The CURSE of Development

Formulation of development strategies in India has always been a point of contention for policymakers but it is undisputed that for any kind of socio-economic development in India, the policies need to address agricultural development and land rights. Historically, land and property rights have been contentious. Most of the private land is under cultivation and for any ordinary Indian farmer, his land has been his pride. An average Indian is a marginal or small farmer with less than 2 hectares of land, which is not enough to produce a farm surplus for-profit and lacks access to finance to undertake capital investments. For a farmer, with stagnant production, there comes stagnant income and rising debt. This agricultural stagnation has been a result of several policies of the British Raj and has unfortunately continued even in Independent India.

Land acquisition is, in very simple words, the government’s power to expropriate private land for public use, such as the development of infrastructure, industrialization, or for urbanization purposes for compensation to the land loser. The foundational principle is that the sovereign can do anything in the public interest. In theory, it is a win-win situation.

India and Land Acquisition

Pre-British (Mughal) India had the unique Mansabdari system under the reign of Akbar, in which the jagirs were under the control of the Mansabdars (a military unit) but revenue collection was done by the administrative authorities. As Mughal rule declined, it broke down into a semi-feudalistic society. However, in Mughal lands or post-Mughal empires, the ownership rights remained with the king or nawab, for example, the Bengal Subah, had a properly managed agrarian and proto-industrial economy which made it the wealthiest region of the world.

After the Battle of Plassey in 1757, and the total suzerainty of the British East India Company by the 1850s, the need, and nature of land-use had changed. Firstly, due to British policies, agriculture stagnated, and indigenous industries were systematically destroyed which put pressure on the agricultural sector. Secondly, the intent of the bureaucracy was different from the Mughal rule. While the Mughals wished to increase agricultural production for higher trade and lower food prices, the British intent was plagued with a demand for higher revenue. The demand for revenue intensified after the transfer of power to the Crown. Lastly, the British wanted to subdue a resource-rich subcontinent as a source of industrial raw materials that required infrastructure like railroads, ports, and exploitation of raw materials, for which land had to be acquired. 

The British Raj passed a series of ‘Forest Acts’ which made swathes of forests government property just by executive order and declared almost all traditional activities illegal. This erased customary forest rights and gave Indians the first taste of a colonial eminent domain law. 

In 1894, the Imperial Legislative Council passed a draconian Land Acquisition Act. The law gave the government power to acquire land for ‘public purposes’ without a ‘consent clause’ or resettlement and rehabilitation or compensation for loss of housing and livelihoods (although identical local laws were in operation since 1824). This gave a boost to commercial interests at the expense of the people, who were often displaced and lost their livelihoods. 

In 1947, the paramountcy of the British Crown came to an end in 1947, but the Land Acquisition Act of 1894 continued to be in operation. It is important to note that there were several other laws under which acquisition was possible like the Tramways Act and the National Highways Act. 

The Constitution and the Right to Property

The Constitution provided for a fundamental right to property in Article 31 which stated, “...no person would be deprived of his property save by authority of law, and it would not be acquired save for a public purpose, and most crucially, it provided for the payment of adequate compensation.” This article was amended six times to validate several state laws.

The First Constitutional Amendment created a Ninth Schedule, in which laws were placed to be exempted from judicial scrutiny, and an Article 31A was added to validate certain laws to enforce the Zamindari abolition program. The Fourth Constitutional Amendment did not allow challenges to the acquisition process based on the ‘inadequacy of compensation’. The Twenty-fifth Constitutional Amendment saved the laws by disallowing judicial scrutiny if a law was passed to give effect to the Directive Principles (however this part was struck down in the Keshavanada Bharati case).

In 1978, the Right to Property was made a legal right in Article 300A and the state got unchallenged power for acquiring land under the Act. 

Although the intent of the state was a benign attempt of land redistribution and reforms by using Land Ceiling Acts, it adversely affected the land acquisition from farmers, sharecroppers, and tribal for infrastructure projects. There was uproar among the displaced people when they were deprived of their land without fair compensation and their consent by citing an ‘urgency clause’ to expedite the process. Due to the rising litigation, land acquisition projects often became unprofitable for companies in partnership with the government, but people in most cases received higher compensation in courts. Delayed projects, cost overruns, and unfair compensation turned the process into a conundrum. 

Land Acquisition and Politics

In the 2000s, the protests of land acquisition generally influenced rural voters across states (the best example being the protests against the Tata Motors Plant in West Bengal in 2008-09 which was led by Mamata Banerjee, who defeated a 34-year old Communist government in the State Legislative Assembly elections in 2011). Farmers’ Organisations have actively mobilized people for protests while Tribal Organizations called it discrimination, and the government’s public image took a hit as ‘anti-poor’ and ‘anti-farmer’. 

This political mess prompted the then UPA Government to pass a new eminent domain law. In 2013, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation, and Resettlement Act which mandated for a ‘consent clause’ and a ‘Social Impact Assessment’ to take into account the displacement and loss of livelihoods of people working as employees of the landowners, and provided for higher compensation. Even with its drawbacks, this law was considered better than its predecessor and there was vast public support.

