Land Bill

Over the last few months the Land Acquisition Bill (LAB) has come in for considerable flack and everybody has an opinion on the bill though I sometimes wonder how many have even bothered to read the bill and understand it. Most arguments are emotional and based on what they think is the truth based on who they believe, who in turn has commented  with or without reading the bill.

Well this is not to debate the bill since let me honestly say that I have not read the bill but  have read excerpts and information as published data. My opinions are based on what I have read and what I understand and not based on someones opinion. But the idea here is to introduce the elephant in the room as I see and understand. I feel that this is crucial before one decides to debate the LAB.

But first it is important to get the definitions right. Land acquisition is where the government or a government entity decides to acquire land for whatever purpose it has decided to by following a established procedure in law. The government then pays a compensation and it is assumed that in the ultimate analysis the govt will take over the land after overcoming  whatever hurdles that come up including legal. You don’t say no to such requirements. All other transactions are purchase of land and between 2 entities in private.

Firstly let us look at what are the kind of transactions that happen over land.

Case 1 :

Individuals or corporates buy small areas of land for whatever purposes they may want to. It is also eminently possible that a corporate entity or an individual is buying the land to create a land bank for future use and to sell at higher prices for profit. This is pure business and  always the dealings are between the owner of the land and the purchaser. Invariably these are at  prevailing market rates and the quantum of land procured is small and does not attract any attention at all. At best this could run into a few acres. The land can be agricultural or non agricultural.

Case 2 :

A government entity or department plans a project which can be a flyover, a dam, a mine, roads, a new public sector factory, a space station, an airport, a defense installation or any of the other myriad reasons. Here the quantum of land required is huge running into hundreds of acres. It is also expected here  always that the proposed usage of land will turn into public good by way of drinking water or irrigation or jobs etc  and spur development in that area which will benefit many since the value of the area goes up with time, sometimes rather quickly with windfall gains.

Case 3 :

This is a variation of case 2 except that the entity that seeks to procure land is a private company which is planning a huge project investing billions of rupees, promising jobs and development in the area. Here again valuation of land usually goes up sometimes with windfall gains.

Now let us look at how the system operates in reality.

Case 1 is not a matter of concern since it invariably is a small transaction and does not attract attention of the public.

The REAL challenges come with case 2 and 3 since large tracts of land are required and such transactions come to the attention of the public. Let us examine the way the system works.

In either of these 2 cases a small select band of officers, ministers, politicians, company executives are the first to know  about their plans for a project which requires huge land. Also for confidentiality and practical reasons these are not advertised or known to people at large. The investments required are HUGE and run into Billions. So the investment approval process is handled by a small set of highly trusted people and discussions held privately. If it is a private company they invariably go meet a Minister or Chief Minister or even the Prime Minister. Even a government department or entity will discuss this with one of the above.

Now the project is in principle accepted by all concerned but at this stage nobody is sending out official letters or coming out with advertisements or news reports.  The paper work now starts and the time taken will be long and again access to information limited to a select few.

Let us for example say that this is a mega international airport in a city X that has been conceived. Some within the select band of people concerned who are more enterprising, have access to funds and have contacts, swing into action at this stage. While an officer or manager may go out and buy a couple of small plots of land in the target area the big fish which would involve select businessmen,  politicians, their relatives go to the target area and in a slow but sure manner start buying up land  at prevailing market rates. Some unscrupulous politicians may even twist or threaten some people to buy their land. This again is not advertised. They buy land adjoining the roads leading to the airport and usually they buy from whoever is willing to sell.  Many an “honest” officer or manager will buy small plots of land and enrich themselves and become rich legally. I am not passing any judgments on this but stating what often happens.

By the time the paperwork for the project is over and the news is ready to be announced at a appropriate gathering/ location for political benefits the bulk of the land required is already owned by a invisible cartel associated with the project. They have bought it at very low prices. Once this news is public many a enterprising individual then starts scouting the target area to buy whatever land they can get. Some poor uninformed guy will always sell the land thinking he got a better price than his neighbors who sold it at much lower prices sometime earlier.

By the time the project comes up for execution (which can be sometimes 2 to 5 years later) the bulk of the land is already gobbled up from farmers or others at a pittance. What is left is the pockets of land unsold and which are also required for the project. These pockets are what is acquired under what is known as land acquisition. The government here gets involved either for itself or for the private entity to mop up the balance land.

On the contrary the smart folks with insider knowledge will also sell off land before its value disappears in projects like say a dam submerging areas. In either case the insider knowledge is utilised to the hilt by a limited set of people for private gain.

