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Land Acquisition, R & R Bill - last nail on industrialisation coffin?

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The Land Acquisition, Rehabilitation, and Resettlement Bill introduced in Parliament is a terrible piece of work. It is a Luddite proposal that threatens all economic development.

Some critics have focused on its high compensation norms. But its worst provisions are for Social Impact Assessment (SIA) reports and mandatory rehabilitation and resettlement (R&R). Every piece of land acquired, no matter how small, will require an SIA, to be later reviewed by an expert committee, followed by a government survey, followed by actual acquisition proceedings. Any decisions can then be challenged in the courts. These procedures could take years, delaying all industrialization and urbanization.

- - - The Bill assumes, implicitly, that all development is harmful because it displaces people and destroys traditional jobs. The Bill does not view change as good, or development as a path to improved opportunities and incomes. This is classic Luddite thinking.

- - - When the Industrial Revolution began in England in the 19th century, a group called Luddites started wrecking textile machinery because it displaced traditional hand-spinners and weavers. Luddites saw industrialization as a recipe for pauperization of artisans of all sorts. They couldn't see how industrialisation would transform living standards.

Economic historian William Baumol has shown how, through history across the world, living standards for most people were just a bit above starvation level, save for pampered ruling elites. The concept of natural progress did not exist - the Golden Era was in the past (Ram Rajya in India, or the Roman Empire in Europe). European living standards declined after the Roman Empire's peak in the 3rd century. England caught up with the Roman living standard only in 1850. France and Germany followed in 1870. But after that, the industrial revolution sent living standards skyrocketing tenfold.

This could not have been predicted by any SIA by the Luddites in the 19th century. An SIA by its very nature focuses on immediate problems. It will say very little about positive dynamic consequences in the future because the latter are inherently unknowable, and often turn out to be trends never known before in history.

For the full text of the essay, by Sri S A Aiyer in the SToI, click here.

The following comment by a reader, says it all:

You are worried about the Land Acquisition bill? Really? Are there any investors left who are still willing to invest in India? And that too invest in projects that need land? In India? Last i heard, Indians themselves invested $ 52 billion in Dubai alone. No one is interested in India any longer. Not even Indians. So land acquisition should be least of your worries.

Such legislation, coupled with misplaced green activism (check this), is plainly ending up striking the proverbial last nail on the industrialisation & urbanisation coffin. Old world romantists and green activists may express happiness over it. But, what they are doing by that essentially is depriving the millions of poor in the country the standard of living that they are currently enjoying.

Muralidhar Rao


Vasanthkumar Mysoremath's picture

Land Acqisition.Bill - social justice at last

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Case studies:

Rajajinagar Industrial Area in west of Bangalore and Jigni Industrial Area:

Most  sites allotted to industries in Rajajinagar have been converted into either multi-storied complexes or posh Kalyan Mantaps have come up. What is the amount given to the land owners? Pittance. Now the same lands are being traded in terms of crores.  Similar is the case with Jigni industrial area.  

Invariably, the applicants for setting up of industrial units bloat up their land requirements, set up a small shed and put up some worn out second hand machinery, wait for opportune time to dispose off the land at fabulous prices in connivence with the concerned officials.  

Add to this paradox - most IT MNCs or units in SEZ have occupied so much of land acquired from poor farmers and converted into manicured lawns with China grass etc.Was this excess land necessary and for waht sake?

No wonder the LA, R & R bill is trying to do justice.  

Vasanthkumar Mysoremath


murali772's picture

avoid generalising, please!

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Mysoremath sahibare' - Likewise, BDA acquired lands from peasants for a pittance, and alloted them largely to government officials for a nominal price. Later, these government officials, either sold them, or built multi-storied complexes on them, and made huge profits. So, if you want to make generalised talk about industry, I can do the same about others too.

If entrepreneurs chose to close down their industry and moved to other pursuits (which includes me, incidentally), look for reasons amongst the following blogs:

Muralidhar Rao
murali772's picture

noble intentions, but - -

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We have put in place vast number of policies with noble intentions, that produce exactly the opposite results. The latest example of this is the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The primary objective of the Act is to protect farmers from predation by the government and businesses in the course of land acquisition. But it pushes the protections against acquisitions so far that anyone wishing to acquire land will first look for land on Mars.

Children of farmers today aspire to jobs in cities or business of their own. In the forthcoming years, many of these farmers will be looking for buyers of their land at decent prices. But with the onerous demands placed on the buyer by the new Act, they will find few takers. Alongside, infrastructure building and industrialisation will suffer enormously, limiting the opportunities for their children. They, their children and the country will be stuck in a low-income equilibrium.

For the full text of the column titled "Noble Intentions; ignoble outcomes" by Arvind Panagaria in the ToI, click here.

Very correctly as the auther has pointed out, the neta's have all along pontificating about the noble intentions. But, all of it just seems to be taking us further down the precipice.

Muralidhar Rao
PushpaS's picture

Not Noble/Green/Social Activism. Just COUNTERING CORRUPTION!

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Yes, as one sage member pointed out, the reason for the new Regulations/Laws is to counter the all-pervading Corruption that has governed land acquisitions for whatever purpose, for the last so many years!

If the poor aspiring farmers' children could really benefit from MORE and MORE unchecked/unregulated land acqusition for industrialization/ urbanization, why has that not happened so looon...g, when there was no regulation at all? Instead, they have become poorer and more wretched, while the buyers/cquirers of land have run laughing all the way to the bank after commercial exploitation or selling of said land acquired ostensibly for 'noble' purposes of putting up industries and giving jobs to the needy?!

Wonderful theories are fine...but, they don't translate on the ground... This has been expeience.

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