The land acquisition process will continue to remain at a standstill

narendra_modi
Vivek Kaul

It seems we are going to go back to the Land Acquisition Act 2013, which was passed during the time when the Manmohan Singh led UPA government was in power.

The 2013 Act which replaced the 1894 Land Acquisition Act had made the entire process of acquisition of land extremely difficult and time taking. The 2013 Act is the exact antithesis of the 1894 Act, which given the fact that it had been introduced during the time the British ruled India, allowed the government to acquire land at a drop of a hat and very quickly.

The 1894 Act had something called as the “urgency” clause.  As Jairam Ramesh and Muhammed Ali Khan write in Legislating for Justice—The Making of the 2013 Land Acquisition Law: “Section 17 of the Land Acquisition Act, 1894 was used to forcibly disposes people of their land in a frequent and brutal fashion by suspending the requirement for due process…Section 5A…allowed for a hearing of objections to be made but put no responsibility on the Collector to take those claims into consideration.”

What this meant was that people could complaint against the acquisition of land, but it was up to the Collector of the area where the land was being acquired whether to give them a hearing or not. Also, there was no clear definition of urgency. It was left “to the authority carrying out the acquisition.”

This clause allowed the collector to “take possession of the land within fifteen days of giving notice”. He could take possession of a building within 48 hours of giving notice. “The Outer Ring Road Project of Hyderabad and the Expressway in Uttar Pradesh are both striking (and recent) examples of acquisitions where large tracts fell pray to the urgency clause,” write Ramesh and Khan.

Given this, it was only right that the 1894 Land Acquisition Act was done away with. In fact, it should have been done away with long before it finally was.  The trouble is that the 2013 Act that replaced it, as I said was at the other extreme, and made the process of land acquisition next to impossible.

In fact, Ramesh and Khan even write: “The law was drafted with the intention to discourage land acquisition. It was drafted so that land acquisition would become a route of last resort.” Ramesh was one of the key movers behind the 2013 Act. Economist Rajiv Kumar estimated that it could take more than four years to acquire land, if all the processes were followed.

The Modi government tried to dilute the provisions of the 2013 Act and brought in the Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014, which made a few changes to the 2013 Act. The ordinance was signed by President Pranab Mukherjee on December 31, 2014. It made some changes to the 2013 Act.

As Anand Ranganathan wrote in a column on www.newslaundry.com: “Projects relating to national security or defence, including preparation for defence, defence production; rural infrastructure including electrification; affordable housing and housing for the poor people; industrial corridors; infrastructure, social infrastructure and PPP projects where government holds the land, there is no longer any need to obtain prior consent of 80% (for private projects) or 70% (for PPP projects).”

This was a step in the right direction. In the months to come a lot of noise was made around how land would be taken away from farmers and be handed over to corporates. This was totally incorrect. As Rajiv Kumar pointed out in a column in The Economic Times: “As many as 59% of rural households do not own any land. Another 28% have land holdings of less than 0.5 hectares. Therefore, 87% of the rural population is desperate to end their dependence on agriculture.
Only 0.5% of India’s farmers have land holdings larger than 10 hectares and in the vicinity of urban centres. They are the only ones who could be adversely affected by the proposed amendments to [Land Acquisition Act].”

But this was a point that the government did not manage to communicate to the people of this country. Narendra Modi addressed the issue in one of his mann ki baat programmes but there never really any follow up to that. Finally, the rhetoric against the ordinance unleashed by the Congress party seems to have gained credibility.

This probably explains the decision of the Modi government to go back to the 2013 Law. Further, there is an assembly election scheduled in Bihar later this year and this could have become a huge issue. Bihar is very important for the Modi government given that it elects 16 members to the Rajya Sabha, where the Bhartiya Janata Party does not have a majority. And the only way to get partymen elected to the Rajya Sabha is to first win the assembly election. Also, the Bihar election will decide if the Modi magic still persists. Given these factors, the land acquisition ordinance will be given a burial, at least for the time being.

One of the face saving gestures that has been put forward is that the states can go in for their own land acquisition laws. But what needs to be kept in mind is the fact that a state law cannot go against the central law. If there is a conflict between the two laws, the central law prevails.

Also, states cannot dilute the provisions in the central law. As Jairam Ramesh told Scroll.in: “For instance, if the central stipulates that consent of 80% of landowners be obtained, the states cannot reduce it to 70% but they can make it 90%…They can’t even do away with the consent clause.”

What this means is that the states cannot come up with a law which is radically different from the 2013 Land Acquisition Act. And this means that the land acquisition process for the setting up of industry and for building public infrastructure will continue to remain at a standstill.

The column originally appeared on The Daily Reckoning on Aug 6, 2015

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About vivekkaul
Vivek Kaul is a writer who has worked at senior positions with the Daily News and Analysis(DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System , the latest book in the trilogy has just been published. The first two books in the trilogy were published in November 2013 and July 2014 respectively. Both the books were bestsellers on Amazon.com and Amazon.in. Currently he works as an economic commentator and writes regular columns for www.firstpost.com. He is also the India editor of The Daily Reckoning newsletter published by www.equitymaster.com. His writing has appeared across various other publications in India. These include The Times of India, Business Standard,Business Today, Business World, The Hindu, The Hindu Business Line, Indian Management, The Asian Age, Deccan Chronicle, Forbes India, Mutual Fund Insight, The Free Press Journal, Quartz.com, DailyO.in, Business World, Huffington Post and Wealth Insight. In the past he has also been a regular columnist for www.rediff.com. He has lectured at IIM Bangalore, IIM Indore, TA PAI Institute of Management and the Alliance University (Bangalore). He has also taught a course titled Indian Economy to the PGPMX batch of IIM Indore. His areas of interest are the intersection between politics and economics, the international financial crisis, personal finance, marketing and branding, and anything to do with cinema and music. He can be reached at vivek.kaul@gmail.com

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