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Let’s have a fair deal

by Harsh Mander, 5 July 2011

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The Hindustan Times

June 14, 2011

Land acquisition and involuntary displacement have been the fountainhead of enormous destitution of millions of invisible people since Independence. Generations of those sacrificed for ‘development’ are farmers and farm workers, and many are fragile tribal people and forest gatherers. By coercive displacement and dispossession, governments pauperise its poorest people, and its food-growers, so that the ‘nation’ can prosper and grow.

Rage at persisting State injustice of coercive displacement frequently spills onto the streets in violent protests; and, in recent times, has even led to the rise and fall of governments. The problem is further aggravated in these times of furiously paced industrialisation and urbanisation. Increasingly the scarcest resource is not capital but land. The traditional land hunger of the impoverished peasantry is being choked by the land demands of private industry. In non-democratic societies, people are forcibly evicted and their protests crushed to make way for industry and cities. But India rightly aspires to achieve rapid growth in an open democratic society. For this, it must make all people willing and equal partners in development.

At the heart of contestation is the Land Acquisition Act passed in 1894, which governments continue to use to forcibly acquire land from those who own and cultivate it. This colonial law is greatly weighted in favour of the principle of ‘eminent domain of State’, that the State is the ultimate owner and custodian of all land and natural resources in the country. The statute fails profoundly to protect the rights of affected people. It offers abysmal compensation based on under-valued registered sale deeds to those who lose land, and no rights of rehabilitation and resettlement. The law has weak redress and appeal mechanisms, and opaque and non-transparent processes. It is long due that this law is repealed, and replaced by another just, humane and transparent statute.

All land is acquired by the State because it claims that the land is needed for a ‘public purpose’. The 1894 law leaves the decision about what is a public purpose entirely in the hands of the executive — and in practice often to a single bureaucrat. This remnant of colonial tradition is untenable in a democratic state. Governments must explain to people affected what precisely is the public purpose, and why other non-displacing or less displacing alternatives, and especially why agricultural land or forest, needs to be acquired. People must have the legal right to challenge these claims, and the costs and benefits should be evaluated by independent experts in a Social Impact Assessment.

Compensation under the existing law is determined on the basis of sale deeds of land registered during the preceding three years. However, in most parts of the country, this tends to be greatly under-valued to save on stamp duty, and land owners get only a pittance compared to the actual market cost of the land. We estimate that under-valuation to save stamp duties can be up to half or one-third the market costs. Therefore, compensation should be computed by tripling the registered sale price of the land, and adding 100% solatium. This becomes six times the registered sale deed price.

The land owner feels further short-changed because real-estate builders often sell the land at tens or even hundreds of times the price at which they bought the land from the farmer. The land owner should therefore also get 20% of the appreciated value of the land every time the land is resold for 10 years after acquisition.

Since rural people often do not have the experience to handle large sums of cash in ways that ensure long-term income, they should be offered the option of receiving part or full compensation in the form of monthly payments for 33 years. This would be at an interest rate of 12% per annum of compensation, adjusted for inflation by adding 10% every year.

The most invisible and vulnerable people affected by acquisition are those who do not own land, but lose their livelihoods due to displacement - sharecroppers and tenants, agricultural workers, artisans such as blacksmiths who make agricultural tools. Also pauperised are those dependent on the common lands, forests or water bodies for their livelihoods, including forest gatherers and hunters, fisher-folk and boatmen. Under the present law, they are not entitled to any compensation, because governments compensate only those who own land. This must be corrected, by giving such persons monthly compensation equivalent to 10 days minimum wages per month, for 33 years.

One of the most contested issue is whether governments should be allowed to compulsorily acquire land for private industry. One view is that acquisition for projects which are privately owned and pursued for private profit should be barred, because the State should not become an agent of private profit. Let affected people be free to choose or refuse to sell their land. But others believe that industry is a public good, as it creates jobs and wealth, and governments therefore should acquire land for them.

A middle path recognises that if governments do not regulate these processes, private companies would exploit unorganised, small cultivators and pay them a pittance. The landless, tenants and artisans will have no rights to compensation, nor any rehabilitation rights. The State should therefore bar all private industry from directly purchasing lands for private farmers, but instead they should be bound to provide the high rates of compensation and rehabilitation that is guaranteed by a new humane and just law.

Today, we have the opportunity to prevent further suffering and oppression of millions of farmers and workers for the sake of industrial and urban growth. At last the country is waking, slowly and belatedly, to the urgent moral — and political — imperative of preventing further State injustice in the name of development.

( Harsh Mander is director, Centre for Equity Studies )