Jairam Ramesh agrees that land acquisition for corporates is a legitimate, but also an overblown concern.
Rural Development Minister Jairam Ramesh says the draft rules for land acquisition are expected in two to three weeks and the final norms should be announced in two to three months.
Earlier this month, the historic Land Acquisition Bill was approved by Rajya Sabha. The Bill seeks to provide fair and just compensation to farmers and to those who lose livelihood on account of their land being acquired.
Defending the new land acquisition bill, Jairam said that it (the bill) will reduce conflicts arising out of land acquisitions.
“I would be the first one to say that the financial cost of acquiring land will go up. But in the medium, long and even the short-term, I expect that social cost associated with acquisition in terms of conflict and hiatus between land owners and land buyers would considerably diminish,” he said in an exclusive interview with CNBC-TV18’s Shereen Bhan.
Ramesh blamed BJP's prime ministerial candidate Narendra Modi for single-handedly scuttling the chances of a GST rollout. "I asked him when I went to Ahmedabad what is your objection to the GST? He could not articulate what his objection to GST was."
Below is the edited transcript of an exclusive interview with Jairam Ramesh
Q: As far as land acquisition bill is concerned everyone is now on board with the idea that this is good intension. It needed to be done because we were dealing with 120 year old bill. The problem that people have is going to mean in terms of the acquisition process. Industry believe that this is going to delay timelines even further 24 to 60 months or perhaps even longer. Is that not a legitimate concern?
A: It is a legitimate concern but it is an overblown concern. Strict timelines have been specified in the law for each activity in the process, the social impact assessment process and there are penalties for not fulfilling those timelines. I believe that if you go through this process, the social cost associated with land acquisition comes down considerably.
The point I wish to make is that even the current procedures, they may appear simple to you but they are not simple; they are non-transparent, they are completely opaque and what it does it leads to a lot of agitation on the part of farmers, land owners, landless and so on and so forth.
So what we have done and I am glad you said there is good intention what we have done is specified a timeline, we have specified the process and now are going to be issuing the rules in the next two-three weeks we will be issuing the rules, draft rules where we will get comments from all the stakeholders.
I can guarantee you the probability of conflict arising, if these processes are gone through is considerably diminished because what we are witnessing today in state after state is conflicts on land acquisition because the old act was draconian both in terms of its content and in terms of its procedure.
Q: Since you are talking about making the process easier, more transparent and the state governments will also be coming into play, so once you notify the rules, the state governments will also then use this as a base line and then perhaps improve upon it, in fact that is the hope of industry that state governments and federal populism is perhaps going to make the process at a state level more easy?
A: This is a misconception by the way. This central legislation establishes a minimum base line. States cannot derogate from this law. They can only add to this law. Let me also say that this law is for land acquisition, this is not for land purchase. If industry wants to go and buy the land, they are perfectly free to buy the land. The only clause in this law that we have added is for rehabilitation and resettlement (R&R) which is a perfectly reasonable and sensible thing.
Q: But if it is a private transaction why did the government feel the need to come out and articulate what somebody should do on R&R?
A: Because this is a concern across the country that even in private purchases because of asymmetric power and asymmetric information between companies and the land owners, a lot of people get displaced, R&R doesn’t take place, commitments are not adhered to and for the first time we have given a legal commitment on R&R, but let me say that what that limit should be has been left entirely to the state governments.
So the state government is perfectly entitled to say that all private purchases less than 500 acres will not attract the R&R provision. That is entirely left to the state government.
The real point is that I am the greatest votary of faster industrialization and urbanization contrary to popular belief. Long before the virtues of foreign direct investment (FDI) and globalization were discovered in this country, right from the early 80s, I have been advocating it.
Q: I just want to get clarity as far as the retrospective clauses are concerned, why the need for a retrospective clause?
A: Let me explain to you the three conditions under which the retrospective clause kicks in. One, if under the old act the award has not been announced, not the activity, not the procedure, the compensation will be according to the new act.
Two, where the award has been announced but physical possession of the land has not been taken. And even if it is more than five years old, only compensation according to the new act. Third, where the acquisition is more than five years or older and where a majority of farmers have not accepted compensation, then compensation according to the new act will apply.
