Land Acquisition – breaking the deadlock

For a more productive land acquisition law V Kumaraswamy A storm of sorts seems to be brewing in the capital on the land acquisition bill. The fundamental features of the recent laws as well the current bill are cash compensation, higher % of consent required, and many resettlement obligations on the acquirer. Land is in short supply, since the population especially of those who are poor and skill deficient dependent on land is increasing fast. Neither side of the political spectrum seems to have got the situation facing the farmer correct and tried to evolve more appropriate solutions and compensation structures. Let us see some crucial issues. Firstly, people in rural areas – poor and the farm owners suffer from both occupational immobility and locational immobility. The conditions they live in are pathetic and filthy, unhygienic and impoverished. If they had any sense of ambition and yearning for better living, they would have escaped it long ago and migrated to other more productive areas or cities and towns. Both these factors are largely psychological and afflict even educated and skilled people. For example, if the nation runs short on engineering skills and promulgates that Chartered Accountants with a basic science degree would all start doing engineering jobs, would it be comfortable. Or perhaps mandate pilots to become turbine operators (or reverse) due to shortage in either – after all an aircraft in a pure technical sense is a gas turbine ultimately.  Expecting farmers to take cash compensation and shift away from their traditional jobs and adopt some other skills is totally unrealistic and irrational. Secondly, the asset characteristic. Land is a permanent asset not capable of being destroyed by fire, earthquake, storm, or whisked away by enemy. We have largely ignored this ‘secure’ nature of assets and tried to compensate them with cash (whatever the multiples which despite its 4 times seems inadequate given the proportion of ‘cash’ usually involved). Most Indians are yet to get familiarised or comfortable with financial assets. Rural and the poor are at the end of the queue in this regard. Thirdly, land is not just inflation proof but due to decreasing per capita availability, has kept appreciating at a much faster rate than general price levels, the stock markets or many other asset classes in most areas. The current compensation in financial terms and job guarantee do not have this characteristic. Again land gives some fixed yield every year which satisfies living needs in perpetuity without compromising the quantum or quality of the base asset. Any compensation formula which does not recognise these factors, is bound to meet with resistance. More appropriate land acquisition It is important to combat the locational and occupational mobility issues. The government (through an independent authority) should acquire (by mandate or otherwise) land in parcels in small sizes (even in lot sizes of 1 and 2 acres) as and when they come up for registration in private deals. This can be an on-going exercise. Given the land prices in such areas with an annual budget of Rs 5-10,000 crore it may be possible to acquire 50-100K acres per annum. The government can also come up with special schemes to acquire such lands. Even the Boodhan movement managed to gather some land. Families who have migrated and no longer interested in agriculture or those who are in agriculture by proxy can take advantage of such schemes. When any private industry or public purpose requires land acquisition of bigger chunks like 500-1000 acres, those ousted can be compensated with these land so that the displaced do not have to move far. They can also pursue the same vocation they are accustomed to. Hopefully, many would be more willing to shift from one end of city or town to the other end say within 10-12 km vicinity rather than face uncertain vocation with an unknown asset class. If private sector requires land, it can be asked to deliver compensatory land within a vicinity of 50-100 km which the Government can use as land bank for future compensation whether for same project or others. Monetary compensation could be limited to loss of house and the cost of new ones, expenses in shifting place of living and establishing new places of work, and incentives to break the inertia and phobia. If these can be provided in kind, it may be faster. Once the government builds up its land bank, the process will be a lot faster. With compensation in kind in known locality and in the same vocation, acquisition will definitely be far faster than under the proposed laws. Of course there can be nothing that is ideal. But if there is real creation of jobs for the locals, alongwith the above measures, the resistance will be a lot lower. The government should tap into the excess land bank available with Railways and PSUs to build its land bank for compensatory purposes.  It should also examine ways to exploit the existing land better. For example build a 2nd tier railway track on top of the existing one in most metros or exploit the spaces on top of track for building urban amenities, courts, government offices or even malls and shopping centres. Absorbing people from agriculture requires development of industry and other sectors. Total resistance against such enterprises or procedures which prove time consuming may be to the detriment to the very cause being taken up – creating employment.

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