Intro: Land Acquisition Bill and GST are laws that are going to change the outlook of India in near future. The challenge that these Bills face is to balance the benefit to the common man with the cost to industry.
In 1841, the British Prime Minister Lord Derby said in the House of Commons “The duty of an opposition is very simple; to oppose everything and propose nothing”. This holds true in today’s political situation in India.
The Bengal Resolution of 1824 was the first such land acquisition legislation enacted by the British government and in later years the politics of land continued in swing with the Bill being continuously reformed and modified in accordance with the economic roadmap planned by the incumbent government at the centre. In 2013, the UPA-II government enacted the so called historic legislation which was termed “pro-farmers” and the Bharatiya Janata Party (BJP) supported the UPA government’s legislation. The present much hyped deliberation on the issue of new Land Acquisition Bill and GST has simply reduced the debate into petty “prestige war” with Opposition opposing it and resulting in “policy paralysis”.
The Right to Fair Compensation and Transparency bill has kicked up a storm. Now, the Modi government is keen to make amendments to the Bill for realisation of pet project ‘Make in India’ which will attract foreign investors and in a way reform the Indian economy.
According to an HSBC Global Research around a third of the top 100 stalled projects which make up around 93 per cent of all stalled projects in the CMIE (Centre for Monitoring Indian Economy) records are stuck due to land acquisition issues. According to the ministry of finance estimates, the stock of these stalled projects amounts to Rs 18 trillion and that more than half of these are from the infrastructure sector. Thus the NDA government will have to find a middle ground where the farmers have a regular source of livelihood and share in good governance.
Through the populist and so called “pro-farmer” UPA-II legislation, the UPA government went on pursuing farmers but the general elections verdict proved that it did not impress the farmers, at last “Ye Public hai sab jaanti hai”. People were fed up with policy paralysis, in-efficient governance, acute corruption and unemployment. Hence to bring in societal inclusiveness and development people voted for the BJP government.
Mahatma Gandhi National Rural Employment Gurantee Act (MGNREGA) has become popular and the Modi government continues to support it. Therefore, to say that the government is pro-capitalists and not pro-farmer is patently imprecise. The most urgent reform needed today for growth and development therefore is the fresh amendments in the Land Bill.
Superpower China follows the 1999 enacted land acquisition law which allows it to take any land without approval from the owner and the result of which is quite evident. At present around 49 per cent of Indian population is involved in agriculture and hence often it’s termed as “Agrarian Economy” and in return it contributes only 13.7 per cent of India’s total GDP.
India is contemplated to have a sturdy economy but inert India is lingering far behind its competitors. The problem is quite clear. In India the government is on the whims of their coalition partners and Opposition and this has led to acute policy paralysis in recent years. Political decisiveness has a major effect on the economy of the country. For example, if China wants to build a rail network, it will find way through forest and villages in its course but in India, any projects faces a number of impediments like land acquisition, stringent labour laws, hoards of regulation by the
environmental ministry and red tapism. This has led to adverse
business environment in the country well reflected in the ‘ease of doing business’ index by World Bank placing India at a rank of 134, a well below china having a rank of 96.
The Congress mega Kisaan rally proclaiming that the new ordinance is anti-farmer should know that the UPA-II Land Acquisition Act which the Modi government is trying to amend in fact failed virtually across the spectrum. Industry was extremely disappointed and interestingly the Congress Chief Ministers had also written to then Prime Minister of India Dr. Manmohan Singh, complaining that it was unfair to people and development.
In the wake of all this, the main utility of the present Land Acquisition bill is that it guarantees neutrality and fair dealing with farmers as clear norms on the process of acquiring land and rule for compensation packages will ensure that the process of land acquisition is transparent. The existing Act has kept 13 most frequently used acts for land acquisition for Central Government Projects out of the purview. These acts are applicable for national highways, metro rail, atomic energy projects, electricity related projects, etc. The present amendments bring all those exempted from the 13 acts under the purview of this Act for the purpose of compensation, rehabilitation and resettlement. Therefore, the amendment benefits farmers and affected families in a larger context. Second, the proposed changes in the Land Acquisition Act would allow a fast track process for defence and defence production, rural infrastructure including electrification, affordable housing, industrial corridors and infrastructure projects including projects taken up under Public Private Partnership (PPP) model where ownership of the land continues to be vested with the government. Third , as per the changes brought in the Ordinance, multi-crop irrigated land can also be acquired for purposes like national security, defence, rural infrastructure including electrification, industrial corridors and building social infrastructure. The new Land Acquisition Bill promises four times the market price of the land; Job to family who gives up land; including, 1/5th of developed land to be returned back to the farmers.
Similarly, another prestige war is on the issue of Goods and Service Tax (GST). It is a value added tax which is levied on both goods and services, and which will replace all other indirect taxes which are currently in place. The GST is a long pending indirect tax reform which India has been waiting for, and which is hoped to iron out the wrinkles in the existing tax system. But due to political alignment it has been pending for its enactment.
GST can boost the Indian economy as well as it can prove to be a game changer for the common man, as it provides-
- Simpler tax structure: As multiple taxes on a product or service are eliminated and a single tax comes into place it will lead to reduction in accounting complexities for businesses. Experts opine that the implementation of GST would push up GDP by 1 per cent to 2.5 per cent.
- Increased tax revenues to the Government: A recent report by Credit Rating Information Services of India Limited states that GST is the country’s best bet to improve the fiscal health of the country. Hence GST can prove to be a game changer for the Indian economy.
- Competitive pricing and boost in export sector: GST will eliminate all other forms of indirect taxing. This will effectively mean that the tax paid by the final consumer will come down in most cases. Lower prices will help in boosting consumption, which is again beneficial to companies.
If implemented, GST is clearly a long term strategy; it would lead to a higher output, more employment opportunities, and economic inclusion of the country in long run.
Himadrish Suwan (The writer is recipient of the International Association of Educators for World Peace Global Award for Media & Information Activism 2014)