The Controversy About The Land Acquisition Act

The Narendra Modi government is facing stiff opposition from the Congress Party and most other opposition parties on the amendments to the land acquisition Act enacted in 2013 by the Manmohan Singh government. The Modi amendments seek to remove some hurdles in acquisition of land for public purpose such as infrastructure or industry. The Opposition is engaged in an exercise painting Narendra Modi as an anti-farmer PM and peddling themselves as the saviours of the farmers. Excepting for Modi, Manmohan Singh and Sonia Gandhi, other opposition leaders by and large have their roots in the farming community. But their opposition to the Modi amendments to the law does not emanate from their concern for the farmers but the huge chunk of farmer votes. They don’t want the farmers’ votes to shift to Modi (read his party the Bhartiya Janata Party or the BJP). Most Indian politicians own large parcels of farm land, either in their own names or in the names of their family members. The top among them also own land in the names of non-existent owners or benami, Farm income for them is another excuse to convert their black money in to white and evade tax, as there is no tax on farm income in India. All the same, it is one of the most influential lobby in the country. It needs to be tackled not only intelligently but also with care and love to remove any iota of suspicion about the government’s intention. The Opposition is doing exactly that: creating suspicion in the minds of the farmers or kisan. They are painting the Narendra Modi government as anti-farmer and pro-corporates! In the tight situation in which the Modi government has landed itself presently, it has to think out of the box. It must seek innovative ideas to surmount the problem in a manner that more than serves the farmers’ interest that the Opposition has yet not even thought of, while at the same time achieve its goal of economic development in a visible manner that achieves the goals like Make In India and Sab Ka Sath Sab Ka Vikas. Here is one idea to fulfil this objective.

Sonia Gandhi & President Pranab Mukherji

The idea is to dispossess the farmers of their land without alienating them from their lands. It might sound contradictory, but it isn’t really. Instead of buying the land from the farmer and thereafter transfer it to the project owners, private or public sector, treat it as an essential input like other such inputs, for example, capital, machinery, manpower etc. Treat the farmer as a shareholder in the project. Take him as an equal investor, entitled to the profits and dividend from such projects. It needs to be remembered that land is the only source of perennial livelihood of the farmers in India (in fact, anywhere in the developing country situation). Therefore, it creates resistance developing into a conflict easily, unless compensated with an equally beneficial proposition. Farm land looks less valuable in comparison to the urban land, which is called developed land. The farm land is sold at dirt cheap rates, but urban land or developed land goes at very high price. The difference can be more than 1:1000 or even more. So, there are windfall profits for the developers. While the farmer gets short changed, the developers becomes rich overnight. It is due to the position occupied by the two in society; the farmer categorized generally as backward and the developer as forward. Narendra Modi should aim to narrow this gap by keeping the ownership of the farmland with the land-owning farmers in the project, without alienating them from the land.

Once the policy decision is in favour of this proposal, there would need to be done something more. For the gestation period of the project, the farmers shall require to be paid cash compensation to maintain themselves at the same rate they were earning before being dispossessed. It will be for the limited period of project commissioning and cease on the date profits start getting distributed. It will be better rehabilitation as compared to the uncertain assurance of a job for one member of the family. In this manner, income gets distributed in the same manner as it was being done before dispossession. This idea is already in practice in urban areas, especially megapolises like Mumbai, Delhi, Bangaluru etc. where real estate developers invest money in developing private properties at their own cost without the titleholder investing a rupee. The developers build several storey on the piece of land, gives one or two dwelling units as per the contract to the owner free of cost, hire a suitable residence for the owners at his (builder’s) cost for the duration till the new units are handed over and sells the remaining units, making huge profits. Here the owner is unable to invest the necessary funds and the builders develop it to benefit both the owner and himself. The owner gets his property plus some extra money. The same model needs to be applied to farm lands. Industry put up on such land will earn profits and develop, giving the farmer only a part of the profits, but that payment will be decidedly more than the return from the land from farming. If the land is used for developing residential properties, the investor is bound to reap windfall profits. Shared honestly, the farmer will get returns which will be much better than the annual farm income. Nobody will be able to create any suspicion in the minds of the farmers in such a case. The Opposition will have no story to sell to the farmers and mislead them. The politics in the name of the farmers will come to an end. No project will suffer due to politics.  There will be a substantial reduction in poverty, farmers will get assured incomes and gradually move from farm to the factories as employment opportunities grow. Meanwhile agricultural production is likely to grow with modern farming. Farmers themselves will have more income and surplus to invest in farming.

For dissolving resistance to development programs, the Narendra Modi government will need to think far ahead of its rivals. Now that it has replaced the Planning Commission by the NITI Ayog, it must work out a suitable scheme to enlist the cooperation of the farmers by launching a scheme of attractive compensation for acquisition of their land as suggested in this article, whereby the farmers only lose possession of their land while retaining their ownership over it. The amended Land Acquisition Act before the parliament currently, may provide for it.

Indian Lok Sabha

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