Land Grab and “Development” Fraud in India


Analytical Monthly Review, published in Kharagpur, West Bengal, India, is a sister edition of Monthly Review.   Its September 2006 issue features the following editorial. — ED.

The land question, the fundamental failure of independent India, has again become one of the most debatable and controversial topics of the day.  Although the mass media and the dominant parliamentary political leaders suppress any public mention of revolutionary land reform, land to the tillers or abolition of feudal remnants, the irrepressible reality raises the question in one or another form.  Today land grabbing by the private corporate sector, both Indian and of foreign origin, in the name of so-called “development” and with the aid of government agencies and state machinery, has become a subject that cannot be avoided.  The reason at base is sixty years of failure to meet the legitimate demands of the many crore [tens of millions of] citizens who depend on agricultural land for their subsistence but have no claims deemed fully worthy by the judiciary, still the firmest bastion of colonial mentality.  With the introduction of the new economic policy since 1991, what had been a half century of localized injustice and repression became a qualitatively different phenomenon: the theft of land on a scale that could not be kept from public attention.

A few examples suffice to show the gravity of the issue:

The Bangalore-Mysore Infrastructure Corridor project (BMICP) — whose MOU was signed in 1995 between the Government of Karnataka and Nandi Infrastructure Corridor Enterprises (NICE), a consortium consisting of Kalyani Group (Pune), SAB Engineering (Pennsylvania, USA) and Vanasse Hangen Brustlin (VHB) (Boston, USA) — is a vast land scandal.  29,258 acres of land were notified for acquisition for the project, an excess of 10,945 acres beyond what was needed.  “Land Acquisition notifications were issued based on the requirement indicated by the promoter company and not on the basis of any technical drawings/maps as approved by the Government in PWD [Public Works Department]or the project report.”1  NICE shall no doubt seek to exploit commercially these highly valuable lands, obtained courtesy of the Government of Karnataka at minimal cost, to their own profit.  Even assuming a nominal commercial value per current rates, the excess acres handed over to NICE amount to a largesse of Rs. [Rupies] 10,000 crores [1 trillion].  To this should be added the benefits accrued by NICE on account of various tax and cess [tax] exemptions, and the advantages gained in possession in perpetuity of lands.  These profits are not one time, but astonishingly large and recurring.  On the other hand, according to various reports, the project will affect almost 200,000 people, mostly agricultural laborers and farmers.  Only those who can show proof of title will be eligible for cash compensation, a minority of the total affected population.

The Reliance Energy Group plans the world’s largest gas based 3,500 MW power plant to be located not on waste or marginal land, but on agricultural land considered to be among the most fertile on the planet — Dadri, Ghaziabad.  REG has acquired over 2,100 acres of land and is aggressively pursuing the acquisition of 400 more acres in seven villages of Dhaulana; experts say 700-800 acres would be sufficient.  The 3,500 MW gas-based power generation project is estimated eventually to cost over Rs 10,000 crore.  The farmers to whom the lands belong were totally unaware of the “acquisition” till the foundation stone was unveiled.

Forces of the Uttar Pradesh Provincial Armed Constabulary (PAC) brutally attacked residents of Bajhera  Khurd in  Dhaulana block of Ghaziabad district in UP over a period of two days, July 7-8, 2006, injuring many, including women, disabled, and old people and vandalizing/looting property worth lakhs [hundreds of thousands] of rupees.  The apparent crime of the villagers, mostly middle-income farmers, was their insistence on better compensation for the land that is being acquired by the government to hand over to the Anil Ambani-owned Reliance Energy Generation (REG).

While state-owned land was to be given to REG on a renewable lease for a period of 99 years at minimal cost, the forced acquisition of private land was to be paid for by the company.  The state government went about acquiring agricultural land under the Land Acquisition Act.  Significantly, the state government discounted nearly 40 per cent of the land cost to REG as part of its industrial policy to attract greater investments.  While a subsidy was being given to REG, the farmers whose land was being acquired by the state government were told that they would be paid Rs 150 per square yard (1 acre = 4,840 square yards).  The farmers demanded the market price, reportedly Rs 500 per square yard, and agitated against the low compensation package.  After several months of protesting at the offices of the local administration in vain, the farmers began a hunger strike and dharna [a fast conducted at the door of an offender] on the outskirts of Bajhera Khurd on November 25, 2005. In July 2006, eight months into the dharna, a few were forced to accept the meager compensation extended by the government for fear of the threat held out by goons, police, and local administration.  Nonetheless most villagers, concluding “enough was enough,” pulled off the boundary fencing set up by REG and decided to plough their land.

