Land Bill favours corporate firms…..Sarajit Majumdar
It seems the peasant struggle in Singur and Nandigram following land acquisition in West Bengal, as elsewhere in India, has weighed heavily in lawmakers’ minds.
The rural development ministry has released its draft Land Acquisition and Rehabilitation and Resettlements Bill (LARR) 2011 for nationwide discussion. The draft refers to acquisition of land for public purposes and it applies when 100 acres or more are acquired. A careful reading reveals that distributive injustice is built into the bill.
Who is the land acquired for? Certainly any land for public sector projects will serve the public purpose of acquisition. But the bill stretches beyond state-owned projects. It says, “Government acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose (including PPP projects but other than national highway projects). The government does not envisage acquiring land for private companies for private purposes.”
What could be a private company’s ‘stated public purpose’? A private company will use land only for commercial proposes. Nowhere does the draft bill state clearly as to how and what kind of public purposes private companies could serve.
The West Bengal government slipped while acquiring land in Singur for Tata Motors Limited in 2006 by applying the Land Acquisition Act of 1894. It tried to argue that since Tata Motors would propel socio-economic development and generate employment for local people (the company denied this) it would tantamount to serving a public purpose. As if Tata Motors could produce cars without employing any labour!Based on such poor logic, the WB government proceeded to apply the colonial Land Acquisition Act, 1894.
Between public and private purposes, there lies a palpable gap. If a government acquires a piece of land for public purpose, the project on such a land belongs to the society. The railways, national highway, government hospitals or other such public institutions are always projects with public ownership. These units may conduct normal business to finance its activities by imposing user charges. There may be surplus from the business, yet the institutions are not capital accumulators.
On the other hand, the projects of private companies will not be under public ownership. Private companies may run business the same way as public sector institutions, but they invest only with a view to accumulating capital. There is no other incentive for them to invest. The animal spirit of accumulation distinguishes private from public investments.
It is true that a public infrastructure project facilitates private gains for common people also. Once it is a private business unit neither its conditions of production, such as machinery, plant shed, etc. are held by public nor its final fruit, profit. Who pays for it? Obviously the state.
The bill, while sticking to the colonial land acquisition Act of 1894, has provisions for compensation with added rehabilitation and resettlement benefits to land-losers and those who lose their livelihood. For rural land-losers the compensation amount is fixed at six times the market value of land and other assets. In urban areas it is at least twice the market value of lost assets.
As for rehabilitation and resettlement, both land-losers and livelihood-losers will get Rs3,000 subsistence allowance per month for 12 months and Rs2,000 per month annuity for 20 years, indexed to inflation. There will be mandatory provision for employment of one person per affected family or a one-time grant of Rs2 lakh for the family.
There are special provisions for the Scheduled Tribes. This means that even tribal land is not spared.
All these add up to a huge burden on the state exchequer. In other words, the LARR 2011 will be subsidising private businesses.
The whole exercise is a redistribution of resources from farmers to business corporations. Consider an investor developing a Special Economic Zone. The developer can earn untaxed profit for the first five years, thereafter conditional taxation depending on reinvestment of profit.
This is so designed in the SEZ Act, 2005. No part of the profit percolates to the common people or land-losers. Where is the distributive justice of land acquisition for SEZ? It basically accentuates inequality across different sections of people in the society. This will hold true for non-SEZ private investments too. This failure to effect distributive justice calls for a rethink.