New Gujarat amendments to land laws will increase already unbridgeable economic disparities, exacerbate social unrest

farmersBy Persis Ginwalla* and Sagar Rabari**

The proposed amendments to the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RTFCLARR) Act, 2013 have been allowed to lapse, for now at least, thanks entirely to the nation-wide agitations and demonstrations against it. Having had to let the anti-farmer Land Bill lapse in parliament, the government tried to paint this move as evidence of its pro-farmer orientation. The entire opposition, meanwhile, claimed victory and evidence of its pro-farmer orientation! It is time this debate is settled once and for all.

The ideological nebulousness which every political outfit dons today affords them the flexibility to mouth pro-people rhetoric while diligently pursuing anti-people legislations. The Land Bill 2014 is one case in point. For another, the Rajasthan Government has passed amendments to the labour laws which the central government copied and passed. Nothing in the amended laws is pro-labour (as the recent report and debate on NDTV India has revealed) yet the rhetoric of them being pro-people is mouthed.

Having let the Land Bill lapse, the government allowed the states to frame their land laws. The Government of Gujarat (GoG) has decided to follow this dictum. It has begun the process by amending some existing laws. Most state governments have initiated this process in one way or another (Neogi, September 2015). This is an even more serious issue that needs to be understood for all its implications and ramifications.

The Gujarat Assembly has, recently (August 2015), passed some controversial amendments to 4 existing legislations, viz.

  • The Gujarat Agricultural Lands Ceiling Act, 1960
  • The Gujarat Tenancy and Agricultural Lands Act, 1948
  • The Saurashtra Gharkhed, Tenancy Settlement and Agricultural Lands Ordinance, 1949
  • The Gujarat Tenancy and Agricultural Lands (Vidarbha Region and Kutch Area) Act, 1958

The thrust of all amendments in these 4 legislations is to make transfer of land to industry and industrialists as easy as possible and at minimum cost to the purchasing industry/industrialist. We look at these amendments in detail.

Agricultural Lands Ceiling Act, 1960

The rationale for the introduction of land ceiling was to end the monopoly on land ownership enjoyed by a few, and to redistribute this resource for more equitable society. It was ultimately a move aimed at socio-economic transformation in a then predominantly poor and iniquitous society/polity.

The easing of restrictions on land ownership were started way back in 1997 when the 8 km. restriction (The restriction whereby an agriculturist could not purchase/own land beyond 8 kms. of his/her place of residence) on the ownership of land was lifted. This opened the floodgate to speculative land market in the state.

The amendments introduced in the August 2015 Assembly session to The Agricultural Lands Ceiling Act, 1960

  1. It introduces a change in the preamble to the Act, wherein the words “for ensuring the full and efficient use thereof” are to be substituted with the words “or for the allotment for industrial purpose or for the development thereof or for any public purpose”.

This implies that the mandate of the Act itself undergoes a change. Whereas, earlier the mandate for the government was to ensure that the lands vested in the government, under the provisions of the Act, were to be made full and efficient use of, through redistribution among landless or small/marginal farmers, this amendment does away with this restriction while bringing industry and ‘any other public purpose’ under its ambit. The reason for doing this, as per the Statement of Objects and Reasons, is “rapid industrialisation and urbanisation”. However, why urbanisation or industrialisation should be made to apply to agricultural lands, and why such land should be made available to industry or for purpose of urbanisation is not made clear.

Further, considering the problem with the definition of ‘public purpose’, what will constitute ‘public purpose’ for the purpose of this Act is also not spelt out. It will be left for the Minister, Secretary, Collector, Mamlatdar to clarify – as per their understanding. This affords too much latitude in the interpretation of the law.

When the task of land redistribution is as yet unfinished, this abrupt and unilateral change in the rationale may be seen as being against the constitutional mandate of ensuring equality and dignity to every citizen.

