Tuesday, May 20, 2014

Land Reforms: Some thing Most Important for India to Progress!

Some time ago, I wrote a blog article about the poor land owners' agitation in Odisha State of India against an ambitious private integrated steel plant (ISP) project promoted by the South Korean steel major POSCO with the active support of the state government. 

Post liberalization, the only state which might have implemented large scale private industrial projects in record time perhaps is Gujarat under the chief minister-ship of Shri Narendra Modi who is shortly to take the mantle of Indian government as the new Prime Minister. World renowned companies such as Reliance Industries or Adani Group  would not have become a reality without enough land to set up their large industrial manufacturing and service facilities.

Unfortunately, Asian countries such as India with their below average human development indices, have been markedly behind in effecting land reforms. This Wikipedia article gives an overview of land reforms in major continents in the recent past. 

In India, land reforms have not been in the agenda of the national government since its independence. Land reforms have been left voluntarily to the state governments. Only two states, West Bengal and Kerala, tried to do some thing regarding it during their initial years of existence. Later on, no political party got enough strength and wisdom to do some thing in this connection for the general good of all people. 

Just before its exit from power, the outgoing central government of India in 2013 enacted a law which is known as  The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013  [Get the pdf copy of the Act Here!] This law has now replaced the previous Land Acquisition Act of 1894 which has been a bone of contention between the land owners, the governments and the industry for many years in the recent years due to the manner in which the government authorities operated it. 

While the old law has given too much power to the government officials and had been considered as anti landowner,  the new law is believed to be anti industry. The new law perhaps burdens the private industry with too high costs towards land procurement. The new law apparently provides for high compensation for the land owners. However, it does not ensure future protection of a land owner who becomes landless when his land has been taken over for some industry or development project.

When a land owner's land is taken over for any project, he should not only get a fair compensation, but also get fair protection to live with dignity. All land owners whose houses have been taken over together with the land should be provided with decent housing before his property is physically taken possession by the project authority for whom the land is acquired. They should also be ensured of reasonable and steady future incomes as a compensation for disturbance of their traditional living.

On the other hand, it should also be necessary to protect the industry from incurring heavy initial costs on investment towards acquisition of land. With heavy land costs, many projects might become techno economically non-viable. On the other hand, large projects enhance overall economic activities in its vicinity. Many times it has been seen that when large projects come up and stabilize, the land costs in and around the project go up due to higher commercial opportunities.

This creates a peculiar situation of disadvantage for the people whose lands have been taken over at prevailing market rates. For example, in the rural areas of India where there is no activity other than rural agriculture, the land costs are low to the tune of say, Rs.10 per sq.ft. In the near vicinity of a large commercial project, the cost could be around Rs.200 per sq.ft or even as high as Rs.1000 per sq ft or more. 

Thus, the person whose land is acquired would feel as cheated even when he gets a price of 3 to 5 times more than the market rates due to the probability of the land prices shooting up many times more in the vicinity of any large project once the project becomes commercially operational. Such a situation often causes some people becoming reluctant to part with their land even when they are offered much higher price than the current market rates.

In the previous law, the government forcefully captured the land for any project declared as 'public interest' and paying the affected people prices as decided by them to be paid at the whims and fancies of the officials concerned. The new law is made to help the land owners, but its efficacy is yet to be seen. On the other hand many private entrepreneurs are not so happy about the new provisions of the land acquisition law.

Another problem that arises for any commercial or infrastructural project requiring land is the complex and vague rules that have emerged under the environmental protection acts and rules. Vague laws and rules give enough room for whims and fancies of some authorized persons to play havoc and unending litigation. No business man would like to land in to such complications under normal circumstances! A typical example of this type of a problem is the environmental definitions that are applied to the sloping lands of the western ghats of Kerala while similar situations in states like Himachal Pradesh are dealt with different yardsticks! Obviously, the definitions and yardsticks change from person to person!

The question is how India tackles such problems? As the PM designate Mr Narendra Modi keep telling: "Less government, more (better) governance" The idea is great, but the vast lot of people with high ambitions for getting a slot in some 'offices of profits' would not allow such a thing to happen. It can happen when people become honestly interested in doing good for the people and not for themselves!

So, land reforms in India is not difficult to be achieved, provided the people of India, high and low, are willing to keep the nation in front than their own individual priorities. 

Again the first principle to be remembered for all land acquisition is this: The individual land owner's willingness to part with his land possession is to be respected. The land owner should be treated with dignity. The government has to ensure that the land owner does not become landless and homeless when his or her land is taken over. Not only they are paid reasonably well for their lands, a portion of the land acquired should be utilized for creating a well planned and well designed housing colony for the displaced land owners. This should be in addition to the monetary remuneration paid.

All government officials involved with land acquisition should be sensitized by proper training so that they do their work efficiently in a time bound manner with out antagonizing the people. Concerned laws need to be amended if required. While laws are drafted, the government should also check the clauses with regard to their compatibility for good governance. The practice of passing laws for the sake of it should stop.

These are not difficult for any government if the people of the government are great visionaries and true leaders!

In any case, land reforms in the positive manner on an urgent manner is what India needs now for progress and development. The latter again should be for ensuring enhanced employment to the Indian youths and not for unjustified accumulation of wealth in the hands of a few.

What do you think? 

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