Land Acquisition: Let's have a land audit first.

In the days to come the battle over Land takeover is only going to be intensified, both in Parliament as well as on the streets. As various farmer organizations get ready to storm Jantar Mantar on Mar 18, and Anna Hazare planning a padyatra from Mar 30, the government itself is getting ready to face the tough challenge in Rajya Sabha where it lacks the numbers.

While the Lok Sabha passed the LandAcquisition bill with 11 minor amendments, most of these already existing in the 2013 law, the painstaking defense by Rural Development Minister Birender Singh has failed to cut much ice. In the shrieking debates and the deafening noise that preceded and still continues, the real issues behind the need for a law that allows forceful takeover of land have disappeared from public scrutiny. In this article I am trying to analyse some of the main arguments that have been floated to justify land acquisition without the consent of the farmer.

I hear again and again that the availability of land is coming in the way of development. Projects worth Rs 4-lakh crore are held up because of non-availability of land. While the government has failed to provide a list of projects that have been held up, Economic Survey 2015 does not list land as a limiting factor for infrastructure projects to take off. It states that the projects are held up because of unfavourable market conditions, and lack of investor interest. Secondly, if land availability was a factor I don’t see any reason why over 576 Special Economic Zones should have failed to perform.

A CAG report says that out of the 45,635.63 hectares of land notified for the development of SEZs, actual operations took place in only 28,488.49 hectares or 62 per cent of the land acquired. Neither did the SEZs create employment nor did it lead to manufacturing or industrial growth. And remember there was no environment clearance hurdle nor was there any social impact assessment required. Moreover, with all kinds of tax holidays, estimated to be in tune of Rs 1.75 lakh crore, the SEZs failed to perform. In a scathing comment, CAG says “Acquisition of land from the public by the government is proving to be a major transfer of wealth from the rural populace to the corporate world.”

I don’t think the government even knows how much of land already acquired is lying vacant. An investigation by a TV channel found that nearly 45 per cent land acquired in just five States is lying unused. In Orissa, for example, 3799 acres acquired for TISCO steel plant in Gopalpur in 1995 has still not been used. 

In any case, the government is eyeing 17 lakh acres of surplus land lying with public sector undertakings. With so much of land already available, I don’t see any reason why the available surplus land is not first put to proper use.

Further, the argument that the 2013 law needed to be changed since the Chief Ministers wrote against it is simply amusing. Let us not forget that the Chief Ministers of the coal mining States also opposed open auction of the coal blocks. But after a Supreme Court order cancelled 204 coal blocks, the auctions that are underway are likely to bring in revenue of Rs 15-lakh- crore. I wonder why in a market economy, where free enterprise is being promoted, the private sector can’t be asked to bid for land in open auctions taking the prevailing market price as the base price.

A study by IIT Roorkee estimates that in past 50 years some 50 million people have been displaced by ‘development projects’. With the oustees of Bhakra dam and Pong dam still not rehabilitated, land conflicts have erupted primarily because the government forcibly takes over land for the private entities in the name of ‘public purpose’. As several CAG reports have found out that the land acquired has finally gone into the hands of real estate firms who have made fortunes.

In 2013-14, a study by Washington-based Rights and Resources initiative found 252 conflicts over land acquisition. A Newsweek article sometimes back had pointed to 75,000 land conflicts, most of them bloody, in China every year. A recent report states that 28 lakh villagers have committed suicide in China in past 10 years. About 80 per cent of them did so because of forcible land takeover. Lawmakers in India therefore need to be doubly concerned about the resulting socio-economic unrest.

Actually, the commodification of land is part of a global design. Globally, an area equivalent to the cultivable area of China and India has already been acquired by private capital. For India, it was in 1996 that the World Bank had asked to move 40-crore people – twice the combined population of UK, France and Germany – from the rural to the urban areas in next 20 years, by 2015. In 2008, the World Development Report of the World Bank had asked India to hasten the demographic shift by going in for land rentals. It is primarily for this reason that agriculture is deliberately being starved of resources, and farmers’ income is being kept low to force them to abandon farming and migrate.

