Prime Minister Narendra Modi is a worried man. He normally does not join issue on raging controversies of the day like the ‘Nirbhaya’ film or the litany of politically embarrassing comments emanating from his ministerial colleagues. But on the land ordinance, he has chosen to come out with all guns blazing. On 23 March, he focused his ‘Mann Ki Baat’ radio address on selling the new land ordinance as a ‘pro-farmer’ piece of legislation. Lambasting the Congress and the rest of the political opposition for spreading myths that the ordinance is ‘pro-rich’, the Prime Minister said land would only be acquired after an agreement with the farmers. He also said the government had not made any changes to the compensation provisions.
More recently, at his Bangalore rally, timed alongside the BJP’s national executive meeting on 3 April, Modi again brought up the land ordinance. He said he was from a poor farmer’s background and could understand the pain of agriculturists; he also denounced the opposition’s campaign as a pretence of fighting for farmers for political gains.
The Prime Minister’s concern is that the land ordinance may become a tipping point against his government. A TV network poll found 48 per cent of respondents still supporting Modi as ‘pro-poor’, but as many as 35 per cent saying his policies are ‘pro-rich’. A India Today-Cicero survey said if elections were held today, the BJP would lose as many as 27 Lok Sabha seats. On the other hand, the core of his support base — the phalanx of corporate giants and investors who bank-rolled the BJP’s election campaign — have become increasingly impatient at the poor pace of ‘land reforms’. ‘Ease of land acquisition’ is a fundamental precondition to development and new projects taking off, they say; and their language is increasingly peppered with words such as ‘non-performance’ to describe the first 10 months of the Modi government. Caught between a rock and a hard place, where should the Prime Minister go?
The Zig Zag Of Land Acquisition The Congress-led government thought it was playing an ace when Jairam Ramesh piloted the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The new Act replaced the draconian 1894 Land Acquisition Act. The farmers hated the latter as it opened the doors to forced takeover of land in ‘public interest’; and gave them meagre compensation, much below market rates. The new legislation that came into force in January 2014 seemingly empowered the rural masses by decreeing that private projects seeking land acquisition would require 80 per cent concurrence, while ventures in the public-private domain would have to get 70 per cent consent of the landowners. Compensation was hiked drastically and linked to market price. For urban land, buyers would have to pay two times the market value, while for farm land they would have to cough up four times. Besides, projects seeking land would also have to run the gauntlet of a mandatory social and environmental impact survey.
It was a pyrrhic victory for the Congress. It gave the rural folks a greater say, but it was not enough to turn the election tide against the party. On the other hand, industry denounced the land amendment as one more anti-development populist measure and solidified the ‘oust-Manmohan Singh’ forces. Industry bodies such as the Federation of Indian Chambers of Commerce and Industry and Confederation of Indian Industry claimed that if land acquisition norms were not eased, $300 billion worth of projects was in danger of evaporating. Modi’s victory became synonymous with growth and development, and India Inc. backed the BJP with both money and votes.
Modi’s election juggernaut marched to victory, and soon it was payback time for those who had been clamouring for an easier business environment. The BJP-led government on its part wanted to show its firm intent, but it did not have the numbers to push through important but controversial legislations such as the insurance Bill and coal legislation through the Congress-dominated Rajya Sabha. It thus took the ordinance route, and as soon as the winter session ended on 23 December last year, almost a dozen ordinances were promulgated, including the one on land acquisition.
The core of the land ordinance was the doing away of the mandatory 70 per cent and 80 per cent approval required from landowners for public-private ventures that had to do with defence, rural electrification, affordable housing and industrial corridors. To speed up land acquisition, the ordinance also jettisoned the mandatory social impact and environment study based on public hearings.
The ordinance was more of a public statement that the Modi government meant business than actual reform. No investor was willing to put his money in land on the basis of a temporary ‘ordinance’.
President Pranab Mukherjee too expressed his dissent by delaying signing the decree. “What was the ‘urgency’ for a land ordinance when the government could pass a regular legislation in the Budget session of Parliament,” he is believed to have asked the government.
In hindsight now, we have an answer. The government knew it did not have the numbers. While it used its overwhelming majority in the Lok Sabha to pass the Bill in the lower house, the BJP had only 18 per cent of the seats in the 245-member Rajya Sabha.
