The Hindu Business Line : Making the acquisition painless

There is bound to be increasing demand for large parcels of land as the country urbanises rapidly and more industrial projects come up. It is incumbent on the government to ensure that both investors and farmers get a fair deal. But this requires a wider perspective than what either the government or the farmers or the investors have shown so far, says P.V. INDIRESAN, suggesting a way out.

"Hoisted with his own petard" is a Shakespearian expression, which means "blown up by your own explosive". "Caught in his own trap" is another way of expressing the same situation; it describes the predicament in which the West Bengal Government finds itself in Singur and Nandigram.

Opponents of the State Government would be tempted to gloat over its discomfiture. Agitators in Singur and Nandigram are oblivious to the fact that, when their turn comes to hold power, they too will be hoist with their own petard.

Whatever may have been the mistakes made by the West Bengal Government and its leaders in the past, in the larger interests of the nation, it deserves support in the present case. We should all join hands to find a satisfactory solution to the problem of collecting enough land for major projects.

This problem owes its origin to Nehru. He persuaded the nation that, because inherited property was unearned, the incumbents did not deserve property rights. Mesmerised by his vision of social justice, Parliament amended the Constitution to give state the power to acquire land without paying compensation at market rates.

Socialism untenable

Times have changed; socialism has been exposed as untenable in a globalised world. Yet, in government circles, attitudes have not. Many people continue to think that power emanates from the seats on which they sit. I have myself heard senior officials say, "I will notify the land; farmers have no option". Farmers do have an option; if the laws are unfair, they will take the law into their own hands. Ours is an agitationist democracy. Since Independence, we have had innumerable agitations. The government has lost much of its authority over nearly a third of the districts. Government after government has seen its authority eroded only because it did not respond to legitimate requests from affected people. Our governments react only after much damage has been done. They are too authoritarian to accommodate people's desires well enough to prevent agitations. There is a feeling among our rulers that our people, farmers in particular, are irresponsible. That is not true. I have myself obtained both in Tamil Nadu and in Chattisgarh written assurances from Panchayat Board members to subscribe several thousand acres of land for establishing a PURA.

Need for transparency

Provided the operation is transparent and fair, farmers are as eager as anybody else to contribute what they can for modernising their villages.

Farmers have four kinds of assets: (a) inflation protected capital in the form of land; (b) inflation protected income from the crops they cultivate; (c) employment on their farms for themselves and their children, and, last but not the least, (d) the prestige of land ownership. To be fair, farmers should be compensated in four ways — with permanent assets, regular income, employment for self and children, as well as with continued prestige.

The cash, that the state offers, compensates one, and only one, of the four assets that farmers possess. The draconian laws that our Constitution permits makes even that compensation too low to be satisfactory. As an alternative, I have offered the following system of compensation, which most farmers accept without reservation. Farmers are offered a built-up property, a shop preferably whose value is two-three times the market price of their land. A rent which is two-three times what they currently earn from their land.

Guarantee that the rent will be indexed to the price of grain, and in that manner protected against inflation.

Preference for locals

First preference for local persons for all jobs created by the new investment. If no local person qualifies for appointment, a scholarship (including living expenses) to study/train as long as the beneficiary can cope.

I have suggested compensation of two-three times the value of current assets and income in order to raise rural incomes close to urban levels.

The offer of a shop is to let the farmer continue to be self-employed and not become a servant of an impersonal organisation, whether government or private. The offer of a job is conditional, tenable only when the person qualifies, not otherwise.

Accountability for all

According to news reports, the Union Government is thinking of more liberal compensation with job guarantees thrown in. Job guarantee is an error in the opposite direction. When persons are selected on merit, they can be disciplined for non-performance.

Those appointed merely because they owned land earlier, or because they used to work on farms, cannot be disciplined for non-performance. They cannot be disciplined because the justification for their appointment never gets extinguished. However poor their performance, they will always continue to be ex-farmers, ex-farm labourers - entitled to the job.

Skill upgradation

For that reason, I have suggested study/training scholarships for children, even for self, if so desired. Skill upgradation protects investors; it helps rural folk to stand tall and compete for jobs they would never be able to do otherwise. It is less expensive.

As an additional precaution, in exercises of this nature, I have always proposed several alternative locations and got the farmers to compete among themselves. Such competition is crucial.

Farmers are human: Once they get monopoly power, they will not only expect monopoly prices, they are never satisfied with what they get, however generous that may be. A competitive bid avoids such psychological stresses. Only competitive bids will ensure that the final price is fair to both parties.

There are occasions, airports for instance, where land has to be in one large chunk. Most times that is not necessary; however much land is desired, it can be parcelled into lots of relatively small size. If that is acceptable, land acquisition can be confined to areas of relatively low value; fertile land lying in between can be left as they are. That will avoid the main objection of critics, that development projects despoil valuable agricultural land. In most cases that is not necessary.

Idealism vs reality

Ideally, the government should not enter into the picture except where public amenities such as roads or water works are involved. Airports too need government action. In course of time, India will need at least 500 airports.

If the government were wise, it would identify suitable locations now itself and keep them free of encroachment till the time the airports become necessary. If they do not do so now, large tracts of land will not be available when needed. We will have a repetition of the sad events that West Bengal is witnessing. Unfortunately, our government has little patience with such suggestions for a more peaceful future.

Our country is getting urbanised rapidly. We have no option but to convert more and more farmland into urban settlements. We need a policy that will make it possible to locate them almost entirely in low value farmland.

We need a compensation mechanism that will repay farmers in all four forms of assets they now possess. At the same time, it would be folly to burden new investors with the responsibility of employing farmers and farmhands in their own businesses.

Both investors and farmers need a fair deal. Employing displaced persons in jobs for which they are unqualified is not satisfactory either way. A deal that is fair both ways requires a wider perspective than what either the government or the farmers or the investors have shown so far.

(This is 192nd in the Vision 2020 series. The previous article was published on January 8.)

(To be continued)

(The author is a former Director of IIT Madras. Response may be sent to: indiresan@gmail.com)

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