Pitting agriculture against industrial development is a faulty debate. At a time when jobless growth is the norm anywhere and everywhere, industry cannot absorb even a fraction of the growing workforce. In past 10 years, between 2004 and 2014, only 1.5 crore jobs were created despite a high growth rate. Encouraging entrepreneurship in the rural areas and providing land to the landless is therefore the only sensible way to revitalize the economy. If the drought-prone village of Hibre Bazaar in Maharashtra can now boast of 60 lakhpatis, I see no reason why it can’t be the norm in the rest of the country. #

Nothing Special about Special Economic Zones (SEZs)

Some years back I delivered a memorial lecture at Rohtak in Haryana. The Haryana chief minister Bhupinder Singh Hooda was in the chair. Knowing how flawed his economic thinking of acquiring large tracts of farmland for the sake of industry in the name of Special Economic Zones (SEZs) was, I dwelled upon the dangers and the disastrous fallout waiting to happen as far as livelihood security of the masses and country’s food security was concerned. 

Hooda was obviously irked, and visibly angry. Cutting me short, he got up and intervened saying how right his policy was for the farmers, and for the state’s ultimate economic progress. I asked him where and when was a public discourse held to know whether SEZ was a good investment, and he retaliated by challenging me to an open discussion anytime later in Chandigarh, which of course never happened.

Several years later, I stand bemused to find Hooda take a complete u-turn: “It is true that SEZs have not succeeded, not only in the state but in the entire country. There was economic slowdown in the entire world, so SEZs could not succeed,” he said recently. Although he acknowledges the fault, what he says in its defence is also not correct. And this is true for the entire policy making process, which still refuses to accept the fundamental flaws in the SEZ policy. As IMF chief economist and an advisor to the prime minister, Raghuram Rajan, had stated way back in 2007: “India’s SEZ policy was a tax give-away and was likely to shift Indian production to SEZs rather than create new economic activity.” He was quoted in the Wall Street Journal as saying “these zones would be viable only if they focused on providing superior infrastructure, business-friendly regulations and exemptions from labour laws rather than offering often misdirected subsidies, guarantees, and tax sops that a stretched budget can ill-afford”.

By October 2011, ministry of commerce had approved 583 SEZs. As per news reports, one-third of these – approximately 202 -- have been already withdrawn. A majority of those who are still struck are known to be looking for better escape options. For instance, the realty giant DLF with its joint venture partner Hubtown, has recently sold its IT SEZ in Pune to a private equity firm Blackstone for Rs 810-crore. In Haryana, Reliance Haryana SEZ Limited (RHSL), a Mukesh Ambani’s Reliance Ventures Ltd and Haryana State Industrial and Infrastructure Development Corporation (HSIDC), is the latest one to drop out. It had earlier shelved its Jhajjar SEZ and converted it into a model economic township to be implemented by a new company.

Reliance was seeking further extension for its Gurgaon SEZ, but has been finally asked to return 1,383 acres that it got from the state government. In Andhra Pradesh, 109 SEZs were approved, only 36 are operational. The Andhra Pradesh Industrial Infrastructure Corporation has scrapped the MoUs with the major defaulters and taken back the land assigned, including from Unitech and Caparo. In Haryana, only 3 of the 46 approved SEZ are in operation. 

SEZ were promoted as a engine house of economic liberalisation. These were primarily set up to prop-up the slowing economy. These were supposed to drive exports, and, in turn employment and growth. All kinds of sops – tax waivers and giveaways – including precious land provided at a throwaway price, were given to energise manufacturing and exports. To blame the economic slowdown therefore for the failure of SEZs to take-off is to find an easy escape route for the fundamentally flawed policy. Even before the global economic meltdown of 2009-10, SEZs had failed to live up to the expectations and at the same time failed to demonstrate any significant upswing in export growth. In reality, it provided a massive windfall for realty developers. SEZ were perceived as real estate ventures and therefore an opportunity for land grab where developers could use 65 per cent of the acquired land to build hotels, restaurant and apartments.  

Why blame Hooda alone, prime minister Manmohan Singh too was mesmerised by the SEZ potential. At an award ceremony in Mumbai in 2007, he had said: “Special Economic Zone (SEZ) is an idea whose time has come.” Supported by all political parties, including the Left Front, he actually launched a nationwide campaign to forcibly acquire and make available land on a platter to the industry, displacing lakhs of farmers. What began with SEZ subsequently continued in the name of industrial development. Farmers resisted, and pitched land battles were waged across the country, the likes of which have not been witnessed in living memory. The resulting social unrest across the rural spectrum was considered to be a small price the country must pay for achieving long-term development. As companies lined up for SEZs, most state governments went aggressively into property dealing.  

As expected, not many states have realised the social and economic benefits that were originally promised. Except for the IT sector, which has very cleverly used SEZ to seek further extend the tax exemption period, the enthusiasm from other sectors was clearly missing. In essence, SEZ was a misplaced idea whose time had lapsed much before it caught the imagination of policy makers in India.