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Mainstream, Vol XLVII, No 43, October 10, 2009

Reply: Private versus Public Purpose

Sunday 11 October 2009, by D. Bandyopadhyay

I am grateful to Ms Vasudha Dhagamwar for raising a debate about the Land Acquisition (Amendment) Bill 2009 [‘On Opposition to the Land Acquisition (Amendment) Bill’ by Vasudha Dhagamwar, Mainstream (September 19, 2009)—a rejoinder to my ‘Why We Must Oppose the Land Acquisition (Amendment) Bill of 2009’, Mainstream (August 14, 2009)]. It is only through the clash of ideas that new ideas are born.

To take her “small matter” first, I received a copy of the Bill from the Ministry of Rural Development on June 12, 2009 which bore the year “2009” in the main title. But above that in small but bold print was the following side-heading: “Bill No. 97-C of 2007”. Since the main title carried the figure 2009, I used it. In any case it is a minor point as conceded by Ms Dhagamwar herself.

She correctly highlighted that my main objection is regarding the use of the term “any other purpose useful to general public” instead of “public purpose” simpliciter. To understand the real implication of this term one has to go a step backward. That is to say who is initiating the process of taking over land from farmers and for what reasons? In this case the initiator is “a person”. The explanation states: “The word person shall include any company, or association, or body of individuals whether incorporated or not.” The duplicity of the government starts from this point. Having deleted “and for companies” in the preamble, they are bringing back the company under the camouflage of a person. This deception is uncalled for. It only indicates the crooked mindset.

Now comes the issue: why should a company go in for purchasing 70 per cent of the required land for anything but profit motive? It is the desire to optimise private profit which is the main motive force behind the entire exercise. If someone gets employment, or if someone else gets a subcontract for supply of raw materials or inputs, or if some other persons get a chance to sell the output to earn some income, these are all incidental to the main activity of making profit. There is no public purpose involved in these activities. In fact in its relentless pursuit of profit, the company may restrict production, increase the selling price to the detriment of the interests of the general public; it may lay off its employees wholly or partially or even close down its operation temporarily waiting for a better time to make profit. None of these activities could be termed as “public purpose”.

The amendment employs the term “useful to general public”. A soap manufacturing company does produce a commodity which is “useful to general public”. But inherently there is no public interest involved in this process. Firstly, there are many other soap manufacturing factories in the country. So one more or one less would not make much difference to the general public. Pharmaceutical companies produce medicinal products which are “useful to general public”. But it is common knowledge that many, if not all, of them, by using a “brand name” instead of the “generic name” of the product, make unconscionable levels of profit, totally unconcerned with their impact on the users among the general public. Only the rate and volume of private gain motivate these companies. They are not in any way imbued by the concept of “public purpose”.

When “a person” purchases 70 per cent of the land for making private profit, what “public purpose” would be involved in acquiring forcibly the remaining 30 per cent of the land by the State? In the first place, “a person” did not seek the permission of the State for starting an enterprise, before purchasing 70 per cent of the required land. Secondly, who has determined that the proposed venture would be “useful to general public”? There was nothing other than some market survey for making assessment of the latent demand for the product or service. Thirdly, who has assessed the reasonableness of acquiring “x” acres of land of which 70 per cent has already been purchased? Who would guarantee that this buying spree was not motivated by the speculative instinct of “a person” to acquire land when the going is good to make a “kill” when the prices rise to the expected level to sell it? By making the government acquire 30 per cent of the land “a person” would get the government involved in the murky deal.


At this stage one might try to find out the rationale of the magic figure of 70 per cent. This figure did not come out of the hat of any magician. There is a statistical basis behind it. The NSS Report No. 491 on Household Ownership Holdings in India, 2003 states that marginal, small and semi-medium landowners constitute 96.4 per cent of the total landowners. They own 65.4 per cent of land. And 3.6 per cent of medium and large farmers own 34.6 per cent of the total land. Aren’t these figures of 65.4 per cent and 34.6 per cent quite comfortably close to the figures of 70 per cent and 30 per cent mentioned in the amendment Bill? It is quite easy to intimidate, coerce, cajole and bully the marginal and small farmers. They could also be effortlessly seduced, lured and/or enticed to part with their land. But the other 3.6 per cent, of which large farmers constitute only 0.60 per cent owning 11.55 per cent of the total land, would be hard nuts to crack. They have enough political and social influence and both money and muscle power to resist upto a point any attempt to dislodge them from their property. Hence, “a person”, which in effect means “a company”, could easily manipulate, negotiate or manage 70 per cent of land belonging largely to small and marginal farmers. But it would face possible refusal, resistance and even hostility from the remaining 3.6 per cent of owners owning 34.6 per cent of land. Hence bring in the State power to overcome their opposition. The intention behind and construction of this provision seem to be highly diabolical, to say the least. It has been designed to help the land mafia to acquire land for speculative purpose including SEZs.

