Policy watch March 2007

DCs to verify lands for SEZs

The Union ministry of commerce has asked development commissioners (DC) of special economic zones (SEZs) to physically verify all proposals and find out if the land acquired by developers is vacant and free of legal issues. For this, the ministry has asked DCs to personally meet original landowners and check if they are dissatisfied or have had disputes over land acquisition. It has also asked DCs to certify that the land is in complete possession of developers and is free of encroachment. This comes at a time when there are widespread protests -- many of them violent -- over land acquisition for various SEZs. Meanwhile, in a bid to prevent protests against acquisition of land across the country, the Centre has proposed to amend the Land Acquisition Act, 1894, which will prohibit state governments from acquiring farmland for private parties. After the National Rehabilitation Policy is adopted, SEZ developers will have to negotiate directly with farm owners to acquire land. State governments will only help the private sector acquire wasteland for industrial activities. The Union ministry of rural development has sent a draft Rehabilitation and Resettlement Bill to the Union ministry of law for approval. However, a change in the Land Acquisition Act will require a constitutional amendment.

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States slow down on SEZs

After aggressively pushing for setting up SEZs, many states are now going slow on acquiring land. This move comes following protests by farmers and landowners. The West Bengal government has put all SEZs in the state on hold until a ‘socially balanced’ decision is taken at the national level. West Bengal finance minister Ashim Dasgupta said that large industries must be set up after consultation with people. The compensation should be given in the form of both land and cash, he added. The West Bengal government took the step following the recent violence in Nandigram in East Midnapore district. Recently Orissa also decided not to go ahead with one of its proposed SEZs. There are similar reports from Kerala and Maharashtra as well.

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ADB says SEZ tax sops not necessary

In its latest report Asian Development Outlook 2007, the Asian Development Bank (ADB) says that the Indian government’s tax sops for SEZs are “unnecessary”. “SEZ tax inducements are expensive, and come at a time when the government is struggling to provide adequate infrastructure in the wider economy,” the report observes. The government, according to the National Institute of Public Finance and Policy estimates, is expected to lose about Rs 1,00,000 crore in revenue on account of fiscal concessions to SEZs. The report adds that better infrastructure and greater bureaucratic efficiency in SEZs will be sufficient to stimulate investment from potential investors.

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Jharkhand rehabilitation policy makes local consent mandatory

To overcome problems of land acquisition and local resistance, the Jharkhand government has decided to create joint partnerships between gram sabhas (village councils), village-level administration and industrial developers such as steel plants.
The decision, taken as part of the proposed Jharkhand Resettlement and

Rehabilitation Policy, specifies that consent will have to be taken from villagers in future growth of the state. The policy to make villagers stakeholders in upcoming projects will be approved by the state cabinet within a fortnight, a decision propelled by the troubles faced by the Jharkhand and Chhattisgarh governments in acquiring land.

Under the rehabilitation policy, options will be offered to villagers to take one-time-cash compensations, or exchange 50 per cent of the money for employment to one member of the household. The third option will be to accept 50 per cent of the cash and invest the other half in convertible shares in the company setting up the project. The Jharkhand government has signed nearly 64 memoranda of understanding, worth more than Rs 1.38 lakh crore, with 47 steel plants. But investors in Jharkand have to face a tough reality: they need to secure 30,000 acres of land to set up projects. According to an official, at present, the government has less than 20 per cent of the land needed to parcel out to steel players. Only 12 of the 64 companies have been able to acquire land directly from villagers.

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Demand for inclusion of tribal villagers under the 5th Schedule in Andhra

NGOs in Andhra Pradesh have demanded inclusion of 805 tribal villages under the 5th Schedule of the Constitution that grants special privileges to the scheduled tribe population. For the last 27 years, Andhra Pradesh has not taken any initiative to include villagers under the 5th Schedule while Maharashtra, Bihar and Rajasthan have already listed adivasi villagers under it. The 5th Schedule refers to transferring administrative powers to the Tribal Advisory Council. Samata, an NGO working in the scheduled area of Andhra Pradesh, had filed a case against the Andhra Pradesh government for leasing tribal lands to private mining companies. In a historic judgment in July 1997, the Supreme Court had declared all land leased to private mining companies in scheduled areas as null and void.

