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Thursday, 12 March 2015 00:00
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Land Bill concessions make developing new cities a nightmare, so more urban slums seem likely

With India’s top 20 cities, according to an NCAER analysis, accounting for 10% of its population, 20% of expenditure, 30% of income and 60% of surplus income, it is not surprising that migration from rural India is going to intensify dramatically over the coming years. So, from 220 million in 1991, urban India’s population rose to 340 million by 2008 and is projected to rise to 590 million by 2030—that’s 26% of the population in urban India going up to 40% by 2030. Accommodating all those people, McKinsey reckons, means India needs to create 700-900 million square metres of commercial/residential space each year, or two new Mumbai a year till 2030.

If it doesn’t, it is not as if the urbanisation will stop—farmers have to move to urban areas, this is where the jobs and the incomes are (see graphic); better agriculture facilities will help staunch the flow, but just at the margin. So if there are no planned cities, there will be larger Dharavi-type urban slums or what are called census towns, essentially urban agglomerations  but without bare-basic civic amenities like sanitation and water or electricity.

Prime minister Narendra Modi knows this, and that is why he has been stressing upon smart cities, and that is why a large part of Swachh Bharat is not about cleaner streets—though that is how most see it given the pictures of Modi and others sweeping the streets—but is about sewerage, sanitation and clean water. And that is why rural development minister Birender Singh ripped into the Opposition on Tuesday for opposing the NDA’s changes to the land Act, alleging that they were just paying lip service to farmers—Uttar Pradesh’s land acquisition for the Noida expressway, he told “Mulayam Singh’s nephew”, was concluded in one day!—by giving them just enough sops to live, but not to live with dignity. If land holdings were getting fragmented, as he said, farmers simply cannot eke out even a bare-basics living from just farming. The land has to be sold, and farmers need to move on.

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This is why it is amazing that the government should so sharply curtail the possibilities of building new cities. Building new cities was always going to be a problem since, under the UPA’s land Act, this required lengthy social impact assessment and consent of land losers—anywhere up to 5 years to just get the land, based on the timelines prescribed in the Act. So what the NDA did—and Modi did well to accept his party was equally to blame since it didn’t oppose the UPA’s Act—was to modify the UPA Act by removing the consent and SIA clause for 5 areas. It is important to keep in mind the NDA did not either reduce the compensation or the rehabilitation/resettlement clauses of the UPA Act—this includes higher monetary compensation, housing and employment, etc, for the affected people. All those opposing scrapping of the SIA/consent clauses would do well to give details of successful urbanisation or creation of large infrastructure where people have been happy with what happened anywhere in the world.

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It is obvious the BJP was looking for more allies, and so diluted its Bill, but at such a huge cost? The BJP Bill, even its admirers should remember, does not help in land acquisition for any kind of factory—how Make-in-India will happen in such a situation is anyone’s guess. Theoretically, firms can buy land on their own—and it is left to each state to decide at what size of landholding the SIA and consent clauses kick in—even under the UPA’s Act. But anyone who has tried to buy land knows, getting this is very difficult without government help, more so since land titles are so unclear in both rural and urban India.

So, the BJP had, to begin with, not made revolutionary changes to the UPA’s regressive land Act. And even this has now been diluted badly as far as new cities are concerned. The new cities were not carved out as a separate category by the BJP, they were clubbed in what was called ‘industrial corridors’ in the 2014 ordinance on land. While that was not particularly satisfactory, it held out the promise of being able to acquire land for new cities along the Delhi Mumbai Industrial Corridor through the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC)—if other cities were to be developed aside from in these corridors they would have to go the long way of consent/SIAs.

Under what has now been proposed, only 1 km of land along either a ‘designated railway line or roads for such industrial corridors’ can be acquired—in other words, small linear cities/logistics parks! There is a hope among some that the definition of roads (plural) offers a way out since there could be multiple such roads in a city, as a result of which, for instance, the city could be even 50 km across in terms of width.

The problem, however, is that all of this makes the process very iffy and subject to all manner of legal challenges—do you ‘designate’  50 roads in an agricultural area and then acquire land around it? Another view is that, along with SEZs and National Investment Manufacturing Zones (NIMZ), cities can also come under the rubric of ‘infrastructure’ which is one of the 5 areas carved out by the NDA where consent and SIA would not apply, but other conditions such as compensation and R&R will apply. But go to the list of what is ‘infrastructure’—yes, there is such a list, gazetted on October 7, 2013—and you find NIMZs are not included (‘industrial parks’ are), nor are cities. In which case, one possibility is that, after the land Bill is passed, the list of ‘infrastructure’ can be expanded to include NIMZs and cities through another gazette notification.

The problem with this is you don’t know when it will happen, and whether that too will be riddled with problems. And if a country wants to attract investments, doing it in such a roundabout fashion hardly inspires confidence—investors want straight-forward laws, not one sub-section of a law that has to be read in conjunction with a sub-clause in another, and the whole thing be subject to the interpretation of a third party.

Indeed, over the past few weeks, more instances are being seen of reforms either being brought in, or scuttled, through such fine-print governance. In the case of the coal blocks, having designed the auctions to encourage firms to quote lower and lower prices for fuel costs, the government is now talking of putting a cap on fixed tariffs even though it was obvious that firms bidding lower energy charges would pass them on to customers via higher fixed costs. Similarly, a budget fine-print seeks to take away vital monetary policy tools away from RBI. None of this augurs well for transparency which is vital to push through India’s reforms process.

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