In 2014, the new NDA government diluted certain provisions like the ‘consent clause’ and Social Impact Assessment for sectors like defense, rural development, and industrial corridors. The Ordinance lapsed in April 2015, but any amendment could not be brought forward due to public uproar and unification of the opposition parties. Although there is consistent demand from international credit rating agencies, financial organizations, and corporations, the central government has stuck to the 2013 Act after considering the domestic political costs. However, many states have passed their own laws for diluting the provisions of the Act to speed up acquisition and maintain their reputation as ‘investor-friendly’ states. 

The Displacement

Development projects, particularly dams, mining operations, and national parks and reserves before 2013, have created a problem of development-induced displacement of people (although the estimates vary between 0.5 million and 21.9 million). Most people have been rendered landless with paltry compensation. Interestingly, 55% of these Internally Displaced Persons (IDPs) belong to the Scheduled Tribe community (they form about 8.2% of India’s population).

Dam construction has always generated controversy. Around 16 million people have been displaced under more than 3,000 dam projects. Most of these dams exist in Scheduled Areas, and without a clear policy of resettlement and rehabilitation, there has been a loss of livelihoods, community assets, and social disruption for the indigenous tribal population. Also, the influx of non-tribal people in what was previously, tribal areas, was a cause of social tension and disharmony.

Mining-induced displacement in resource-rich regions of the country has displaced 1.5 million people since the 1950s, especially in the Chota Nagpur Plateau region in Jharkhand. The land acquired for mining is handed over to private corporations, which unlike the state, focusses on profit and is very unlikely to undertake long-term improvement for the indigenous populations. The corporations have several times made agreements with the local population for preferential employment. Most of these regions lie in forests, and due to the mining operations, the regular life of the indigenous community takes a hit.

Urban land loss usually stems from infrastructure or redevelopment projects where many do not qualify for the benefits under the new law. Since there was no direct policy of resettlement the redevelopment and urban rejuvenation projects have, to some extent, increased the informal settlements in and around the city.

In most cases, the tribal communities have been the victims. Lack of adequate diligence and inadequate protective measures has made India’s most vulnerable communities landless, devoid of a community, and in a state of dilemma. The constitutional provisions such as the Fifth Schedule are progressive in spirit but are weak in practical application. The tribal land rights have been constitutionally protected, but these constitutional rights operate in the broader framework of Union and State laws, which have been contrary in spirit to the provisions in the name of ‘investor-friendly’ and ‘economic growth’. 

However, to say that the problem is uniform throughout India would be an oversimplification of an intensely complex issue of social displacement. Nature and extent vary among states and even within states. All local dimensions cannot be added in one article, but the general idea of the displacement can be understood.

It is understood that development comes with a cost that we must bear as a society but unfortunately the existing framework makes the most vulnerable people of the country bear the cost of development disproportionately. The laws framed before 1947 carried a colonial ethos and had a discriminatory mindset for commercial exploitation which has widened the gap between India’s vulnerable landowners and the administrative authorities. This gap needs to be bridged with suitable legislation and total rejection of British-era laws meant to deprive Indians of their rights. The authorities need to focus on integrating local development along with economic development to gain the most out of these investments. The social costs need to be understood and the vulnerable communities need to be brought into the mainstream through affirmative action. Constitutional rights must be protected and instead of a mere lip-service to the text of the Constitution, the progressive provisions like the Fifth and Sixth Schedule must be implemented both in letter and spirit. The governments must engage with the local population and bridge the gap of communication.

To create an ‘investor-friendly’ environment is not to circumvent the rights of the people but rather to create transparent mechanisms to assess and bear the costs of development. In the end, the nation-state exists for its people and it would be a mistake to not make them the priority for the reason that actions to the contrary, tear through the socio-political fabric of the nation and endanger the very stability of the nation.

- By Anubhav Mishra

References:

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2. Najar, N. (2015, March 22). Indian Opposition Delays Modi’s Land-Acquisition Effort. The New York Times. https://www.nytimes.com

3. Ananth, V. (2015, May 22). The evolution of the Land Acquisition Act. Livemint. https://www.livemint.com/

4. Ranjan, S. (2011, June 14). Land acquisition and right to property. The Hindu Business Line. https://www.thehindubusinessline.com/

5. Ghatak, M. & Ghosh, P. (2015, June 1). Yes, a Land Acquisition Act Can Address Both Justice and Prosperity. The Wire. https://thewire.in/

6. Varshney, A. (2019, August 29). Despite new land acquisition Act, farmers remain vulnerable to poor compensation as many states dilute law for several sectors. FirstPost. https://www.firstpost.com/

7. Mohanty, A. (2017, April 12). Armed With a Toothless Law, the Plight of the Adivasi Worsens. The Wire. https://thewire.in/

8. Ramesh, J. & Khan, Md. (2018, March 5). Righting wrongs in land acquisition. The Hindu. https://www.thehindu.com/

9. PTI (2013, August 29). Lok Sabha passes land acquisition bill. Economic Times. https://www.economictimes.indiatimes.com/

10. Sathe, D. (2015, June 27). Land Acquisition Act and the Ordinance. Economic & Political Weekly, Vol. 50(26-27). https://www.epw.in/

11. Shylendra, H. S. (2020, April 4). Need for a More Progressive Discourse Economic & Political Weekly, Vol. 53(5). https://www.epw.in/

12. Gokhale, N. (2019, October 11). To avoid giving fair compensation, a few Indian states are using outdated state laws to acquire land. Scroll.In. https://scroll.in/