Remember what the political background of this legislation is. This country is littered with examples of land acquisition having taken place under extreme duress, Singur, Nandigram, I can go on but the fact of the matter is the retrospective clause was insisted upon by all political parties, by almost all stakeholders that we consulted, even some industry stakeholders we consulted were not totally averse to the retrospective clause provided the process was not tempered with.
Q: I just want to get clarity as far as the retrospective clauses are concerned, why the need for a retrospective clause?
A: Remember what the political background of this legislation is. This country is littered with examples of land acquisition having taken place under extreme duress, Singur, Nandigram, I can go on but the fact of the matter is the retrospective clause was insisted upon by all political parties, by almost all stakeholders that we consulted, even some industry stakeholders we consulted were not totally averse to the retrospective clause provided the process was not tempered with.
Q: What is the cut-off as far as the retrospective clause is concerned?
A: …three conditions.
Q: So there is no timeline? The timeline that was earlier set.
A: Within the last five years if it has happened the retrospective clause doesn’t apply. Five years in older if the award has been announced and if the physical possession has not taken place compensation according to the new act. Five years and older where majority of farmers have not accepted compensation, compensation according to the new act, only compensation. It’s retrospective only in relation to compensation. It is not retrospective in relation to R&R; it is not retrospective in relation to procedure.
Q: But compensation is not such a small matter either because you are basing your math as far as that particular project is concerned on a certain math that you have done five years ago?
A: I agree but as government we not only have to look at the financial cost of acquisition, governments are also elected to look at the social cost of acquisition. I would be the first one to say that the financial cost of acquiring land will go up.
But in the medium and long run and even in the short-term, I expect that the social cost associated with the acquisition in terms of conflict and this hiatus between the concerns of the land owners and the land buyers would considerably diminish. Three things that stare you in the face - land where 100 acres was required, 500 acres has been acquired. That is number one.
Number two is, 100 acres, 1,000 acres have been acquired and nothing has happened, land squatting by governments. I am not saying by private, it is by governments - governments are also responsible.
Number three what has happened is governments had acquired lands under urgency clause and they had given it to builders and malls and so on. We have restricted the scope of the urgency clause considerably. Today in fact many industrialists have come and told me that we are prepared to pay seven-eight times the compensation.
Q: The cost is not the concern, if I were to list in order of priority. It is the procedure and the timing. The cost is not that much of an issue.
A: The social impact assessment process is completely time driven. It is completely transparent and when the rules come out, I am hoping that we will be putting out the rules for public discussion.
I do not want to finalise the rules without getting public comments. In about 2-3 weeks, we will put it out for public comments. The process is actually quite simple, transparent and it has got strict timelines associated with it. This I can assure you.
Q: The other fear seems to be that we are at a low on our economic cycle. The economy from the 8-8.5 percent growth rates is now down to about 5-5.5 percent; six percent also looks like a bit of a stretch. We are trying to revive the manufacturing sector, the capex cycle. This is just bad timing.
A: No, I do not think so. It has taken us two years. I introduced the bill in Lok Sabha on September 5, 2011. It took us two years to get it passed. By parliamentary standards two years is a record.
Q: You pulled off a miracle, because nobody was expecting the monsoon session any business to get done.
A: I was not oblivious to economic sentiments around me. A lot of things that we tweaked in the law were in order to provide flexibility.
I was pilloried in Lok and Rajya Sabha for not accepting two very important recommendations of the Standing Committee. It said that no acquisition of land for private companies and no acquisition of land for PPP projects whatsoever.
Look at the definition of public purpose. Although this bill had unanimous support, all-party support, speaker after speaker pilloried me, criticised me saying that the definition of public purpose is so broad that it can encompass everything.
It is a very peculiar position because on the one side, Medha Patkar attacks me for saying that this act is not progressive, on the other hand people like you attacked me for saying that this is not pro-industry.
Q: But 70 percent consent, 80 percent consent….
A: Mamata Banerjee says it should be 100 percent. She was part of our coalition.
Q: The consent clause; do you really believe that it is going to be easy for even the government?
A: We have to go. We are not living in a Stalinist state. We are not living in a command and control economy. We are not living in a state where the government can exercise its powers of eminent domain unilaterally and indiscriminately as it has over the past few decades causing numerous cases of misery to farmers and tribals. One manifestation are these Maoist affected areas in central India, these 88 districts.
