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For Inclusive, Non-Predatory Industrialisation

Land must be acquired fairly

by Praful Bidwai, 21 September 2008

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Kashmir Times, September 22, 2008

A rash of angry and sustained protests by farmers have erupted all over India against the forcible acquisition of land for industrial, mining and infrastructure projects. As the mobilisations sweeping West Bengal, Orissa and Jharkhand through Uttar Pradesh, Delhi and Haryana, to Maharashtra, Karnataka, Andhra and Kerala show, land acquisition leading to displacement has become India’s single most contentious issue. Land is now the main site of struggle between predatory capital and popular movements for rights.

Perhaps the most dramatic instance of this contention is Singur in West Bengal, where the Tatas plan to build the Nano car on 997 acres, some 400 acres of which were acquired forcibly from unwilling peasants, more than 2,200 of whom have refused to accept any compensation. They want a minimum of 300 acres to be returned to them from the ancillary units in the vendors’ park next to the car plant proper. As of now, construction has not begun on 36 of the 59 plots allotted to the vendors. But the Tatas have refused to return a single acre.

Intervention by West Bengal Governor Gopalkrishna Gandhi held out some hope of a solution through a joint committee, which included farmers’ and government representatives. But the government announced a "package" offering 50 percent more compensation and a measly 70 acres even before the committee reached a conclusion. Yet another confrontation may be brewing as the Tatas adamantly say they bear no social/public responsibility in Singur.

However, the public has subsidised half the cost of the car project. The Tatas have been given unconscionable "incentives", including full exemption from excise duty for 10 years, and from income-tax for five years, and land at throwaway prices. A compromise is eminently feasible if some of the vendors are moved across the highway and connected to the mother plant through an underpass. However, such is the logic of neoliberal capitalism that the Tatas are refusing to budge an inch, and the state government is behaving like a supplicant.

This is only one instance of the damage being inflicted by the juggernaut of predatory, dispossessing industrialisation under which capital seeks full control not just over production, but also over natural resources like land and water, while extracting huge concessions from governments and creating very little employment. The projects include Special Economic Zones (SEZs), mining, industry, highway development, and not least, suburban housing.

Under threat are thousands of square kilometres of land on which millions of livelihoods depend. Such industrialisation raises major issues of human rights, not just of landowners, but also of landless labourers, and the many practitioners of occupations who are dependent on the agricultural economy, from blacksmiths and electricians to barbers and milkmen.
It also raises a question about the feasibility and desirability of industrialising society without putting it through the pain, suffering and dislocations imposed upon it in the early decades of the Industrial Revolution in Western Europe, or in the later development of factory-based production in the Soviet Union, Japan and the Asian Tiger economies.
Above all, dispossessing industrialisation poses questions about the quality and content of our democracy. Can it guarantee a minimum of fairness in the land acquisition process and in the rehabilitation that follows? Or will it throw millions of people to the wolves? The struggles in Singur and Nandigram in West Bengal, Raigad in Maharashtra and Kashipur in Orissa have posed these issues up-front. The answers will influence politics in these states and beyond.

Uprooting or displacing usually vulnerable people is nothing new in India. Various studies estimate that between 35 and 50 million suffered that cruel fate during the first 50 years of Independence under "development" schemes, including large dams, and mining, metallurgical, chemical and power projects. The upper figure is close to the entire current population of a large West European country like France or Britain! The bulk of the uprooted were rural people, and a disproportionate number were Adivasis.
The area acquired between 1951 and 1990 under the Land Acquisition Act of 1894 (LAA) and other laws exceeds 150,000 sq km, a size larger than that of 143 of the world’s 190-odd countries, including Bangladesh, Greece or Nepal. What is new about displacement today is its increasingly urban location, growing absence of resettlement sites and alternative livelihoods, and the changed role of the state-which acts as a servile gendarme of private business.

The LAA is a colonial law, but it at least stipulates that land may only be acquired for a "public purpose", not for purely profit-oriented corporate activity. The SEZ Act 2005, other laws and recent Court verdicts remove this bar. Take SEZs. As many as 250 have been notified, covering 22,800 hectares (ha). They are located in less than a tenth of India’s 600 districts, with relatively better literacy and infrastructure. Just 20, mostly urban, districts-including major, high population-density cities like Pune, Ahmedabad, Coimbatore, Indore, Nagpur and Visakhapatnam-account for over 70 percent of all SEZs and their land area.

This at once multiplies the displacement quotient. The fact that two-thirds of all SEZs are in information technology/IT-enabled services further raises the quotient. Such enterprises are almost invariably in well-developed urban centres, and can be easily converted to high-value real estate. Thus, many SEZs might just be plain land scams, besides causing a huge drain on the exchequer through tax write-offs.

Even assuming conservatively that the notified SEZs areas have a population density of 5,000, the number of people liable to be displaced works out to a frightening 1.14 million. This is more than 18 times higher than the number of people officially claimed to have been directly employed in the zones: 61,015. Even going by the commerce ministry’s estimate that 14 persons get indirect employment when 10 new direct jobs are created, the total employment gain (145,335) from the SEZs would be just about one-eighth of the loss through displacement-an obnoxiously, repugnantly, unequal bargain.

The destructive potential of such land-based and -intensive "development" will not remain confined to the wiping out of the poor or middle peasant whose land is acquired. It will unfold fully as property values get grossly inflated in and around city after city to a point when even the salaried upper-middle class cannot buy modest housing.

A particularly obnoxious phenomenon is the promotion of irrational SEZs along with other extravagant infrastructure projects. A case discussed in this Column last February is the Rs 2,581-crore project Mihan (Maharashtra Multi-Modal International Hub Airport at Nagpur), promoted by the state-sponsored Maharashtra Airport Development Company. Mihan was explicitly floated to "firmly put India on the fast track to economic superstardom", no less.

This will affect as many as 13 villages, where people have been given notices of land acquisition at Rs 5 lakhs an acre, when the going market price is Rs 2 to 5 crores! The people’s protests, sustained for over two years, have not made the government budge an inch. If the state goes ahead with forcible acquisition, violence is likely to break out.
Similar irrationalities exist in other projects too, prominently including POSCO in Orissa, and the Mahamumbai and Gurgaon SEZs. These are aggravating popular frustration over land acquisition. In response, the government is planning to move a Bill to amend the LAA. This places a part of the responsibility for acquisition on private industry. It must acquire 70 percent of what it needs, only then will the state step in to procure the remaining 30 percent

The Bill bases compensation for land on "market value" and allows for possible new benefits for the landowner, such as a four-fifths share of the premium from the resale of the land. It also makes "resettlement" integral to acquisition and mandates "social impact assessment".

However, this hides the many flaws in the Bill, which defines "public purpose" too broadly, to include the infrastructure, mining, and "any other facility that may be notified...", as well as "any other purpose useful to [the] general public" By asking the state to intervene on behalf of the private promoter to the extent of buying 30 percent of the land, the Bill smuggles in through the backdoor what the LAA explicitly forbids: acquisition "for companies" [Sec 3 (f)].

The "market value" concept doesn’t measure to the what is really needed, namely replacement value, including rehabilitating people comprehensively and compensating them for the loss of livelihoods on principle that everybody shall be better off after the project than before it.

The government must not rush the Bill through Parliament, especially in the coming, unacceptably brief and tokenist session. Two other points follow. First, only independent commissions, with grassroots participation in them, should be asked to determine the right price of land, based on replacement value, including the true costs of rehabilitation. And second, we must respect the "precautionary principle" and not acquire land unless it can be demonstrated to increase welfare. This alone can give real content to the right to life.