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

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