The transition cannot take place if India’s farming-dependant population is given the choice to remain in rural hinterlands and practice agriculture

India should abandon its agrarian roots and rapidly make the transition to a manufacturing and services-based economy where the majority of the population would live in cities. Photo: HT

Until January 2014, when the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLA) came into force, Indian farmers were at the mercy of the colonial era Land Acquisition Act, 1894. Under the older law, the state could forcibly acquire private land under a vaguely defined pretext of public purpose and while the land loser could go to court over rates of compensation, there was no question of her refusing to part with the land under any circumstances, and the law did not leave any scope for democratic consultation with or participation of those whose lands were being taken over.
Most of independent India’s big projects were executed under the auspices of this law. Today, nobody can deny the state has failed repeatedly and miserably to rehabilitate the vast majority of those displaced by development projects. Just picking at random: farmers displaced by the Tehri project have still not been rehabilitated; farmers displaced by the Sardar Sarovar Project on the Narmada dam have still not been resettled; farmers displaced by the dozens of special economic zones (SEZs) have still not been resettled.
Acknowledging India’s woeful record in rehabilitating project-affected peoples, a December 2013 parliamentary note circulated for the reference of Lok Sabha members said, “Between 60 and 65 million people are estimated to have been displaced in India since Independence, the highest number of people uprooted for development projects in the world.”
Yet, there are intelligent people who want farmers to believe the two pillars of any meaningful participation in harnessing land resources for development—informed consent and social impact assessment (SIA)—are no big deal.
In fact, India has already experimented with a model of consent-proof and SIA-proof land acquisition for so-called development: the SEZs. The SEZ Act was passed by the United Progressive Alliance (UPA) regime in 2006 and resulted in a series of mass agitations, from Nandigram in West Bengal to Raigad in Maharashtra, against the forcible acquisition of farm land for industry.
Today, 10 years later, we have evidence of what the land acquisition for SEZs has achieved. Two findings stand out from the SEZ audit carried out by the Comptroller and Auditor General (CAG) of India. One, land acquired for industry for the ostensible purpose of setting up manufacturing facilities and generating jobs were diverted to real estate projects for making a quick buck. Two, private industry mortgaged government land for thousands of crores worth of bank loans. As per the CAG report, most of the SEZs were big flops, failing to meet the projected targets in both export revenue as well as job creation.
Clearly, recycling the same old arguments today that were trotted out for the SEZ Act 10 years ago is unlikely to impress the farmers agitating against the National Democratic Alliance (NDA) government’s amendments to the new land acquisition act. Of all the misleading arguments, the most patently ridiculous is the promise of employment. Batting for industry over agriculture may have other economic benefits, such as increasing the rate of capital accumulation, generating more employment is not one of them.
Let us consider this for a moment.
Right now, agriculture’s share in India’s gross domestic product (GDP) is only 13.9%. But it accounts for 50% of national employment. Industry, which contributes 21.5% to the GDP, accounts for a mere 20% of employment. The services sector, which, at 65%, is the largest contributor to the GDP, employs only 31% of the workforce.
If we are talking about employment generation, no sector can match agriculture in terms of the people employed per percentage of GDP output. In other words, the argument that farmers should accede to forcible acquisition of their land in exchange for jobs is bunkum. That it is bunkum is also evident from the history of industrial capitalism.
When England, in the early days of the industrial revolution, forcibly evicted farmers from the agricultural commons through the Enclosures Acts, it could absorb only a fraction of the displaced population in its mills and factories, where the erstwhile farmers experienced a dramatic decline in their quality of life from what they were used to. The rest of the dispossessed peasantry were packed off to colonies in Australia, South Africa and North America, where they there found new lands to farm, often at the expense of the natives.
India has no colonial territories where it could dispatch those it wants to wean off the agricultural economy. While the minority of those who actually own farmland may live off the monetary compensation for a time, or start a small business, the vast majority of the rural workforce would be forced to migrate to urban locations in search of insecure, exploitative, low-end employment, such as construction work, domestic work, as security guards, etc.
I have written elsewhere about how in a capitalist democracy, democracy will be forced to work within the limits imposed by capitalism. The two clauses of the new land acquisition law that are at the heart of the current tussle—the consent clause and SIA requirement—are thus a dangerous excess of democracy that could derail the smooth operation of capital accumulation that the land acquisition process is meant to facilitate.
This brings us to the real reason why this legislation is so critical for investors and has been built up as the litmus test of the new regime’s intent on economic reforms. This amendment bill is necessary to facilitate absorption of capital surplus through large-scale urbanization.
If the NDA government sticks to its guns and manages to push through its amendments, India would basically have an updated version of the colonial era land acquisition law of 1894, fully equipped to engineer what the economic geographer David Harvey called accumulation through dispossession. The capital accumulated—through transfer of land assets from the poor many to the rich few—would then be absorbed in the expansion of cities, construction of urban and rural infrastructure, and further concentration of capital in fewer hands before capital finds itself hitting another limit, creating a new crisis that can again be resolved only through another round of creative destruction. The mid-20th century debt-financed sub-urbanization of America is one example of such surplus absorption. A more recent one is the massive urbanization of China, which has come about at the cost of forcibly displacing more than 250 million people from their land. China is not a democracy and could therefore take over any land by executive fiat, and yet, there were massive protests.
For the past couple of decades, it is China’s relentless urbanization that has infused a modicum of stability into a crisis-prone global capitalism. Now, with the China growth story showing signs of stalling, the pressure is mounting on India to step up to the plate.
At a time when people in the developed world are waking up to the importance of food security and the rising threats to food sovereignty posed by climate change and desertification, India’s economic mavens are hell-bent on systematically destroying its biggest asset—agriculture and food sovereignty. And they have been succeeding, as the quarter million farmer suicides over the past two decades testify. A law that legalizes forcible dispossession of their lands is the coup de grace of this ongoing war on India’s peasantry and food security. And food security, which is another limit-defining clause (to do with the acquisition of multi-crop farm land) in the existing RFCTLA, is not merely about welfarism for the poor—in the context of climate change, it has strategic and national security implications as well.
To sum up, in the scheme of things envisaged by the advocates of the amended land bill, India should abandon its agrarian roots and rapidly make the transition to a manufacturing and services-based economy where the majority of the population would live in cities.
This transition cannot take place if India’s vast farming-dependant population is given the choice to remain in the rural hinterlands and practice agriculture. Such a democratic choice can be granted only under the condition that it is not exercised. So, both the consent clause and the SIA can be a part of the land bill, provided they do not disrupt business as usual. So, while farmers are certainly not idiots, democracy would be more manageable if only they were.