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Real Estate Law
Just compensation: Do Indian SEZ steal from the poor?
posted by Priya Prakash Royal
"The future of the Indian people and Indian democracy rests on the land question. While the Government is forced to pause in its inhuman project of land grab, let the farmers and the democratic forces of the country join in evolving charter and an agenda for land sovereignty." - Dr. Vardana Shiva
A public hearing was convened on Monday, November 5 in New Delhi to discuss Special Economic Zones (SEZ) and land rights. The hearing was sponsored by Navdanya, which began as a program of the Research Foundation for Science, Technology and Ecology (RFSTE) and was founded by world-renowned scientist and environmentalist, Dr. Vandana Shiva. “The largest SEZs were allocated to Mukesh Ambani," said Dr. Shiva, chair of the public hearing. "This is a criminal subsidy the State is giving to the rich by stealing from the poor.” Eminent domain, known as land acquistion in India, is governed by the Land Acquistion Act of 1894. The public hearing resolved that the Act must be amended to ensure that the government does does not acquire land for private companies.
Farmers all over India are protesting against the establishment of SEZ primarily because their land is taken under this program to benefit corporate moghuls, such as the Ambanis. Navdanya reports that just compensation for these farmers is an illusion: “Instead of offering farmers a just price it is importing substandard wheat at double the price per ton than what the farmers are being paid per ton.”
The SEZ Act was passed to boost economic development in India. However, the Land Acquisition Act of 1894 does not clearly define the scope of land acquisition for a public purpose. Essentially, SEZ has been used by the government to acquire land for private companies. Now, the public outcry against the SEZ act is that it is “anti-peasantry, anti-rural poor, anti-labour and anti-environment.”
Navdanya reports that the Land Acquisition Act is in dire need of amendment. It permits 70 percent of the land required to be purchased by the company or corporation and 30 percent can be acquired for private projects by the government. The question is whether SEZ is really required to boost economic growth in India. Navdanya argues that China and Japan have seen tremendous growth without resorting to such legislation. In China, land acquired by the government is not transferred to corporations. Even though farmers can be shareholders in the business developed on their land, subject to conditions, the weather for crops may be more predictable than the rise and fall of the stock market. "There is no justification for the SEZ Act. Western European countries, the US, Japan and many other developing countries achieved growth without such a draconian, thoughtless and pro-corporate-capital legislation,'" Shiva said.
An in-depth analysis of the SEZ issues can be found in Shiva's article, From Corporate Land Grab to Land Sovereignty (ZNet Commentary, January 31, 2007):
The large scale uprooting of millions of farmers in U.P, West Bengal, Maharasthra is breaking the sacred bond between peasants and the land, which supports them. But it is also breaking the contract between citizens and the state which is based on the state being bound by the Constitution, and the fundamental rights of citizens that the Constitution guarantees....
Land, a sacred trust is being commodified by using state muscle to deny farmers their rights and then establish corporate monopoly on land ownership. It also contradicts the purpose of the land acquisition act which was supposed to be used for acquiring land for public purpose, not for private gain and monopoly ownership rights....
The proposal of the Prime Minister to give dispossessed farmers "stock options", is no solution. It is based on two false assumption - one that the Government has the right to violently appropriate the land of small farmers and peasants for its corporate friends wherever and whenever it wants. This is not democracy, it is corporate feudalism.
Secondly, the Prime Minister's assumption of "stock option" in place of farmers land rights suggests that he has a world view that small farmers can be fully dispossessed and uprooted from farming, and the real wealth of farmers in their land can be replaced by crumbs in the speculative finance economy bubble.
Jawaharlal Nehru, the first Prime Minister of Independent India, started a movement towards improving the urban infrastructure. The real estate sector is on a high growth path according to a recent report in The Economic Times. The SEZ Act has significantly contributed to India’s dramatic real estate boom. Yet the harsh reality is that the land is taken from farmers to benefit private enterprise. A large population of the country consists of agrarians who will be unemployed in a market that seeks only skilled laborers and just compensation for acquired property remains questionable. Before implementing incentives to boost short-term economic growth, the legislature needs to update its laws to ensure its citizens’ rights are protected in the world’s largest democracy.
See our post about eminent domain in India (May 16, 2007): SEZ deepens political divides
From New Jersey Eminent Domain Law Blog posted 2007-11-08.