A written consent is absolutely essential to give a confidence. After all, land is the only form of social security. How can the government say I am going to acquire this land because I have decided what is good for you. Let the Gram Sabha, farmers decide. Why not? If we believe in empowerment, decentralisation then we must put our money where our mouth is.
Q: Speaking of Gram Sabha, I want to bring up the Niyamgiri example here. 12 Gram Sabhas there have rejected the proposal.
A: These Gram Sabhas were selected by the state government.
Q: I am not bringing politics into this, but when Rahul Gandhi says that I am your sipahi and I will go and fight for your cause, their government seems to sound bipolar. On one hand you have Mr. Chidambaram and Anand Sharma talking about the need for FDI, industrialisation, greater capital. On the other, you seem to be taking a position where it says we do not really care about industry, about large scale projects are going to be built or not. I am not questioning the fact that tribal rights should be walked all over. I am merely saying that should the articulation not be solution oriented as opposed to saying, look what we have done for you and not for industry?
A: If government is bipolar, it is reflection of a bipolarity in the Indian society. The Niyamgiri mine will supply around 7-8 percent of the total bauxite requirements of that refinery. Who else would have dictated that do not make a big issue out of this and go and source that bauxite for somewhere else? I had to take a decision.
I gave the final clearance for Posco. The very same guys who held me as a hero for Niyamgiri were saying that I am a corporate sell out for giving the final approval to Posco. So it is in the facts of the case, what the facts of the case are. There was no hidden agenda.
It did perhaps give a signal that here is one segment of government wants FDI and wants more companies. Here is another segment of government imposing laws. Remember, these were laws passed by parliament and accepted by government.
Q: What is the Congress' position now on industrialization? You know that it has been a fairly acrimonious relationship that government has had with industry. You never had a situation in the last couple of years where public letters have been openly written to government about the manner in which industry is being treated.
A: It is an odd question to ask off a party which was responsible for the industrialisation of this country.
Q: Sure, but not so odd in the current situation, where you have actually seen growth come off significantly, ease of doing business is abysmal and has actually setup a committee to look at the ease of doing business.
A: Any industrialist who follows the laws of the land has nothing to fear. It is only industrialists who bypass the laws of the land and who navigate the system through their extra-entrepreneurial skills, they have something to fear.
Q: So it is the industry's fault. The fact that there has been policy paralysis, lack of clearances, stuck projects is industry's fault.
A: In the Congress party, I am being accused of being a spokesman for industry and here you are putting me in the dock, but let me say this that there are many people in the industry who give economic reforms a bad name by their behaviour.
I do not need to expand on this, but the fact of the matter is that we all want entrepreneurial activity to flourish in this country. The party is completely wedded to the idea of faster industrialisation, faster urbanisation, but on terms that do not impose misery in rural India, on terms which are equitable and transparent.
There is nothing wrong in my view in asking for better compensation for land owners whose land is being taken in the process of industrialisation. You cannot industrialise this country at gun point. You cannot urbanise this country at gun point.
Q: I want to take forward this conversation about the social cost and the financial cost and the financial impact. The government is writing cheques that it cannot finance at this point in time.
A: But we have financed it.
Q: At what cost? Look where fiscal deficit is today?
A: You are asking me whether this economy can absorb the cost of National Rural Employment Guarantee Act (NREGA) and the Food Security. Certainly, an economy that is averaging a rate of growth of 7-8 percent which we will, if this temporary blip is kept aside, this country has adequate resources to meet these commitments.
These entitlements also become opportunities for reforms, opening doors to introducing far-reaching structural reforms which we would otherwise not have done at all in the first place.
Q: In 2004 perhaps the BJP misread India shining. Are we likely to be in a situation where again the discontent that we are seeing in the urban centres on Twitter that perhaps because of your entitlement economics and entitlement politics you will perhaps be able to capture ….. (Interrupted)
A: What you think is entitlement is what the person who is getting the entitlement thinks is empowerment.
What you think is an entitlement the tribal thinks is his right, is his empowerment; the Dalit thinks its his right and anything that is pro farmer, pro-landless, pro-tribal and pro-Dalit is pro India.
GST – the goods and services tax, the single most important economic reform that any government can take. Who though of GST? The BJP. It was thought of during Yashwant Sinha's tenure as finance minister. Who made a commitment to introduce GST? The BJP. They were voted out of power.
