NAC lands a coup PDF Print E-mail
Thursday, 14 July 2011 00:00
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If there was any doubt left after Tuesday’s Cabinet reshuffle that Uttar Pradesh was top on the government’s mind, Jairam Ramesh’s decision to back the NAC’s proposals on land acquisition makes the priorities clear. Interestingly, Wednesday’s decision to back the NAC’s proposals on land acquisition—Jairam said the draft Bill would be put out for debate next week—comes after the government had indicated that it was not going to accept the recommendations. But that was under a different rural development minister. Given that Rahul Gandhi’s challenge to Mayawati is largely centred around the Bhatta-Parsaul and other land acquisitions, the move will have important ramifications.

Gandhi’s campaign and the fact that the courts have struck down various land acquisitions by the Uttar Pradesh government forced Mayawati, and rightly so, to continuously come up with more attractive land acquisition rates and policies. To the extent the NAC proposals better these—the one-time payment, for one, has to be six times the circle rate; then there are generous annuities linked to minimum wages, jobs, and so on—accepting them is a good thing. The problem, however, lies with some of the other proposals. For one, the NAC wants no role for the private sector wherever more than 400 families are involved. Given how most private sector land acquisitions have been relatively smooth and most government acquisitions troublesome, that is certain to set back large projects; a government monopoly over land acquisition for large projects also gives government the ability to play favourites. The plan, it’s important to keep in mind, is a U-turn on the larger role for the private sector. The current draft Bill, for instance, suggests that the private sector buy 70% of the land first, and it is only after this that the government acquire the rest—Mamata Banerjee wanted this to be raised to 90%, but presumably a loan package for West Bengal could be dangled as a bait.

A critical piece here is a 25% capital appreciation clause. One of the NAC proposals, put forward by NC Saxena, is that a fourth of any capital appreciation up to 25 years after the land is sold will have to be shared with the original landowner. So, if a flat built on land got for a housing complex is resold after 24 years, a fourth of the capital appreciation will be given to the landloser. While Saxena is of the view the NAC has ratified this, there is some confusion. And Jairam’s statement about whether land should be acquired for golf courses suggests a government role in deciding which projects will be cleared. Why not just specify conversion rates from agriculture to industrial/commercial use and let the private sector acquire the land?


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