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Kerala draft forest policy released

In a bid to stop encroachment in forestland, the Kerala government has released a draft forest policy. The policy envisages surveying the forest areas under the control of the government and demarcating them with cairns and kayyalas (mud walls) on a time-bound basis, using Global Positioning System and other tools. The policy seeks to take up the issue of encroachment at administrative, social and political levels, and by making people aware of the negative impacts and damage due encroachment. It asserts that use of forestlands for non-forestry purposes would be done only under the provisions of the Forest Conservation Act.

The state’s entire forest area will be brought under the forest station system in a phased manner. The number of forest stations will also be increased. The policy says that a major portion of the forests in Kerala is located in the Western Ghats and this area is one of the mega biodiversity hotspots of the world. The natural heritage, which represents the remarkable biodiversity and genetic resources, will be maintained, conserved and augmented. Efforts will be made to put a system of good governance in place in the forest department by codifying and institutionalising the protocols for planning, managing, monitoring and evaluation.

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Bharat Nirman fails to meet target

The United Progressive Alliance (UPA)’s ambitious rural road connectivity programme has failed to meet the target by nearly 54 per cent during the last fiscal (2006-7). As per the target, more than 35,000 km of roads were to be constructed. According to official data, construction of only about 16,300 km of roads was completed during the last fiscal. Out of the Rs 38,569 crore sanctioned under the Pradhan Mantri Gram Sadak Yojana (PMGSY) for 2006-7, work worth only Rs 18,886 crore was completed.

Under Bharat Nirman, the government had initially planned to connect all habitations with a population of 1,000 or more in the plains and 500 in hilly and tribal areas. Nearly 18 states including Bihar, Chhattisgarh and Uttar Pradesh have not been able to achieve the target during 2006-7 while Andhra Pradesh, Gujarat and Punjab have. Jharkhand missed the target under Bharat Nirman by 91 per cent, West Bengal and Madhya Pradesh by 67 per cent and 60 per cent respectively.

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Grameen Tatkal Scheme by NABARD

The National Bank for Agriculture and Rural Development (NABARD) has launched a scheme, which would ensure sanction of loans for rural household within seven days. This move is likely to improve the rural lending system. Titled ‘Grameen Tatkal scheme’, it aims at enhancing banking habits amongst villagers. The scheme was launched recently in Tamil Nadu and will be implemented through 96 Grameen banks in the state.

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Standing committee asks for new BPL list

The parliamentary standing committee on rural development has asked the government to come out with a fresh below poverty line (BPL) list soon. It recommended that the Union ministry of rural development should initiate all desired measures to ensure that the BPL survey for the 11th five-year plan does not meet the same fate as the BPL census for the 10th five-year plan. The committee said that since 2007-08 would be the first year of the 11th plan, the results of the BPL survey should be made available immediately. The committee also expressed “strongest concern” over the decision of the government regarding a cap on the total number of BPL families.

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Has the Accelerated Irrigation Benefit Programme performed?

Recent government reports have caste a doubt over the effectiveness of the Accelerated Irrigation Benefit Programme (AIBP). The Centre and states have spent around Rs 35,600 crore since 1996-97 on the programme, which aims at increasing the irrigation area of the country. Between 1995-96 (before AIBP was launched) and 2003-04 (the last year for which official data is available), the gross irrigated area has risen from 46.5 million hectare (MH) to 49.3 MH for all cereals, from 3 MH to 3.3 MH for pulses and from 3.9 MH to 4 MH for sugarcane. Moreover, even this marginal increase has been offset by declines in respect of oilseeds (from 7.3 MH to 6.5 MH) and cotton (from 3.2 MH to 2.6 MH).

However, the government says it measures the outcome in terms of ‘irrigation potential’ instead of net irrigation area increase. Going by this count, the cumulative figure from 1995-96 to 2005-06 comes to 4.04 MH, with another 0.9 MH estimated to be created this fiscal. All that adds to around 5 MH over a 11-year span.

Now, how does this compare to the pre-AIBP era? Again, official data on actual irrigated area (as against ‘irrigation potential’ created) shows an increase of 7.7 MH in the 1970s and 6.5 MH in the 1980s for cereals alone. The corresponding figures were 1.2 MH and 3.5 MH for oilseeds, 0.5 MH and 1 MH for sugarcane, and 0.7 MH and 0.4 MH for cotton. Interestingly, even between 1990-91 and 1995-96 (pre-launch), an additional 4.2 MH of cereal area came under irrigation. The total net irrigated area during this period rose from 47.78 MH to 53.40 MH and has, since then, hovered around the latter levels.

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