Land Bill: We have followed middle path, says Jairam Ramesh

Industry will pay more for land and farmers will get a better deal. The new land law, recently passed by Parliament, is one that walks the middle path, says its author and Rural Development Minister Jairam Ramesh. It is a middle path between the Centre and states, between the farmers and the industry, between market forces and regulation, between urbanisation and agriculture. “Land for industry will get more expensive,” he says. “But compared to what?” Excerpts from an interview with Firstpost:

The new land law looks like a compromise.

Everywhere and every time there was a middle path. Between what the Centre can do and what the states should do. A middle path between what farmers should get and respecting industry sentiment. It was a middle path between allowing market forces to work and allowing some intelligent regulation. It was a middle path between acquiring land for urbanisation, which is inevitable, and making sure that multi-crop agriculture doesn’t get affected.

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Did that make it a more difficult law to pass?

No. In fact, it is because of this middle path approach that I was able to navigate it in Parliament. Every party saw something for itself in it. If I had taken a fundamentalist approach on any of the issues, I would never have been able to see it through. For instance, I was asked that since the 1894 act has been amended three times, why not amend it a fourth time?

[caption id=“attachment_1124683” align=“alignleft” width=“380”]  The new land law, recently passed by Parliament, is one that walks the middle path, says Rural Development Minister Jairam Ramesh. Reuters[/caption]

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Yes, so why not?

Because the basic structure of the 1894 Act is faulty.

How?

There is a lot of power that is vested with the (district) collector.

You mean the urgency clause.

Yes, the collector defines the urgency clause, the collector defines the public purpose, the collector determines the compensation, the collector defines the R&R (rehabilitation and resettlement) architecture. These are all part of a mindset of the 1894 Act. That is why we took a decision that rather than go for piecemeal amendments, to rewrite the act that reflects the new philosophy.

What is the new philosophy?

The philosophy is this: land acquisition is not the primary purpose, the primary purpose is to ensure a fair compensation and to ensure a humane R&R. And, in the process, land acquisition will take place.

That’s why the change in name to the mouthful Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013?

By calling it Land Acquisition Act, 2013, we would not have got the philosophy of the Act. The philosophy of the act is fair compensation, transparency in acquisition and payment, and an adequate R&R.

So, who determines urgency now?

The law determines what the urgency clause is. It can be invoked only in two cases - national security and national calamity. Further, an additional compensation of 75 per cent is provided.

And public purpose?

Again, the law. We’ve defined what public purpose is in the Act. Likewise, R&R is not determined by the collector, the Act determines the R&R. In fact, a point that has gone unnoticed is that this is the first time in 66 years since Independence we have a law in which R&R figures. So far we’ve had only a national policy on R&R. This is the first time we’ve got a legal framework for R&R. So, you can’t monkey around with it.

What made you reduce the minimum percentage of land to be acquired to 70 per cent from 80 per cent?

For the PPP (public private partnership) projects only. This is the consent clause. See, this law rests on four pillars - a consent component, a compensation component, an R&R component, and a procedure component. For private companies, acquisition will be only with the written consent of landowners. For PPP projects, acquisition will be with 70 per cent.

How do you deal with your political partners or ex-partners? Like Mamata Banerjee says she doesn’t want any forcible acquisition, period.

Any state is free to pass any legislation that adds on to this legislation. It cannot derogate from this legislation. You cannot make it 60 percent. You can make it 100 per cent. This law comes from the concurrent list, entry no 42. Suppose a state government says it wants to make compensation not four times but six times. By all means go ahead.

So, this law is a base.

Yes, this law establishes a base for consent, for compensation, for R&R and for procedure. This is a law for land acquisition. We often confuse acquisition for purchase. We are not interfering with private purchase of land. In fact, my perspective is, 20 years from now, we shouldn’t have a land acquisition law.

Have you incorporated the poison pill?

I wanted to but I was dissuaded.

That was a good clause.

Yes. I hope when we return as UPA-3, we can reintroduce the poison pill. In 20 years, with improved land records, with improved education, with improved communications, with improved empowerment of landowners, people should be in a position to demand better terms.

When we look at this law from the point of view of industry, one grouse is that land is going to get very expensive. They will have to move to Thailand and other places.

This is not true. What proportion of the total cost is land acquisition? A very small proportion. Of course, you’re going to pay more. But let’s be very clear. What industry has been paying, and by industry I don’t mean just private industry, I include public sector, the government, (is poor). The low prices we have been paying has been one of the main factors responsible for the anger of farmers and landless labourers. The rates we have been paying have been extraordinarily low whenever land has been acquired. And R&R has simply not been carried out. Today, I have a letter from the Irrigation Minister of Karnataka, who says that R&R promised 40 years ago has yet to be completed. I have seen some irrigation projects, where multiple displacements have taken place. So, yes, industry will have to pay more, but compared to what? Compared to the song at which you’re getting land today, particularly when you’re acquiring the land?

Then, there is the economic cost and there is a social cost. Look at what’s happening at Posco. Look what happened at Niyamgiri. Let us take Gujarat, the so-called favourite state of pink papers and all the industry associations. What is happening to the Maruti land acquisition? Look at the agitation surrounding that. As the environment minister I had to deal with a situation of a cement factory set up in Gujarat because there was a huge agitation from landowners. In state after state, because people are becoming more aware, they are reacting to a very draconian piece of legislation.