Moreover there is nothing in the amending Bill to indicate that the government can refuse to acquire 30 per cent of land, if it were their opinion that it was not for “public purpose”; because public purpose has been deceitfully redefined only to suit this point. There is no escape clause for the government to refuse to acquire the other 30 per cent if a person had purchased 70 per cent of the required land. So if Ms Dhagamwar objects to the word “stampede”, I am willing to substitute it by the word “compelled” or “obliged”. I leave the choice to Ms Dhagamwar.

One is charmed by the childlike faith displayed by Ms Dhagamwar in the inherent humaneness, kindness or graciousness of governments in India in their acts of commission or omission relating to land acquisition in the recent past. Whether it was in Kalinganagar, or POSCO, or in Dadri or Singur, or in Nandigram or Raigada, governments of all hues and colours behaved in a uniform manner as atrociously and brutally as any conquering colonial power. There was no democratic touch in their ferocious demeanour.

Since the acceptance of the neo-liberal economic policies in the early nineties, governments everywhere whether at the Centre or in the States have been functioning as the “managing committees” of big bourgeoisie. With a twist of a phrase in the Budget speech one of the feuding brothers of a big industrial family coolly collects a largesse of Rs 20,000 crores. And no one is bothered. POSCO, which in its Pohan campus in South Korea operates the biggest steel plant of the world producing 16 million tonnes of steel per year, owns only 1000 acres of land. But the same POSCO in Orissa requires 4000 acres of most fertile paddy and betelvine land for producing around 10 to 12 million tonnes of steel. This is due to the generosity of its local “managing committee” which happens to be the BJD Government in Orissa.

No one denies that industries are not required. The debate is about the location of such industries. With our employment figure in the organised sector stagnating or even diminishing, the secondary sector does not provide any alternative to the excess labour in the primary sector. The path of jobless or even job-loss development that we adopted in mindless pursuit of a mythical growth rate had made our policy-makers blind and deaf to the worries and woes of the common women and men in India. Extremism in the Central Indian uplands and woodlands is nothing other than an angry expression against this injustice perpetrated in the name of economic growth. We respond to this situation by raising any number of India Reserve Battalions and acquiring helicopter gunships without any attempt to address the basic problem.

I am happy that Ms Dhagamwar agrees with the idea that companies should buy all the land they require thorough open and transparent negotiation. But there have to be a few caveats. In the first place because of the asymmetry of bargaining power marginal and small farmers would require some protection. The minimum price on which the bargaining would start should be the price noted in the Land Registrar’s Office under the Indian Stamp Act or any other relevant evidence.

Secondly, every State has its land reform law which fixes a ceiling limit on land holding. Within the ceiling limit the land market is free. But if a company requires more land than what is permitted under the ceiling, then it would have to ask for exemption from the State Government. For that purpose it would have to submit a detailed project report (DPR) to justify its land requirement. After an appropriate scrutiny the government may agree to, or reject or alter the area required. The attempt should be to prevent purchase of more land than is legitimately required so as to prevent land specualtion in future. A real case would clearly illustrate the point. Messrs Hindustan Motors Limited was given an area of 750 acres in Konnagar in the district of Hooghly in West Bengal in the early fifties of the last century. In the last fifty years the company could not use more than 300 acres for the purpose of manufacturing cars. At the turn of the century the company applied for using the excess area of 450 acres, including 100 acres of water body, for the development of a mini-township. Real estate business being more profitable than producing “Ambassador” cars, the company turned into a realtor with the full involvement and connivance of its “managing committee”, that is, the CPI-M Government of West Bengal. Such speculative misuse of prime industrial land has to be stopped.

Thirdly, because of the above mentioned possibility being repeated elsewhere, there should be a quasi-independent Land Regulator in every district to ensure that such land purchase by companies do not adversely affect the livelihood of farmers and agricultural workers, that marginal and small farmers are not unfairly treated, that fertile irrigated land is not converted to non-agricultural use, that companies do not purchase land at the cheap going market rate, more than they would really require, that displacement is minimised and that eligible displaced persons do get some alternative evocation for their sustenance.

Lastly, it should be appreciated that in the concept of public purpose, the concept of “public interest” is deeply embedded. Private purpose, which basically means making private gains, and private profit can never be construed as public purpose. Private purpose and public purpose are in effect two irreconcilable and antagonistic concepts both in logic and in ethics. Any attempt to cause a fusion between the two, as has been done in this amendment Bill, is both a prevarication and a deception. The doctrine of Eminent Domain can be exercised by the State if only for clearly defined and ethically sound “public purpose”. Anything else would be a colourable exercise of authority.

The author is a former Secretary, Rural Development, Government of India, and the architect of ‘Operation Barga’ that changed the face of the West Bengal countryside.

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