Readers will remember the controversy pertaining to a SEZ in Mumbai where the argument was about “Contiguous land”. In Bengaluru the airport was announced at Devanahalli, then shifted to Bidadi then again settled in favour of Devanahalli. Remember the DLF land deal in Harayana? The reasons for such stunts are not far to seek.

This now brings us to the actual act of land acquisition. Now most people and rightly so will outrage about forcible acquisition, how farmer is deprived, environmental damage  and so on, but remember, the bulk of the owners are not the REAL people affected. They are willingly selling the land because they are making windfall gains, converting black to white, becoming rich and powerful overnight etc.  The REALLY affected are those who sold off the land much earlier and now left fuming in frustration. Those who held on and did not sell for whatever reason also get rich quickly and count themselves lucky.

Some exceptions are where forest land that already belongs to government is sold/leased for mining/ dam etc and thus displace people.

While it is a fact that farmers get affected and they lose land (because they sold it to the middleman insider who actually made the millions) truth is that the REAL losers are the labourers who depended upon such land for a livelihood. It is easy to use the word farmer to ignite passions and take the moral high ground, but fact is that the same people have probably already looted the same farmer, made a windfall gain and now shedding crocodile tears.

Fact is that not everybody is a land shark with insider information and some genuine farmers do get affected but to think that when 2500 acres of land is acquired every single owner is a poor farmer being exploited is a joke. Original owners were exploited, yes, but by middlemen and not the government and for whom the battles are ostensibly being fought for today. Of course a crafty politician can always mobilise the previous owners and start agitations to reap political benefits.

Given this reality, since people are not exactly stupid and over time have learnt what is happening the LAB was cleverly brought in whereby many clauses were introduced of which 3 have become contentious. These are Compensation, Social/Environmental impact studies and Consent.

If there was a way to define, determine and assess what exactly is social/environmental impact and how to do it in a method that everybody follows within a given time frame then this would not have been an issue. But reality is that there are as many opinions as there are experts on this subject and since no time frame is specified and whatever anyone says can be disputed and disagreed with, this has become a huge hurdle.

As regards consent given an argumentative country like India with a vibrant democracy getting 80% consent is next to impossible. But remember also that as described earlier when the target land is pre-acquired by interested parties obtaining 80% consent is not difficult. The challenge is to be able to acquire close to 80% consent in advance. The exploitation of insider information is something that cannot be avoided even in the current situation. So again the emotional arguments that get votes are false. Also when government land or forest land is being acquired the 80% consent clause is not a deterrent.

What becomes a deterrent is the politics that get played over this issue. Whether one is working within the government or outside, as a politician information always gets leaked internally. This would enable an opposition politician to stage manage a situation wherein his henchmen procure land and then refuse to part with it. A few hundred meters of land has prevented the NICE road from being completed where hundreds of kilometers are ready but the road cannot be used since those occupying the few meters refuse to sell and keep litigating.  Just go talk to the common man on the street to find out who owns the land adjacent to many a highway and you will not hear the name of a single farmer who lost his land as we keep hearing now. You will hear names of popular powerful politicians and builders with political affiliations.

Also this is a legal and smart way to accumulate HUGE funds for one self and their parties. So those who lost in this race or late in the game climb on to the bandwagon of emotions using farmers as a pawn till they also get a share of the looted pie. Once that is done and they become a part of the clique their protests suddenly disappear.

If one sees the compensation this now gives double windfall to the insider middleman. He legally gets a far higher value for the land procured at low prices. The genuine land owner who held on also gets a fair compensation. The compensation clause has not been changed in the amendments though media and opposition continue to harp on it by silence. The original "farmer" still gets nothing.

It is mainly the other two clauses, especially the consent clause that is  sought to be modified since those close to the corridors of power for long have accumulated HUGE land banks using which they can blackmail and prevent many a project from being implemented.  All  these are projects already approved and so this means that the insider friends already have possession of large chunks of land.  The party that brought this LAB into law is sitting pretty since if they lost the elections the opposition would find it difficult to implement projects approved and so seen to be failing. If they came back to power they can anyway get the required consent. So its a win win for them.

While there are no two reasons regarding protecting farmers and their  livelihood, reality is that in the current context it is politics of power, money and control and not the farmer. He is just a fashionable name to leverage. Debate the land bill for all it is worth but unless the large scale exploitation of insider information is prevented this debate is sheer hypocrisy.