Land-grabs for urban infrastructure and real estate are being promoted to bring investment and employment for a few, at the cost of lives and livelihoods of many
Finance Minister Arun Jaitley claims that the Land Ordinance 2014 was promulgated to bring 13 Acts within the purview of the Land Acquisition, Rehabilitation and Resettlement Act, 2013, before the six- month deadline to include them ran out on December 31, 2014. Despite controversy, the latest Amendment Bill approved by the Lok Sabha, and currently facing a logjam in the Rajya Sabha, makes minor modifications to the Ordinance. Both replace acquisition for ‘private company’ with ‘private entity,’ that includes a “proprietorship, partnership, company, corporation, non-profit organisation or other entity under any law for the time being in force.” Exemptions from social impact assessments (SIAs) for all projects and consent provisions for private companies (80 per cent of land owners) and Public-Private Partnerships (70 per cent) include projects undertaken by the state and private entities for: i) national security; ii) industrial corridors; iii) rural infrastructure; iv) ‘affordable’ housing and housing for the poor and; v) infrastructure and social infrastructure projects including PPPs where the land vests with the state. These projects run the entire gamut of contemporary public and private infrastructure, industrialisation and urbanisation projects aspiring land and resources in the country.
Worse, the provisions dangerously reassert the power of the hand that gives compensation. They represent an ambitious assertion of sovereignty by the state over citizens, recuse the state of nominal accountability through removal of SIAs, and render citizens ‘subjects’ liable for compensation, no more. To add insult to injury, any complaints by aggrieved parties on the state’s failure to follow due process now require the prior consent of the state, an ingenious twist to the principle of ‘prior informed consent’ — and a move more regressive than the colonial 1894 Land Acquisition Act.
Manufacturing in India has stagnated for over two decades at around 15 per cent of the GDP. The case of SEZs is illustrative — of the 377 notified SEZs in the country, only 196 are operational (where operational indicates at least one functioning unit). According to the Comptroller and Auditor General of India, over 63 per cent of the land acquired for SEZs is lying vacant. While slack global markets may have to do with the slow pace of investment in SEZs despite tax concessions (the Minimum Alternate Tax notwithstanding), this still does not explain where productive investment is to come from in infrastructure corridors and new smart city urban enclaves. The 2013 law allowed for land lying unused for five years after acquisition to be reverted to either the original owners or the state, but the Amendment bill extends this period to years specified for the project and exempts years spent in litigation.
‘Make in India’ seems a pipe dream anticipating jobs in trickle-down effects of infrastructure investment; latest figures record a decline in the overall rate of investment. The Amendment Bill is a foil for land-and-resource acquisition by global and domestic finance and real estate investors that thrive on growing land markets and the appreciation of the price of land and property.
The growing real estate economy
A recent report by Cushman & Wakefield ranks India 20th among the current top 20 real estate investment markets globally, with an investment of $3.4 billion in 2012. A study by Global Construction Perspectives and Oxford Economics further predicts that India will become the world’s third largest construction market by 2025, adding 11.5 million homes a year. In 2011-12, the shares of real estate and construction together accounted for 19 per cent of the Indian economy, growing from 14.7 per cent in 2000-01. More remarkably, in 2009-10, the construction sector formed the second largest employer of workers in India, employing 11 per cent of the workforce after agriculture (36 per cent). The rising price of land has made real estate a high return investment. Today, there are many private builders, and their operations range from small-scale projects in towns or ‘rururban’ areas to regional and national projects. Regional and national developers also cater to a variety of commercial and retail real estate and infrastructure-related construction, the latter often through group or subsidiary companies.
A recent report by Cushman & Wakefield ranks India 20th among the current top 20 real estate investment markets globally, with an investment of $3.4 billion in 2012. A study by Global Construction Perspectives and Oxford Economics further predicts that India will become the world’s third largest construction market by 2025, adding 11.5 million homes a year. In 2011-12, the shares of real estate and construction together accounted for 19 per cent of the Indian economy, growing from 14.7 per cent in 2000-01. More remarkably, in 2009-10, the construction sector formed the second largest employer of workers in India, employing 11 per cent of the workforce after agriculture (36 per cent). The rising price of land has made real estate a high return investment. Today, there are many private builders, and their operations range from small-scale projects in towns or ‘rururban’ areas to regional and national projects. Regional and national developers also cater to a variety of commercial and retail real estate and infrastructure-related construction, the latter often through group or subsidiary companies.
Indian real estate remains regulated. Global finance is unable to directly invest in housing, commercial and retail real estate per se, but invests in them through infrastructure projects like ‘smart cities’ and ‘industrial corridors.’ Smaller-scale, regional, state and district level developers and brokers are abundant in India, and fly-by-night operators join their ranks. It is in this mix of operators and urbanisation projects backed by policy and investment that we find the growing consolidation of a Real Estate Economy in India.
Growing differential rent from ‘conversion’ of agricultural land to real estate is also reconfiguring the political economy of land in urban peripheries. Thus, with appreciation of land prices as infrastructure and development projects are announced, some farmers ‘give up’ land without resistance for immediate returns, as agriculture is less profitable or valuable. Growing agrarian distress caused by market-led agrarian reforms that entrench bigger and deeper land markets, environmental stresses and the consequent indebtedness of farmers is adding to the pull away from agriculture.
According to the Ministry of Agriculture, in 2007-11, the area of cultivable land in India shrank by 7,90,000 hectares, largely attributed to diversion for non-agricultural purposes like construction, industries and other development activities. Landless agricultural workers likely swell the ranks of construction and other migrant workers in dismal conditions, although official data for this is hard to come by. As more and more land gets diverted to real estate from agriculture, there is concomitant pauperisation of especially small and marginal farmers, who are unable to buy more land. With little by way of productive job creation and growing loss of agrarian livelihoods, where will this dispossessed population go? And what about the fundamental questions of food security and participatory development?
If only agribusiness is to produce food for all with the help of global finance, the policy emphasis on urbanisation and deeper land markets is nothing but a capitalist attempt to take over large sections of the domestic agrarian political economy, with impoverished workers adding to the low-wage reserve workforce that capitalist profits thrive on.
As global capital looks for ways to recover from its crises and domestic capital for greater expansion, industrial corridors, housing, urbanisation and infrastructure projects offer attractive avenues of return. Land-grabs for urban infrastructure and real estate facilitated through the state and markets are being promoted to bring investment, employment and growth for a few, at the cost of dispossession of lives, livelihoods and environments for many.
The lessons from conflicts over land and resources in Nandigram, Raigad, Goa or Chhattisgarh offer little to the ruling establishment. Global and domestic capital seek to assert sovereignty over India’s land and resources through the state — the Amendment Bill 2015 attempts to deliver. Will the Modi sarkar unleash a fresh set of conflicts over land and resources that marred the SEZ model and beat it to a point of failure? The proposed land acquisition framework is likely to face deeper contestation in villages and towns across India.
(Preeti Sampat is a public policy scholar at the Hindu Centre for Politics and Public Policy and teaches at the Department of Sociology, Delhi School of Economics.)
Keywords: Land Ordinance 2014, real estate, land bill, land acquisition, farm land, special economic zones, SEZ, land banks