A virulent agitation on the streets only helped to close opposition ranks, and the government saw there was no way the land acquisition Bill would go through the upper house. An ordinance is normally valid for six months, but if Parliament is in session, it has to run the test of regular legislation within six weeks or it can lapse. The outer date therefore was 05 April.
A defeat so early in its five-year term on such a vital issue was not really an option for the Modi government. It therefore took the next best route. It prorogued the Rajya Sabha, and promulgated the ordinance a second time around, hoping against hope that it would push the legislation through by the time Parliament reconvened for its monsoon session.
Crunch TimeTo make its task easier, the government has included as many as nine amendments to the original December ordinance. These include: giving employment to at least one member of the ‘displaced’ family; ensuring that only the bare minimum land required for a project is acquired; restricting acquisition of land within one kilometre of railway tracks and highways; and calling for a mandatory survey of waste land in order to create a bank of alternative land. These sweeteners helped the government get some of its allies on board. It passed the ‘softer’ Bill in the Lok Sabha on 10 March; but not before ally Shiv Sena registered its protest with an abstention and a walkout.
However, the heart of the new land amendment Bill remains the same: consent of landowners for land acquisition for significant private projects in core sectors will not be required; and the social and environment impact study, earlier mandatory, has been waived. With these in place, there is little likelihood of a consensus in Parliament.
The land issue has already moved beyond the realm of opposition from political parties to the level of a social resistance movement. Rejecting the amendments of the government, a rainbow coalition of farmers’ organisations has formed the Bhoomi Adhikar Sangharsh Andolan. The body has announced a series of state-level protests and social disobedience actions culminating in a mass farmers rally in the capital on 5 May. It has also called for a ‘Zameen Wapsi’ or ‘Return Our Land’ movement. ‘Non-political’ leaders like Anna Hazare and Medha Patkar have lent their support to the protest rallies, and the ‘Bharat-versus-India’ idiom popularised by erstwhile farm leader Sharad Joshi has begun to gain ground once again.
The rising farmers’ resistance to the land ordinance has to be seen in the context of the deteriorating rural economy. The increasing drought conditions have led to crop failures and increased agrarian poverty. Unseasonal rains have only added to the misery of damaged crops and rising unemployment. The sharp reduction in purchasing power in rural India is best reflected in the perceptible fall in sales of tractors and entry-level cars — the Tractor Manufacturers’ Association says in the 10-month period since April 2014 to February this year, tractor sales declined 10 per cent to around 4.88 lakh units, while entry-level cars fell 8 per cent to 4.93 lakh units.
Perception is what finally counts, and that is turning sour for the Modi government on the land issue. After the math and the explanations are over, the perception that is quickly gaining ground is that the new government is tilting to accommodate the urban rich.
Unfortunately, we have short memories and forget the lessons of history. The Left Front government in West Bengal used the colonial 1894 Land Acquisition Act to seize 997 acres of farmland in Singur, in Bengal’s Hooghly district, for Tata Motors’ Nano car project. Mamata Banerjee and the Trinamool Congress, then in the opposition, led an unrelenting protest movement that finally saw the withdrawal of Tata Motors from Bengal in 2008. Despite all that the CPM-led Left Front had done as the world’s longest serving government, when polls came in May 2011, it got the drubbing of its life at the hands of Mamata Banerjee. The Left acquired the reputation of being anti-farmer and corrupt; and if there was one single factor that contributed to the image, it was its crude and overbearing handling of land acquisition in Singur.
To better understand the raging debate around the land acquisition legislation, BW | Businessworld asked two leading voices on two ends of the spectrum to pen their views. While Anshuman Magazine, chairman and managing director, CBRE South Asia, appreciates the Modi government’s latest ordinance, saying it will go a long way towards addressing industry woes on the land front, Colin Gonsalves, a lawyer and founder of the Human Rights Law Network, comes down heavily on the government’s attempt to take away the few progressive measures put in place by the 2013 legislation. He dubs the current Bill as being worse than the 1894 legislation enacted by the British Raj.
Whichever side of the debate you’re on, one thing is for sure: Modi’s disregard for the lessons of Singur has already dented his massive mandate and could prove suicidal if some serious back-pedalling is not done.
(This story was published in BW | Businessworld Issue Dated 04-05-2015)
