Ground reality

Prospect of a property rights movement

Much has been written about the tragedy of Singur and Nandigram in West Bengal. Yet not much light has been shed on the real significance of the protests by farmers on land acquisition. Brand Buddhadeb has suffered a serious blow much beyond West Bengal. But, more importantly, an undercurrent of awareness is spreading through the grassroots of society on an almost unheralded issue — the protection of property rights.

This article was published under the title "Ground Reality", in the Hindustan Times, on 24 March 2007.

Political and social activists have been hurling arguments to score points against rivals. If one side stresses on the need for industrialisation, the other calls for inclusive growth. The self-proclaimed champions of the poor are hobnobbing with big businesses, while the Opposition spectrum, from the fringe Left to the far Right, want to be seen to be siding with the rural poor. And business leaders, who have been enjoying the freedom to mobilise capital, want investment opportunities to be sugar-coated with a range of privileges and subsidies, including tax breaks and land at low costs.

Sixteen years after India began dismantling the licence and permit raj, it is clear that reforms have improved the economic environment for entrepreneurs. Yet, the issue of land acquisition in the name of promoting industrialisation or special economic zones (SEZs), shows how deeply entrenched the sense of political patronage continues to be in the influential sections of Indian society.

Nothing else can explain the desire of so many Indian business houses to ask the government to procure land for their projects. Since these businessmen have been the biggest beneficiary of liberalisation of the capital market, one could have expected them to demand a similar liberalisation of the land market in the country.

If businesses cannot legitimately acquire the necessary land for their purposes, then it is the land market that needs to be reformed. Instead, they have sought to eliminate the land market completely by asking the government to act as the middleman and perpetuate the land mafia.
Similarly, the opinion among social activists range from those who want land to perpetually remain under agriculture or forests, to others who focus more on an adequate rehabilitation and compensation package. Despite their concern for the poor, most of them fail to realise that property rights is not a luxury of the rich, but a necessity for the poor. The rich can survive in most societies, irrespective of their legal rights, because with their wealth they can buy protection from the powers that be. It is the poor who are left most vulnerable if they are denied the right, because they have no other recourse, except to become political pawns.

Economist Hernando de Soto, among others, has shown that the poor are trapped in poverty primarily because of their inability to capitalise on their assets, including land.

Today, Indian businesses can raise capital freely at home and abroad, they can buy and sell assets, engage in mega mergers and acquisitions. Yet, most Indian farmers hardly enjoy the freedom to buy, sell, lease or rent land. In most parts of India, farm land is regulated under land ceiling and land usage laws. In addition, laws make it difficult to even change crop patterns, and restrict the movement of agricultural produce.

The astronomical rise of real estate prices in urban India is also a reflection of the rigidities that have hobbled our cities. Rent control, land ceiling and zoning, coupled with weak legal avenues for the enforcement of contracts, have all made land in urban India artificially scarce. All — the land mafia, politicians, bureaucrats and businesses — have benefited, except the land owner himself.

Indians have been slowly, but steadily, surrendering the most fundamental of rights — the right to property — from almost the very inception of the Republic. Jawaharlal Nehru began the process with the creation of the Ninth Schedule in 1951, in an attempt to put land acquisition beyond the purview of judicial review. With her populist nationalisation, Indira Gandhi greatly diluted the scope of property rights protections. The first non-Congress government took one more step. In 1978, it amended the Constitution such that property rights no longer remained a fundamental right. Except a few brave voices, hardly anyone mourned the demise of the individual’s right to property.

The law is quite distinct from legislation. It is easy to write legislation that violates the spirit of the law as commonly understood. So the State passed legislations undermining basic principles of law in the name of helping the poor. First, land was sought to be confiscated from big landlords and redistributed to the poor. And now, the same land is being forcefully acquired through the use of eminent domain from the poor to be given over to large private investors.

Once a fundamental legal principle, that of property rights, is sacrificed, ‘might’ becomes right, and people are left vulnerable to the coercive power of the State. Since the communists in West Bengal lay their first claim to legitimacy on rural land distribution in the name of the landless, it is not surprising that they are now caught between a rock and a hard place as they try to facilitate land acquisition for the sake of industrialisation.

Yet, in the past two decades, there has been a steady and growing demand for greater recognition of private property rights in one form or another. Twenty years ago, at the height of the agitation against the Narmada dam, the issue was polarised between whether to build the dam, and the quality of the rehabilitation package for the people who lost their property. In the last few years, the tribal rights debate brought to the fore the issue of securing property rights for forest dwellers.

The violence over land acquisition in Orissa’s Kalinganagar two years ago, and the recent tragedy in Nandigram in West Bengal, mark more milestones on the long road to property rights. A couple of months ago, ministers in the West Bengal government asserted that under the land acquisition laws, consent of the landowner was not required. They would then go on to highlight the compensation and rehabilitation packages. The law remains the same, but the protests in Singur and Nandigram have forced the state government to announce that no land will be acquired without consent.

A similar sentiment at the grassroots in urban India, following the demolitions and sealing drives is forcing the political establishment to recognise the potential political cost of the violation of property rights.

A momentum seems to be building from the grassroots. Property rights could be an issue that unites Bharat and India, the poor and the rich alike. The time seems ripe for a people’s campaign for the restoration of the right to property as a fundamental right. This would empower the people and unleash the much-needed second generation reforms by including all sections of society into the growth path. The tragedy at Nandigram will not be wasted if the country joins hands for a campaign to restore property rights.