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Is Land Acquisition Bill good for common man? Weighing the pros & cons of the law

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By Harshmeet Singh

Congress’ opposition to BJP’s amended Land Acquisition Bill reached the streets of Delhi on Monday with a number of leaders including Anand Sharma, Ghulam Nabi Azad, Jairam Ramesh and Ambika Soni gathering at Jantar Mantar and addressing their supporters. Reports of local police resorting to lathi charge and water canon against Congress supporters also surfaced in the media.

This key Bill has become a bottleneck in the ongoing Budget Session of the parliament with the Congress staging a walk out last week when the Bill was passed with 9 amendments in the Lok Sabha. For the Bill to eventually take the form of an act, it would now have to pass through the Rajya Sabha as well, where the BJP doesn’t have a majority. The opposition (mainly comprising of the Congress and the Samajwadi Party) are adamant on sending the Bill to the standing committee, which would ensure that the current ordinance expires. They will have a chance to have their way when the bill comes up for consideration in the upper house.

Attaching urgency to the Bill, the BJP had issued an ordinance in December last year. When the President asked the Government about the reason behind such urgency to issue an ordinance, Arun Jaitley reportedly told him that projects worth $300 billion were on hold due to certain provisions in the 2013 Land Acquisition Act which this bill seeks to amend.

“If at any time, except when both Houses of Parliament are in session, the President is satisfied that circumstances exist which render it necessary for him to take immediate action, he may promulgate such Ordinance as the circumstances appear to him to require.” All such ordinances issued by the President when either house is not in session cease to operate after six weeks from the reassembly of the Parliament. This explains Government’s urgency in passing this critical bill.

Context of the Bill

‘Land Acquisition’ essentially refers to buying of land from an unwilling seller. In this case, it would exclusively include the Government buying land from the land owners for development projects. The first law in this regard was framed by the British Government in India in 1894 which gave the Government power to acquire any land for public purposes (no ifs no buts!). Since this law gave immense power to the Governments at the centre and the states, no one bothered about changing it and the Governments frequently acquired lands for public projects and for setting up PSUs after the independence. Post the LPG reforms of 1991, the Government started giving lands to the private players as well, hoping to script a glorious growth story.

The land owners (farmers in most cases) were seldom compensated for their land. There were no provisions for their rehabilitation and resettlement which meant that their families were left to suffer. Such acquisition didn’t require the consent of the land owner either. Moreover, in many cases, the land owner was just given a few days’ notice to vacate the land. Though the land was taken on the name of ‘development’, these farmers never became a part of such development.

Small disagreements took the shape of protests over the years. A number of such protests were seen at different places such as Nandigram, Singur and Sardar Sarovar Dam. With opaque land acquisition practices becoming the norm, there was never a bigger need for a transparent land acquisition bill. The current bill in question, which seeks to bring certain amendments in the Land Acquisition Act passed by the UPA government in 2013, has been termed as ‘anti-farmer’ by the opposition parties in the parliament and Anna Hazare on the streets.

Pros of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015

  • The original act of 2013 considered as many as 13 cases of land acquisition as ‘exceptional’ and these were thus excluded from the act. These included land acquisition for metro rail, national highways, railway lines, atomic energy projects, petroleum and mineral pipelines and others. The new amendment includes all such cases in the Act and thus provides similar rehabilitation and resettlement benefits in these cases.
  • The ordinance also gives the power to the Government to acquire multi crop irrigated land, if it is meant for the projects related to industrial corridors, defence, national security, rural infrastructure including electrification and social infrastructure. This would ensure that such projects are fast tracked and the bottlenecks are removed with considerable ease.

And now the cons

  • The most visible con in the amended bill which is being voiced by the opposition is that it takes away the need for consent of the land owner if the land is being acquired for any of these five purposes – rural infrastructure, industrial corridors, affordable housing, defence and public private partnership projects. While the Government supports this clause and attaches it to its ‘aim for development’, the opposition is up in arms saying that this would lead to land getting grabbed at will. Notably, the new act also exempts these five areas from any Social Impact Assessment, an observation many have overlooked!
  • The Act of 2013 provided that if the acquired land is unused for five years, it must be duly returned to the owner. But the provisions in the ordinance has replaced it with ‘five years or any period specified at the time of setting of the project’, thus giving the government a free hand at deciding the fate of the project and the land.

Race against time

The second phase of the Budget session ends on 8th May. If the government doesn’t manage to pass the bill in the upper house during the budget session itself, the ordinance would stand void. Since the Government is free to issue the same ordinance any number of times, it would be safe to assume that the Government would finally get its way with the amended bill. But when and how remains to be seen.