Who reaffirmed the commitment to introduce GST? The Congress government. Who chaired the conference of state finance ministers to introduce goods and services tax (GST)? Sushil Modi, the deputy chief minister of Bihar. Who single handedly derailed GST? The other Modi, so, what one Modi was trying to do, the other Modi undid.
Q: Can we see a break through in the winter session of Parliament as far as GST is concerned. You were lauded for bringing opposition on board for the land Bill?
A: If the Prime Minister's candidate of the BJP wants to have it, I am sure BJP will bring it. But it is a fact it is the chief minister of Gujarat and I asked him when I went to Ahmedabad what is your objection to the GST? He could not articulate what his objection to GST is except perhaps the not-made-by-me syndrome.
It was the wrong Modi who advocated GST. So, please be a little more careful on whom you back and whom you project as answers to India's problems.
Q: I am not backing anybody nor projecting anybody. Is that the message you are sending out to corporate India and that constituency?
A: Corporate India is perfectly free to do what they want. Person's economic philosophy cannot be divorced from a political ideology and his social outlook. These are all parts of the same coin.
Just because somebody is appealing to you in terms of narrow economic policy, you cannot be oblivious to the larger political context and to the larger social context.
I hope that when corporate India makes its choice it looks at the totality and not just at one small needle in a large hair stag.
Q: What is the message going to be from the Congress to corporate India as it certainly seems to be in the other camp at this point in time?
A: I know a lot of corporate India which is supporting the Congress too. They are hedging the bets in true corporate fashion – risk averse behaviour.
Writing the epitaph of the Congress has been a risky enterprise. In 2004 our epitaph was written, we were a deep discount bond in 2004 and we became a premium offering.
In 2009, we were not a deep discount bond but we were a bond whose value was falling. We came back to power and believe me 2014 is not a done deal. The reports of our death are grossly exaggerated and we may yet pull of a surprise contrary to what some corporate prognostications might be.
Q: You made two comments this morning that not enough has been communicated by the three leaders of the Congress party – the Prime Minister, Sonia Gandhi and Rahul Gandhi. Is that likely to change because on the other side you have a man who sends you an SMS, an email, atleast he is very clear about what he stands for …..(Interrupted)
A: I am sure the big three of the Congress party will communicate at the appropriate occasion. They don’t believe unlike the person you referred to, they don’t believe in communication for communications sake.
Q: Is Rahul Gandhi also going to be very clearly anointed the prime ministerial candidate?
A: Why does he need to be? It is completely wrong question. Ours is not a prime ministerial sweepstake, it is not a presidential sweepstake. Ours is a party sweepstake.
Q: People would like to know who the Prime Minister will be if they vote the Congress back to power.
A: That is precisely the point. We are going to vote the Congress back to power. We are going to the elections on the basis of a party ideology, a party manifesto, a party performance and that is what Indian democracy is all about.
Q: He is leading your campaign then why the hesitation to say that this is the time he is going to be he is going to be running the country?
A: We don’t need to. He does not suffer from any deep rooted insecurity complex that he has to announce as the prime ministerial candidate. He doesn't have to do it. It is well understood that he is executing our campaign, he is masterminding our campaign, he is part of the campaign, he is the face of our campaign along with the prime minister and Sonia Gandhi.
However, certainly there is no need for us. There was a pressing need for the BJP because there were many claimants. They had RSS. The 2014 election contrary to what is being put out is not between the Congress and the BJP, it is between the Congress and the RSS.
It is high time that the RSS got registered itself as a political party and fought politics without these masks of having the BJP because the real fight is with the RSS. That is what all the events in the last few months have demonstrated.
Q: I want to end by picking up on a comment you just made that the BJP felt it necessary to anoint Narendra Modi as the prime ministerial candidate because there were too many claimants. In your case you don't need to because there are no claimants. So, it is going to be Rahul Gandhi?
A: Rahul Gandhi is there, he is the leader and we all know that he is the leader. We are all secure in our knowledge that he is the leader. He is secure in his knowledge that he is the leader. So, there is no need for us. We have better things to do than worry about who our prime minister is.
We have to see how to get the urban vote back. We have to see how we are going to embellish our credentials further in rural areas, how we get into states where we have traditionally been weak. We have bigger challenges rather than worry about how is going to be our Prime Minister.