Blanket use of agricultural land for industrialisation, without attention to the proposed industry’s environmental impact and its capacity for job creation is not conducive to development in any sense of the term. As past experience shows, it is only ensures deprivation and impoverishment.

  1. In keeping with the change in the preamble, the second amendment in the Act explicitly states the two changed purposes for which land may be given/sold, after payment of occupancy price, viz. for “any urban local body, for public purpose, when the land is situated within the areas of such local body” and “any person, for industrial purpose or for the purpose of development thereof, when the land is situated outside the areas of the urban local body”.

This amendment makes it possible for the government to allocate such unutilised land (taken under the Land Ceiling Act), falling within municipal limits, to urban local body, which in turn can sell the same to individuals and/or corporates.

The purpose of the Land Ceiling Act was definitely to divest the large landholders of their vast lands, but in the interests of equity. Hence the same lands had to be allocated to landless or small and marginal farmers. This task the government never completed. With urbanisation, these unutilised lands remain vacant and have appreciated manifold in value. The government is turning an asset of someone’s holding (the erstwhile landowner) into a tradeable commodity in the open market from which to either earn huge revenue for itself, or enable some ‘favoured’ industrialists to earn landslide profits without doing anything. This is hardly equality or equity.

This leads us to question the logic of retaining ceiling on agricultural land holding (we reiterate that Ceiling Laws are needed and are to be upheld). Some people, by virtue of them being agriculturists are governed by the limits on land holding, while those who are not (industrialists) are not. This again, is neither equal nor equitable.

But a more pertinent question here is what about the right of the erstwhile owner of the land? If the land is not used for the purpose for which it was meant then why it should not be returned to the original owner?

  1. No doubt, the purchasing party, irrespective of his/her status as an agriculturalist, has to “make available equivalent quantum of agricultural land in the nearby vicinity … which shall vest in the State Government, free from all encumbrances”. There are two misgivings that this clause arouses: firstly, the phrase “in the nearby vicinity” is vague and can be made to mean anything, and hence can be rendered useless. Secondly, the value of land within city limits and the price of land outside city limits, even if it is an equivalent quantum, cannot be compared.
  1. The next amendment is particularly problematic from the point of view of the constitutional guarantee of ‘right to justice’. It stipulates that “(t)he land so vested in the State Government under sub-section (5) shall be deemed to have been vested under section 21 and 26, under which the land to be allotted was originally vested in the State Government …”. This means that all the earlier claims and counter claims as yet pending in the court of law would be deemed to have lapsed, and the land thus being given to the state government would be “without encumbrances”. The claims of the aggrieved parties, which have been delayed in the courts, would thus be voided. The essential point here is not whether the claims of the original landowners against ceiling are justified; however, that any aggrieved person has a right to justice is an established principle of law and nullifying that principle is not only unconstitutional, but sets a dangerous precedent.

This could be aimed at securing the financial investments of ‘influential persons’ who had (illegally) purchased such land and who are currently facing litigation. By giving away such land entangled in the courts in return for unencumbered old tenure land in the urban limits is nothing but a jackpot!! This is a land scam, nothing more, nothing less.

  1. The final amendment stipulates that “… any land allotted either under clause (v) or (vi) of sub-section (1) of section 29, to any urban local body or any person respectively shall be of old tenure”. All lands given under tenancy Act, Ceiling Act and Bhoodan lands were subject to ‘new tenure’ land regulations. These could not be sold, mortgaged or gifted, nor could they be used for non-agricultural purposes without prior permission. The rationale behind this was to safeguard the asset from economic enticements. While such land may not have enriched the recipients, it certainly kept them from destitution and starvation. This amendment removes this safeguard and brings this valuable asset within the ambit of the ‘land market’. Moreover, automatic conversion to ‘old tenure’ means that the premium amount for conversion is no longer payable, thus depriving the state of this revenue. Can this be construed as yet another ‘subsidy’ to industry in the name of ‘growth’ and ‘development’?

