The only plausible interpretation of the actions by Congress in the last several months is that it has adopted this scorched earth strategy as it retreats from government. Its recent actions seem to serve one principal purpose: make the restoration of growth and the task of rebuilding the nation as difficult as possible for the successor government.
The greater the failure of the successor government, the better would the outgoing government look by comparison. Ironically, the most pernicious act of the Congress-led United Progressive Alliance (UPA) government is related directly to land: the new land acquisition act.
The latter administers an all-round preemptive blow to efforts of a future government to put India back on its feet. For most public projects, the act makes land acquisition such a long-drawn-out affair and land prices so high that only a handful of projects will remain economically viable and capable of being implemented.
A recent report in this newspaper has this to say about the act: “The new land acquisition law that came into force this January, touted as one of the signal achievements of the UPA government, is turning into a major obstacle in the way of a key infrastructure project being pushed keenly by the Prime Minister’s Office.
The government is now back to the drawing board to figure how the project can be made viable. Even building rural roads under Pradhan Mantri’s Gram Sadak Yojana (PMGSY), a programme expressly meant to aid India’s rural poor, will turn into a nightmare.
And this will be in the name of protecting ‘poor’ landowners, notwithstanding the fact that land reform has had little success in India. Except in a handful of states, much of the land is actually owned by large and wealthy farmers.
The new land acquisition act will also make already hard to implement large-scale private projects yet harder to implement. All the provisions of the new act on compensation apply to all private acquisitions of 50 acres of land in urban and 100 acres in rural areas.
According to some calculations, this would render land an order of magnitude more expensive in almost all locations in India than in any other country on the face of the earth. This is why entrepreneurs looking for land will first look on Mars before doing so in India. Rarely has a democratic government consciously inflicted such damage on the nation at its exit.
(Source: Extract from an article by Arvind Panagariya in the Times of India, Dated 11-03-2014 –The Writer is professor of Indian political economy at Columbia University)
