States Formulating Own Land Policies is Political Win for Modi

Do not impose central law on land acquisition. Instead, states could put in place transparent land lease regulations

It is unlikely that the Land Acquisition Bill will be cleared in the monsoon session of Parliament. Even the Joint Committee of Parliament on Land Acquisition (Amendment) Bill, 2015, is likely to miss its July 21 deadline to submit its report to Parliament. But given the opposition that the government faced from the 52 depositions before it, there is a dim chance that a final report will be presented anytime soon.

Even the four RSS affiliate bodies – Swadeshi Jagran Manch, Bhartiya Kisan Sangh, Bhartiya Mazdoor Sangh and Akhil Bharitya and Vanvasi Kalyan Ashram –   demanding repealing of the controversial amendments in the bill.

The Chief Ministers’ meeting on July 15 turned out to be an opportunity for opposition parties to show their strength. Rather than using it as an opportunity to debate and discuss their point, political parties preferred sulking under the guise of petty politics. The end result was the country lost out on a chance to come out with a stronger and broadly acceptable Land Bill.

A Way Forward At Last?

• Political parties failed to build consensus for a stronger and broadly acceptable Land Bill
• Finance Minister Arun Jaitley said that some states are keen to bring their own legislations to make it easier to acquire land
• State governments are demanding that they should be allowed to decide on the land acquisition policy
• Political victory for Prime Minister Narendra Modi as land reforms will start at the state level

Positive Takeaway

However, something good did emerge from the meeting of the Niti Aayog’s governing council. Finance Minister Arun Jaitley said that some states are keen to bring their own legislations to make it easier to acquire land as they cannot indefinitely wait for a consensus on the central legislation. Jaitley said that an overwhelming section of the states were of this view.

Nothing can be better than allowing states to form their own policy on land acquisition, rather than imposing a central rule that other states would be forced to comply with. The Centre had anyways exempted itself from the 13 clauses relating to land acquisition, including the consent clause, social impact assessment (SIA) and those related to the Right to Food. These three clauses were binding on states as per the amendment.

Let States Decide

The state governments are right in demanding that they should be the ones who should decide the rules for their respective states. A centralised decision making process during the UPA II regime affected growth in many non-allied states. In order that governments in the future do not adopt such attitudes, each state should be allowed to decide on policies that are for the larger good of its people.

Progressive states will find a way out of the logjam rather than bicker over small political gains. Ultimately, it will be the people of the states who will compare the policies that decide what is good for their prosperity.

By allowing chief ministers of each state to decide on the land acquisition policy, the central government will be opening up the field for competition. Every state would compete with each other to attract investment to boost employment, income generation and overall growth. Money will naturally go to states where return on their investment will be highest.

Many states have said that one of the biggest hurdles for growth was land acquisition, especially for creating infrastructure. NITI Aayog Vice-Chairman Arvind Panagariya has a viable solution to the problem. In a blog posted on the Aayog website, Panagariya urged states to liberalise their land use policy and introduce transparent land leasing laws. Long term land leases would allow the owner to retain ownership at the same time collect rent. This way the entire issue of land acquisition is by-passed.

Political Victory

There is a political victory for Prime Minister Narendra Modi in allowing states to implement their own land reforms. Even though land ordinance bill may lapse and opposition parties may have their day in front of cameras, land reforms will start at the state level. The purpose of the bill will be fulfilled even though the bill may not be cleared.

Chief ministers of Congress-ruled states who had complained about the need to bring in land reforms individually, will now be forced to carry out reforms if they want to stay in power, going against the party diktat. The mood in the nation is of growth and employment and few political parties would like to tread any other path. It is time the prime minister called the opposition bluff and allowed states to introduce land reforms and the country to prosper.

(The writer is a Mumbai-based market analyst)