislation in this respect -- it seems likely that the final decision, which requires the Finance Ministry's approval, will not be taken in a political vacuum.
One area where the conflict is likely to be particularly intense is with respect to taxation. In the process of working out so-called 'anomalies' in the tax code, SEZ promoters and firms operating within their boundaries have lobbied heavily for policy changes. This has manifested itself most recently in the form of complaints by these actors that they are treated unfairly when it comes to VAT applied to products sold by SEZ units within India's Domestic Tariff Area (DTA).
As reported recently, a collection of state governments are opposing a move by the commerce ministry to do away with VAT on goods sold into the DTA. States, not surprisingly, see this as a good (and legitimate) source of revenue. The Government of India organization that represents SEZ promoters and units is, on the other hand, of the view that, because SEZ units already pay import duty on intermediate goods used to produce that portion of their production that is sold into the DTA, their products should not be subjected to VAT as well.
Whatever the legal merits of the case -- and there is disagreement as to whether the SEZ Act trumps other legislation in this respect -- it seems likely that the final decision, which requires the Finance Ministry's approval, will not be taken in a political vacuum.
Subscribe to:
Posts (Atom)