Reliance is also planning to set up a Special Economic Zone (“SEZ”) in small remote Pen Tehsil in Raigad in Maharashtra.  Thousands of farmers of this region are demonstrating against the land acquisition by the state government for the Reliance Company for a 10,120-hectare SEZ.  Out of the 10,120 hectares of land earmarked for acquisition, 5,720 hectares are irrigated from Hetavane dam, and “large tracts belong to the saltpans or wetlands, mangrove” essential to “carrying capacity and sustainability of this area.”2  The company plans to use this area for activities like manufacturing, trading, services, processing, logistics, repacking, warehousing, etc.  There was a police lathi [button] charge during a peaceful demonstration by local farmers of the Pen Panchkroshi Sheti Bachao Samiti (Pen Area Committee to Save the Farmland) on June 22, 2006.

Even in Left-ruled West Bengal, the state government will soon acquire 43,028 acres of land, mostly agricultural, in different parts of the state.  The decision to acquire the land has been passed by the Cabinet, and steps will be taken soon to implement it.  At Singur, 1,253 acres of land would be acquired to set up a small car factory by Tata Motors.  Another 2,000 acres will be needed in Uluberia in Howrah district to set up a private two-wheeler factory.  The West Bengal Government has already signed an agreement with a consortium led by Indonesia-based Salim Group to set up the largest infrastructure project in the state on nearly 40,000 acres.  The Salim-Bengal Project includes a chemical SEZ on 10,000 acres in East Midnapore district, bordering Haldia, as a joint venture, and a multi-product SEZ on 12,500 acres in Haldia.

But land acquisition in West Bengal is not going to be smooth sailing.  Protests are mounting across the state in several areas identified as land acquisition sites.  Especially in the process of acquiring 1,000-odd acres for Tata Motors’ project at Singur district, the government is facing stiff resistance from the farmers as well as agricultural wage laborers, organized in their Krishi Jomi Bachao Committee (Save Agricultural Land Committee).  The media reports that farmers there do not take any of the parliamentary parties, both ruling and opposition, as their true representative and are trying to gather forces among themselves.  It is reported that the land acquisition process received a setback as more than 100 residents of Santoshimatola area of Singur, including women, prevented officials from entering their villages to serve notice to acquire land on 1st September.  Villagers lay on the ground after a large police contingent reached the spot.  Brandishing brooms and sticks, they shouted slogans for hours and said they would fight land acquisition to the last drop of their blood.  The government is expected to use Section 9 of the Colonial Bengal Land Acquisition Act of 1894 to acquire the land.  Section 9 gives the government the power to acquire the land even if objections are filed.  Earlier, on 22 August, some 5,000 Singur farmers gheraoed [encircled] the block development officer’s office and held up hearings on claims and objections to acquisition of land for the Tata Motors car factory, by first not allowing officials to proceed to the camp, and then boycotting the hearing when the officers managed to get there under police escort.

How does all this look from the perspective of imperial capital?

Merrill Lynch forecasts that the Indian realty sector will grow from $12 billion in 2005 to $90 billion by 2015.  “‘India is the most exciting real estate market in Asia,” says Michael Smith, head of Asian real estate investment banking at Goldman Sachs.  “It’s one of the last major countries in Asia with an improving market.”

The run-up in prices has attracted the likes of Morgan Stanley, which has invested $68 million in Mantri Developers, a midsized construction firm in Bangalore, and Merrill Lynch, which invested $50 million in Panchsheel Developers, a regional builder.  Foreign companies have also poured money into funds that invest in Indian developers. GE Commercial Finance Real Estate, for example, has invested $63 million in an $800 million fund that is building IT parks.

Real estate funds set up to invest only in India have already raised more than $2.7 billion.  And new funds worth as much as $4 billion are being planned by J.P. Morgan, Britain’s Knight Frank, and other foreign investors.  Warburg Pincus, the largest private-equity investor in India, says it is spending nearly a third of its time studying opportunities in this area.3

The use of Land Acquisition Acts to seize agricultural land for the profit of imperial capital is indeed a scandal of the first order.  “Development” is here a case of fraud, pure and simple.  The business press makes clear that the forces of globalization see the Indian real estate sector as a bonanza; land prices are by international standards low, and now is the time to make sure that the future increase in prices will benefit global capital — not the residents.  Using “development” as dress, compliant state governments are put to use, invoking colonial statutes to seize vast properties juridically.  In these obscene deals, for each lakh of Reliance or Tata or Goldman Sachs future real estate profits, a thousand or more of poor rural residents are driven from their lands into the slums.  The resistance of the victims of land grabs for private profit is growing, and, as it becomes more visible, it shall encourage those who, thinking themselves isolated, fear to defend their land in the face of the police, the judiciary, the state governments, and global capital.  In West Bengal, it is on these plots of agricultural land that the left government’s deal with globalization faces an unavoidable contradiction.  Marxists must see this clearly, and from the perspective of the victims.

1  “Return Excess Land Acquired for BMIC,” The Hindu 31 March 2005.

2  Sanjay Sangvai, “Land-Grab by Rich: The Politics of SEZs in India,” The South Asian 5 July 2006

3  Yassir A. Pitalwalla, “Indian Real Estate: Boom or Bubble? Property Prices Are Rising Fast as the Tech Boom Spreads across the Country,” Fortune 5 July 2006.

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