Rahul Gandhi defaming industry for political purposes

R JagannathanFirstpost.com

The Congress Veep, Rahul Gandhi, may have rejuvenated his flock by launching feisty attacks on the Modi government after a 57-day disappearing act, but he should ponder over the damage he is doing to business sentiment in the process.

In his efforts to paint the Modi government as pro-rich, he is tilting too heavily against industry and business, who are vital for job creation. Business cronyism was rampant during the UPA regime, but the flak and mud-slinging against corporates is happening now, when crony issues are being fixed one by one – as evidenced in the success of the coal and spectrum auctions.

It is fair to say that India Inc cornered a lot of rent-seeking opportunities in the past during the UPA regime, and when the game was up, banks were left with a high volume of bad loans. But this does not give the Congress crown prince a licence to tar business in general just to score political points against the government.

The other day, while taking a strong stand against the modified Land Acquisition Bill, he alleged that the NDA government was a “suit-boot ki sarkar” which favoured corporates. He seemed to imply that the government was batting largely for corporates.

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On yesterday's question-hour (22 April), Rahul batted for “net neutrality” and again alleged that the government was on the side of corporates in this fight too.

The facts unfortunately are not on his side. Even though the net neutrality debate was set off by a Trai paper on the subject, and the Airtel deal with Flipkart (later abandoned) to give free access to users of the e-commerce company’s website, the fact is the government has taken no decision on this issue. After Trai makes its recommendations, the matter will go to the Telecom Commission and then the cabinet. It is highly unlikely that any favours will be shown to corporates, especially given the strongly negative sentiment generated among netizens on the subject. As one of the biggest users of social media platforms and the internet, a net-savvy PM is unlikely to side with corporations in this fight.

But the more important rebuttal needs to be on the Land Bill. Rahul Gandhi claimed the bill was anti-farmer and pro-industry.

The fact is the bulk of the land acquired in the past went not to industry, but irrigation and dam-building.

According to a factsheet put out for members of Parliament based on available literature in the public domain, more than 50 million people were displaced by development projects undertaken since independence.

This is a large number, and would prima facie seem to buttress the anti-industry argument of the Gandhi scion. But here’s the point: the overwhelming bulk of the displacement happened due to irrigation projects and dams, and not industrial projects. It is the rich farmer who benefited most from irrigation projects, and not industry, except by way of higher power supply.

Says the factsheet put out in 2013: “In India around 50 million people have been displaced due to development projects in over 50 years. Around 21.3 million development-induced IDPs (internally displaced persons) include those displaced by dams (16.4 million), mines (2.55 million), industrial development (1.25 million) and wild life sanctuaries and national parks (0.6 million).”

The factsheet gives details only for 21.3 million of the 50 million allegedly displaced, but assuming the remaining displacements are in the same proportion, it is clear that it is farmers’ interests – dams are used largely for irrigation, and for power, which again is subsidised for farmers and not industry – that prompted the bulk of the land acquisitions in the past. Industry had very little to do with it, whatever be the popular myth-making about it.

The second major area for land acquisition is coal mining, but here too the figures do not show any alarming acquisitions; even if one deems the figures as alarming, it is the government, which owns Coal India, that has to take the blame.

The factsheet shows that Coal India has, over the years, acquired 1,54,386 hectares of land for mining, and this is hardly a huge dent on available agricultural land. The coal mining acquisitions of 1,54,386 hectares convert to 1,543 sq km of area acquired by Coal India – which is less than 0.1 percent of total agricultural land in India, even assuming all the land acquired was agricultural land – which is unlikely.And remember, agricultural land is around 60 percent of India.

Or take another calculation. The changes made by the Land Acquisition Bill of the Modi government allow for acquisitions without social impact assessment if they are made for defence, industrial corridors, infrastructure, rural roads and housing for the poor. It is difficult to estimate how much land is required for the first four activities, but housing requirements are not difficult to estimate since the Modi government wants every family to have a house by 2022. How much land will be acquired for this?

A calculation made by Ajay Shah of the National Institute of Public Finance in The Economic Times some time back has this to say: “If you place 1.2 billion people in four-person homes of 1,000 square feet each, and two workers of the family into office/factory space of 400 square feet, this requires roughly 1 percent of India’s land area assuming an FSI (floor space index) of 1. There is absolutely no shortage of land to house the great Indian population.”

If one were to make an arbitrary allocation of another 1 percent of land for defence installations, roads, industrial corridors and industry, we are talking about a total potential acquisition of not more than two or three percent of available land for all possible purposes in the foreseeable future.

And remember, any land acquisition – even assuming it is done forcibly for public purposes – ends up enhancing the value of the land for the remaining 98 percent of land owners. Any development does that.

The Land Bill that Rahul Gandhi says favours corporates may – even in the worst case scenario – end up affecting 2-3 percent of land-owners (and they will get two- to four times market prices, anyway) but will benefit the rest.

Scare-mongering affects everybody, but a sober analysis suggests that the beneficiaries will vastly outnumber the losers – even assuming land acquisitions are done as ham-handedly as in the past. But that too may be an unfair assumption, given the heightened state of alertness of all farmers today.

Rahul Gandhi is clearly crying wolf, and defaming industry for purely political purposes. Assuming he wants to come to power at some point in his career, he should not be giving business that bad a press just because he wants to attack the Modi government.

The writer is editor-in-chief, digital and publishing, Network18 Group