Again, as earlier, this amendment is aimed at regularising the land purchases of ‘influential persons’ which, because of the safeguard could not be officially sold or regularised on paper. Or else to exchange the cheaper land parcels outside urban limits for valuable land parcels within urban limits.

The Agricultural Land Tenancy Laws

Gujarat is governed by three laws in this regard, and to which amendments were made in the recently concluded Assembly session:

  • The Gujarat Tenancy and Agricultural Lands Act, 1948
  • The Saurashtra Gharkhed, Tenancy Settlement and Agricultural Lands Ordinance, 1949
  • The Gujarat Tenancy and Agricultural Lands (Vidarbha Region and Kutch Area) Act, 1958

The Statement of Objects and Reasons to the Amendment Bill states the reason for introducing the amendments: “The said Acts have been enacted about more than sixty years ago and with the rapid industrialisation and urbanisation, it is considered necessary to amend and insert certain provisions in the said Acts in order to make the procedural parts of the Acts more simple and to mitigate the undue hardships the people have to suffer” (emphasis added). We will now examine how the law is simplified, for whom the simplifications are intended, and what benefit it will bring them!!!

Equity shares in lieu of sale price of land

A provision in all these Acts now states that “where land is sold for bonafide industrial purpose, the purchase of such land, if it is a company may offer the equity shares of such company in lieu of sale price of such land to the person by whom such land is being sold and if such person agrees to accept such equity shares either in full or partly then it shall be obligatory on the part of such company to allot such shares”.

Before we consider the pros and cons of the suggested change, more clarity is needed on: how does “industrial purpose” become a bonafide purpose under Agricultural Land Tenancy Act? It has not been declared as such by any amendment earlier. As such, it militates against the rationale of the tenancy laws.

As per the amendment, the farmer/land owner is free to accept (or reject) full or part payment through shares of the purchasing company. But it is also well-known that more companies report bankruptcy than profits (many companies signing MoUs at the VGGIS, as per news reports, do not even have registered addresses). What happens when a company reports losses? Does the erstwhile land owner, now a shareholder, become liable for the losses as well? In which case he/she would lose not only land, but also monetary realisation thereof, while being beset with fresh liabilities, not of his/her making. There is no safeguard against this. IS THIS GoG’s VERSION OF SIMPLIFYING THE LAWS? Is this, by any stretch of imagination, pro-farmer?

Raising the time limit for commencing production – from 5 to 10 years

It is proposed to “raise the time limit for commencing the production from five years to seven years” and by another three years upon payment of fifty per cent of the prevailing Jantri value. In total, therefore, the purchasing industrialist has been given a period of 10 years in which to put up his/her industrial unit. The basic principle of business is to speed up production in order to realise profits on investment made. Which industrialist, and why, would want to delay production for 10 year? IS THIS GoG’s VERSION OF SIMPLIFYING THE LAWS? This amendment also contravenes the RTFCLARR Act 2013 where the time limit is fixed at 5 years upon which the land is to revert back to the original owner or to the Land Bank of the state.

Another provision enables the purchaser of the land for industrial purpose and who “fails to commence the production of goods or providing of services” after a period of three years (i.e. before the expiry of the time limit) seek permission from the Collector for sale or transfer of such land. Of course, on payment of different rates of prevailing Jatri value at different intervals. HOW DOES THIS PROVISION SIMPLIFY THE LAND TENANCY ACT? This is, on the contrary, rewarding the failure of the purchasing industrialist with yet another sop. Also, who will receive the additional Jantri value is not made clear; will it be the Collector or the erstwhile owner of the land? How many times can such land be thus sold or transferred?

Such land can then be sold and enters the open market. Is this simplifying the LAND TENANCY ACT or FACILITATING EASE OF ‘BUSINESS’ ACT? What the RTFCLARR Act forbids, these Acts facilitate through the backdoor and in the name of the tenant farmer, no less.