This is also leading to discontent.

Eminent domain does not mean zabardasti, forceful eviction. I want to acquire land come what may and I want to acquire it on terms that are not in your favour. That won’t happen. Industry will have to pay more than what it is paying today. The process of land acquisition is not going to be quick. If you want land tomorrow, you’re not going to get it. There will have to be some impact study, analysis, who is getting displaced, how many, how many will have R&R, who are the landless? Remember Singur? Most of the people displaced were not landowners but tenants. We’ve included tenants, informal workers in this legislation.

What about private purchases?

We have not done anything as far as private purchase is concerned. All we have said is that in private purchases, R&R is going to be important. At what level R&R should kick off in a private purchase is left to the state government. One state government may say any private purchase more than 100 acres would be accompanied by R&R, another state government may say 1,000 acres. Second, we have introduced the easy option, what we call the Sushma Swaraj amendment. We have allowed the land to be leased. You are the investor. I am the landowner. I give you a 50-year lease. And the terms of that lease are not set by me. They are set by the state government.

What is the rationale for fixing the price on the sale of agricultural land at four times the market value?

In the original draft of the law, the rural multiplier was six and the urban multiplier was three. And then we brought it down to four and two. This was based on our talks with a cross-section of collectors in various states.

How many…

We spoke to collectors in Haryana, Bengal, Andhra. We spoke to someone in UP, in Madhya Pradesh, Maharashtra. We consulted about 25 collectors across the country. This was because market values do not reflect the true value. The circle rate, for instance, does not reflect the true value of the property. Even in the officially notified circle rates, there is an element of under-reporting.

What is the extent of this under-reporting?

It could be anything around 20-25 per cent.

That’s it? Just 20-25 per cent?

Yes, on an average across India.

So, how does the multiple four times come up?

It works because we have doubled the solatium. So, you get a factor of two from there. And the actual market value being used also gets doubled. So, the total impact becomes four times.

How do you reconcile a market price that may not be the reported price and the final value of the land being acquired?

We provided an alternative, a formula. We said, whatever the circle rate or the highest of the sale in the last three years in the land records, whichever is higher, would get multiplied by a factor of four in rural areas and a factor of two in urban areas.

Is this really an accurate measure?

You can debate this and the number has been criticised. Some people have come and told me it should be a factor of six. Some members of Parliament have even told me it should have been eight times, one of them, an influential MP, even said make it 10 times. We didn’t want to make it excessively high.

Look at NCR. Look at Gurgaon and Noida. Some of the multiples have been 40 times. So, if you’re talking about giving farmers a good or fair deal, the multiple of four is small. Is there a methodology?

The multiple four has to be read in conjunction with other provisions in the law. For instance, if you have acquired the land and the land appreciates in value, the landowner gets a share of the appreciation.

…provided there is a further sale.

Only if there is a further sale. Which is a reality. Which is not the exception but the norm. Most of the time land is being acquired and there is a further sale, which is one of the main criticisms of the 1894 Act. It is not unknown to see in state after state people acquiring land and then selling it off. And this has caused a lot of heartburn. In the process of selling off, the value of the land has appreciated. This law provides a share - 40 per cent - of that appreciation to go to the original landowner.

What about the land that governments already have? Why is that not being given to industry?

You’re right. In the past 50 years, governments have acquired so much land - much more than what they need - that if they really want to give land to the industry, they can. The fact is, we have 50 million hectares of barren, uncultivated land, which can easily be used for industrial purposes, on which there won’t be any acquisition issues. But if industry only wants multi-crop irrigated land, if it only wants land…

…what industry wants is land with infrastructure. The land you’re talking about probably won’t have that infrastructure.

It is the job of the government. The government cannot abdicate its responsibilities of providing infrastructure. But it is in a political context in which we have looked at this law. There isn’t a state that has not seen land agitation. There are farmers, there is industry. To the best of my ability, I’ve tried to carry everyone along. And because it is the middle path, no one person is fully satisfied. Farmers are satisfied, kintu. Industry is satisfied, parantu. There is a lot of kintu-parantu here.

The major scam that happens is change of land use…

…we’ve put an end to that. By law, if a land is acquired for public purpose A, it cannot be diverted to private purpose. And even if it were to be diverted for public purpose B, it would have to go through a procedure that has been laid down in the Act.

Take the recent move, two days ago, where the Delhi government proposes to divert 20 percent of industrial land in some areas for real estate, for instance. How does the new law come into play here?

Let’s see. We have a retrospective clause. It works under three conditions. One, where no award has been made under the 1894 Act. Two, when the award has been announced but physical possession of land has not taken place. Three, when majority of landowners have not received compensation.

Or look at Haryana. Overnight some plots are converted for real estate from agriculture. This change of land use information is not available with the farmer. Following the sale, there is a change of land use and the land value increases 40 times. Will this Act take care of such anomalies?

Well, hopefully it should. Once the Act is notified, in three months, then five years prior to that - any cases five years and older - will automatically come under the retrospective clause. But let me tell you another thing we’ve done. Governments would acquire land and keep it vacant. Huge, huge tracts.

What for?

Exactly. Good question. What for? So, what we’ve now said is that if land is unutilised for five years, it either goes back to the original landowner or it goes to a land bank. We want to discourage squatting on land. And government is the bigger squatter.