Next Story

Is NYAY Going To Be A Game Changer for Congress?

The concerns about funds being used for harmful purposes cannot be ruled out. It is due to these challenges many policymakers suggest that instead of making welfare payments to poor households in the form of unrestricted cash transfers the government should focus on in-kind transfers.

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Congress on Friday promised to create one crore jobs across the southern state
Congress state units given more power for 2019 battle- wikimedia commons

By Amit Kapoor & Manisha Kapoor 

The idea of launching Nyuntam Aay Yojana, a cash transfer scheme that intends to provide Rs 72,000 per year to the poorest 20 per cent Indian families, by the Congress Party if it comes to power, has stirred a debate among the policymakers about whether the move is economically viable or is just a tactic by the Congress Party to garner votes in the upcoming general elections.

The discussions are foreseeable, provided that this intervention to ensure basic income to the poor households will cost the country somewhere between 1.5 per cent to 3.4 per cent of GDP, a number higher than the government’s expenditure on healthcare and education. The implementation of NYAY means an additional cost between Rs 3.6 lakh crore to Rs 7.2 lakh crore per year.

To put things in perspective, the expenditure of the proposed scheme is 2.2 times the budget of all centrally sponsored schemes. The party claims that they have worked out all the fiscal calculations before launching the scheme. However, this will be a major dent in India’s budget expenditure and will explode the fiscal deficit from the current 3.4 percent to 6.8 percent.

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An impact evaluation study by UNICEF in Sub-Saharan Africa showed that with the exception of temporary price rise during payment period, cash transfers has no impact on the prices. Pixabay

Apart from fiscal prudence, the other immediate concern surrounding the scheme is the identification of beneficiaries and the database that will be used for this. There is no official income database available with the government at the individual level and since most of the poor work in unorganised rural areas, there is no direct way of verifying their incomes such as through a payroll or income tax.

The proponents of the approach state that a good starting point could be Socio Economic Caste Census of 2011 if one goes by multi-dimensional aspect of poverty. However, one can’t ignore the fact that even if the scheme defines poverty by assets and not income for quick exclusion rules, the data is outdated. A scheme targeted at reducing poverty can’t use data that is seven-eight years old. Even if one ignores that, it should be noted that there are major methodological issues with how data was collected. This is reflected in the discrepancies that exist in the data collected through SECC and other governmental data. A fresh survey for the identification process will lead to possibilities of corruption as in other targeted schemes. For instance, various studies have shown that many people who are not below poverty line have BPL cards.

One should also keep in mind that there exist significant disparities across Indian states and districts in terms of income levels and affordability of basic needs such as education, healthcare etc. Therefore, the same amount that means a lot to a person living in a low-income state or a state that has good access to public facilities such as public hospitals, schools etc would not be enough for a person trying to make a living in a high-income region. As a result, a prerequisite for such a scheme is a detailed regional level survey on income characteristics of Indian states and districts.

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To put things in perspective, the expenditure of the proposed scheme is 2.2 times the budget of all centrally sponsored schemes. The party claims that they have worked out all the fiscal calculations before launching the scheme. Pixabay

Another major concern surrounding the scheme is its inflationary implications. It is argued that the act of transferring cash to the target population will boost their purchasing power, which would lead to an increase in demand for goods and services and, thus, push prices upwards. Advocates of the approach have tried to argue that studies around the world present a lot of evidence to the contrary.

An impact evaluation study by UNICEF in Sub-Saharan Africa showed that with the exception of temporary price rise during payment period, cash transfers has no impact on the prices. However, these evidences should be considered with a pinch of salt. They rest on the assumption that the money will be spent on useful goods, that will help the local economy in becoming more productive. Though this will not be the case always.

Also Read: Food Unites People Across The Globe

The concerns about funds being used for harmful purposes cannot be ruled out. It is due to these challenges many policymakers suggest that instead of making welfare payments to poor households in the form of unrestricted cash transfers the government should focus on in-kind transfers. This idea is supported by claim that in-kind transfers will help by encouraging the consumption of right things, such as healthy food.

Given India’s concerns about rising unemployment rates, jobless growth and the fact that we need to have effective utilization of our young population to gain a competitive edge over other economies, the promoters are trying to project that NYAY can prove to be a game changer. However, for the Indian economy, a better alternative would be to strengthen the existing public services landscape by removing social, political and personal barriers, along with carrying out structural reforms that leads to creation of more productive jobs. (IANS)