The most appalling of the amendments is this: “where the Collector … comes to the conclusion that the purchaser has failed to commence production of goods or providing of services within the period as specified … the land shall vest in the State Government free from all encumbrances on payment to the purchaser of such compensation as the State Government may determine and such land shall be disposed of by the State Government in the manner as may be prescribed”. Not only was the rogue industrialist rewarded with permission to sell the land, now it also empowers the Collector to determine the cost incurred by the industrialist in failing to use the land, and to pay such compensation to him/her! The government is also, by law, making it mandatory for itself to ‘rescue’ a rogue industrialist who fails in his/her undertaking to put up an industry and to compensate him/her ‘adequately and appropriately’. Any such industrialist can claim compensation and still file a law suit against the government claiming that the compensation paid was not ‘adequate’.

So divert the agricultural land for industry, reward the industrialist with permission to sell the land (so far not possible), pay him/her compensation for their failure to put up industry. Everything that is not allowed under the RTFCLARR Act is being allowed here. This way the agricultural lands go out of the hands of the agriculturists to politicians/industrialists, and the money from the state treasury also goes into the hands of the same politicians/industrialists. WHO BENEFITS? FOR WHOM ARE THESE SIMPLIFICATIONS INTENDED? It is a no-brainer.

In this light, what are we to make of the government’s claim that the private sector is the most efficient medium for growth and development? We can also be sure of the response (if they even bother to respond) of the government to our contention: “These will be exceptions but we need to make laws”. Are laws to be made for exceptions? Are exceptions being made the rule here?

The government has been claiming that it does not have the resources for opening more schools, PHCs, appointing teachers/lecturers. How will the government get the resources for rescuing the errant industrialists? The industrialists would indeed be stupid not to invest in Gujarat (to borrow Ratan Tata’s phrase).

Validating earlier invalid transactions

The amendments seek to validate all such transactions, whether individual or institutional, (sale/purchase of agricultural land) which were so far, under law, invalid, as on June 30 2015 (invalid in cases where the interim sellers and buyers were not agriculturist as required by law). The power for instituting an inquiry to ascertain this and deciding on the case vests in the Mamlatdar. The only penalty: payment of 10% of the prevailing Jantri value. All such land sharks who had carried out land deals in contravention of the law should be very happy. Their deals are about to be made legal. Not only that, the agricultural land (new tenure) can also be converted into old tenure land upon payment of prevailing Jantri value.

Not only that, pending legal cases are also to be deemed to have lapsed, bringing into question whether the phrase ‘rule of law’ holds meaning any longer. Moreover, while deciding legality/validity or otherwise of questionable transactions, the government official (Collector/Mamlatdar) have been granted arbitrary powers of the highest degree.

All of this, the Statement of Objects and Reasons mentions, is to “protect the interests of an agriculturist…”!

Implications of the changes

The “benefits” of “simplification” of the laws are heavily tilted in favour of the purchasing industry/industrialist. They are not in favour of the seller of the lands. How are the amendments, then, serving the purpose for which the laws were made in the first place? If that is the case, and the laws are an impediment for ‘growth’, then should not such laws be repealed? But that would not get them votes, over and above causing ‘internal threats’. Hence, malafide intentions are sought to be converted into bonafide pursuits!

These amendments are wholly anti-people and completely unconstitutional. The GoG or the ruling party cannot, any more, claim to be pro-farmer or pro-poor, as these amendments expose its anti-farmer mindset.

Past experience also shows that such amendments are not geared to spur ‘development’ at all; they only end up increasing the already unbridgeable economic disparities thus exacerbating social unrest. This is not INCLUSIVE DEVELOPMENT, which the GoG and the GoI claim to be pursuing.

*Development sector professional and an activist with Jameen Adhikar Andolan Gujarat (JAAG), Ahmedabad. **Activist associated with the land rights struggles in Gujarat and India and is Secretary, Khedut Samaj – Gujarat, Ahmedabad

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