Biggest Obstacle for the Modi Government

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It is expected that the new government at the Centre will make haste to kick start the floundering economy. Among the best options available will be the removal of road blocks that have obstructed for many years huge investments in major projects involving infrastructure, mining and manufacturing. Some oft-quoted numbers put the scale of such potential investment at over Rs. 15 lakh crores.

The primary causes for the holdup of these projects are land acquisition and clearances involving forest and environment issues. Just as the previous Congress government found it extremely difficult to clear the stuck projects, so will the Modi government. Why? Because the three issues mentioned above are closely interlinked. Let me show how.

Take a map of the country. Overlay on this a map of the forested area of the country. On top of this mark the areas with large mineral resources (coal, iron ore, bauxite etc.) and, on top of all of this, mark the places with significant tribal population. At once, it will be clear that forests, mineral resources and tribal population occupy common tracts of land. In other words, you cannot disturb one without encroaching on the others.

Back in the 1950s, when India embarked on its first wave of expansion of irrigation, industry and power generation, land acquisition was a non-issue. There were three primary reasons for this. One, the forest cover was adequate for the then population of 330 million, particularly the number of tribals staying within the forests and depending on forest products for their livelihood as well as the farming community contiguous to forest land. This created a sense of complacency about small areas of forest land being carved out for mining. Two, the pace of industrialisation was slow to begin with so the demand for land for industry was small and, therefore, did not ruffle many feathers. Three, activism opposing acquisition of farm land for infrastructure and industry had not yet taken birth in the country.

This enabled:-

1. Dams to be put up without much fuss about the amount of land swallowed up by their backwaters

2. Canals to be carved out of agricultural land with ease

3. Mining of coal and iron ore and bauxite taken up on a large scale in forests

4. And allotment of very large tracts of land to public sector industries for not only their manufacturing purposes but also big captive townships.

All this has changed radically in the last six decades. While the land area of the country remains the same, the population has exploded four times. India today has just 2.2 per cent of the world’s land area but over 17 per cent of the world’s population. On the other hand, only 10 per cent of India’s population form the land-owning class. This has altered the concept of land as a resource which was easily available to a very scarce commodity.

Now, everyone is after whatever land that is available. In the forests, the increased numbers of tribals no longer find forest produce sufficient to meet their needs and have taken to clearing up tracts within forests for agriculture. The agricultural community are finding it difficult to allocate their farmlands to the increased number of dependents. Rapid urbanisation has led to competitive demand for land by expanding cities and Modi’s dream of 100 new big cities will only add to this pressure.

The rise of activism has been, perhaps, one of the most dramatic hindrances to land acquisition for infrastructure, mining and industry. NGOs, some fifty years ago, were limited to a few dozen small ventures involved in rural uplift work. They have now multiplied manifold into a 3 million strong number of small to large organisations. Their range of work parallels almost what the government is doing but which is particularly active in matters involving the environment, land acquisition and human rights.

The greatest change that has taken place since those distant 1950s which can form formidable barriers to easy land acquisition are a host of new legislations regarding forests, the environment and tribal rights, enacted in the last 20 years. In fact, the logjam of over 200 major projects held up during the UPA-2 regime can, to a large extent, be ascribed to the application of these laws.

For example, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, replaces the old Land Acquisition Act of 1894. In theory, the new Act establishes regulations, provides for fair compensation and brings transparency to the process of acquisition of land. But, in practical terms, one of the biggest stumbling blocks in the new Act is the compulsory concurrence of 70 % of the landholders for Government projects and 80 % of the owners for PPP projects. This is a proviso where even a few stubborn owners can stall a project.

The other clause for providing compensatory land in lieu of the land given up is virtually impossible to fulfil in small, densely populated states like Kerala, Goa and Haryana where free land with the Government itself is so scarce. A calculation by some real estate developers has shown that if all the provisions of the new Act were met, the cost of acquired land would be unviable for any project. Mamata Banerjee’s Trinamul Party, which won the elections in West Bengal, partly on the basis of fighting against land acquisition for industrial projects in Singur, is now hoisted on its own petard as it tries to acquire land in fertile farmland for a new highway linking South and North Bengal. It is finding the going extremely tough.

So, let us not expect a miracle from the Modi government which will suddenly release the logjam of projects held up due to the land acquisition process. His best bet is to form a special team, including legal experts, which will first tackle the low-hanging fruit, involve the state governments in getting the land for such projects and then proceed with the more tacky ones. The team should also look at how the new Land Acquisition Act can be modified to make it more practical without harming the basic interests of the land owners. Certainly there will have to be a trade-off between the rights of land owners and the needs of development if the stalled projects are to progress.

By : Mr. N. N. Sachitanand

Veteran Journalist


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