Even before it is officially signed into law by President Pranab Mukherjee, Sonia Gandhi’s pet project, the Land Acquisition Bill, is set to yield unprecedented windfall gains to the corporates, industrialists, and big builders who had the ‘vision’ and deep pockets to invest in huge land banks in the guise of Special Economic Zones (SEZs) under UPA I. Between April 2007 and October 2009, the Congress Government in Haryana alone acquired over 1,452 acres of land from farmers, mostly in the boom towns of Gurgaon and Faridabad, ostensibly for 35 SEZ projects.
Now, as UPA II prepares to bow out of office, the National Advisory Council chairperson has delivered her bonanza legislation at the cost of poor and marginal farmers; SEZ projects that never got off the ground are set to be converted to realty projects by an obliging regime.
This may well be repeated in other Congress-ruled States where SEZs were notified, ostensibly to promote industry and growth. But when they failed to take off, instead of cancelling the projects and taking back the land, or ordering its return to farmers (the methodology of which needs to be hammered out nationwide), the Government allowed the investors (mainly builders and developers) to squat on the land (as happened in the coal sector). They in turn waited for suitable passage of time before seeking conversion of land use to realty projects, where profits will be in algebraic proportion to investment.
This in precisely why farmers’ bodies had opposed the Land Acquisition Bill and its provision for State takeover of land for the private sector. In the extant cases, the land was taken from farmers on the pretext that a “public purpose” was being served; yet what is happening is State-facilitated windfall profits for the private sector, with no commensurate compensation to deprived farmers.
A colossal 22 out of 35 SEZ projects in Haryana are set to be converted into residential and commercial properties. This indicates that the SEZ concept is a failure, which the State Government should reconsider in totality. Instead, it is permitting large corporate houses such as Uppal Housing, Ansal Properties & Infrastructure, Parsvnath Developers, Raheja Haryana SEZ Developers and Ascendant Estates, amongst others, to make huge unearned gains in the form of shopping malls, multiplexes, and housing and industrial housing colonies.
As early as May 2009, the Export Promotion Council for Export Oriented Units (EOUs) and SEZs said realty major DLF could be allowed to denotify four of its special economic zones (in Haryana, Gujarat, Orissa and Kolkata) if it refunded the duty-free benefits claimed. This means that at least five years ago, the Government knew that the SEZ concept was failing, but did nothing about restoring the land to agricultural use.
In August 2011, Airmid Developers Ltd sought denotification of its SEZ unit in Gurgaon on grounds of uncertainty regarding taxability of the project, and received a ‘No Due’ certificate from the State Government. The firm was supposed to set up an IT/ITes SEZ project at village Pawala, Khusropur, Gurgaon, and employ 50,000 people. In May 2012, Ansal SEZ Projects sought denotification of its IT/ITES SEZ in Gurgaon, after the Centre’s decision to impose minimum alternate tax, divided distribution tax; it also cited the global economic meltdown.
In June 2013, the Board of Approval headed by Union Commerce Secretary SR Rao denotified the IT/ITES SEZ of real estate major Parsvnath Infra Ltd after it cited problems in acquiring contiguous pockets of land in Sohna, Haryana. The Board allowed Reliance Industries to surrender its special economic zone in Haryana, though no reasons were cited for this request. The Reliance Haryana SEZ Ltd, a sector specific SEZ for multi services at villages Mohammadpur Jharsa, Gharauli Khurd, Khandsa and Harasru, District Gurgaon, was notified over an area of 440.71 hectares.
Prior to the monsoon session of Parliament, real estate markets in Haryana began to buzz with news that notified SEZs would receive a “one-time opportunity” to convert to industrial colony licences. It was reported that builders would get an additional bonanza in the form of relaxed norms whereby they could reserve 15 per cent plotting for residential areas in the industrial colony, as opposed to the existing 10 per cent. Three per cent of the housing is to be reserved for labour.
As on August 30, 2013, the Union Government has approved denotification of six SEZ projects, including one textile sector and five IT sector, in different parts of the country. The rapid denotification of SEZs as a prelude to, and consequence of, the recently passed Land Acquisition Bill raises questions about the intent of the legislation. Can SEZs notified in future, anywhere in the country, also be easily converted to housing or commercial projects? Why is the old policy of the State Government maintaining the SEZ and giving each industry only as much land as it needs being revived?
It would be in the fitness of things for the Supreme Court to take up the matter suo moto and examine the fairness of farmers losing land to projects that never come up, after which change of land use gives virtually unquantifiable profits to developers with deep pockets and a capacity to squat on land for five to ten years.
It is pertinent that in July this year, the Supreme Court asked Tata Motors to clarify its position vis-à-vis its leasehold rights over the Singur land as the company had moved its car plant out of West Bengal, to Gujarat. Justices HL Dattu and Dipak Misra stated that since the land was acquired to set up a car manufacturing plant at Singur, and that purpose ended with the company moving out, it needed to explain what interest it retained in the said land.
The bench opined that the “land should move back to the agriculturists and we may ask the West Bengal government to file an affidavit on the issue of giving the money back to you which you had paid at the time of land acquisition. In the interests of justice, we think it will serve the purpose”.
What is pertinent here is that the West Bengal Government wanted justice for the farmers. This does not seem to be the case in other States, and so it is for the Supreme Court to step in and do justice for the small farmer who is lacking in economic clout and political patronage. On no account must the argument that the farmers are in no position to return the money paid to them five or seven years ago be allowed to stand in the way of justice being done to them. The State expropriated the farmers; it must be ordered to ensure restitution. And in future, State Governments must guarantee that land not used for the purpose it was acquired shall be returned to the original owners.
Niticentral.com, 8 September 2013