The Tribune, Chandigarh, India

HP takes on corruption
Bill to seize property of the corrupt

Himachal Pradesh Chief Minister Prem Kumar Dhumal on Monday introduced a Bill, which, if passed into law, would act as a major deterrent to civil servants who indulge in corrupt practices and amass property. Under the Bill if a civil servant is convicted by a special court, the government would confiscate his/her property and use it for public purpose.

The existing Prevention of Corruption Act and the Lokayukta Act do not permit this. Bihar and Madhya Pradesh have already passed similar laws and their experience can be fruitful for Himachal. The Supreme Court has removed many hurdles by upholding the Bihar law. The proposed Lokpal law at the Centre also targets corrupt civil servants in states and a clash or overlapping will have to be avoided.

Fighting corruption will never be easy in this country. The permission required to proceed against a civil servant is usually not granted, especially if the suspect is loyal to ruling politicians. The bureaucracy stands as one to protect its members in trouble. Politicians and bureaucrats cover up each others’ illegalities. The smart ones do not buy property in their own name and it is difficult to link benami property with the real owner. It is not yet clear whether the term “civil servant” in the Himachal Bill includes a minister or a politician occupying an official position. The Bihar Act applies to politicians as well.

The Himachal Bill does try to deal with judicial delays. It calls for the setting up of special courts. The trial will have to be completed within a year. All this is commendable but would test the judicial system built on dilatory and cumbersome procedures, adjournments and appeals. Judges too can be pliable. Besides, politicians and bureaucrats can make any law ineffective no matter how foolproof it seemingly is. Political will and public pressure — as witnessed in team Anna’s recent campaign for a strong Lokpal — are therefore important in the eradication of corruption.

Election cell
Police is not meant to spy on Opposition

Reports that the Punjab Police is gathering intelligence inputs on the political opponents of the ruling alliance in the run-up to the SGPC and Assembly elections are highly disturbing. It is one thing for the intelligence wing of the police to maintain a vigil to pre-empt violence or booth capturing during the elections but quite another to keep a tab on the opponents.

Inquiries show that information is being collected on the likely candidates for the 117 Assembly constituencies and efforts are on to identify political rivals who can be possibly won over and to gauge their strengths and weaknesses and the means to win them over. This is nothing other than pure and simple spying on them.

The reports are bound to be denied by the official agencies but that does not mean such snooping is not taking place. The fact of the matter is that almost all governments indulge in such cloak and dagger activities. It is just that some do it in a brazen manner. In keeping with the times, the age-old method of compiling hard copies of reports gathered from its “agents” in different towns and areas has given way to using the e-mail service for gathering such inputs.

Whatever the extent, the activity is totally illegal and unethical. Under the rules, the police cannot work in tandem with its political bosses for furthering its interests in the elections by providing them with intelligence inputs. Taxpayers do not pay policemen’s salaries to make them handmaidens of the party in power. It not only presents the police in a bad light but also shakes the public confidence in its neutrality and uprightness. The Election Commission should look into the matter seriously and urgently so that no ruling party can enjoy such undue advantage.

Thought for the Day

The art of being wise is the art of knowing what to overlook. — William James

ARTICLE

Seize the Anna moment
Parliament and people should cooperate
by Inder Malhotra

NOW that the Anna storm is over, and has ended on a constructive note with Parliament unanimously “endorsing in principle” the three demands of Mr. Hazare’s movement in relation to the Lokpal Bill, it is time to seize the moment and go ahead speedily and sincerely with what needs to be done.

In the first place, it is immaterial whether or not the most maladroit Congress-led government technically withdraws its Lokpal Bill, now before the standing committee. The wide world knows that it is not worth the paper it is printed on. Even at the height of the agitation when the powers-that-be were trying to crush it, several Congress MPs stood up and stated that the official legislation was “weak” and “inadequate”. More importantly, Prime Minister Manmohan Singh eventually committed himself to having a “strong and effective” Bill. This solemn promise has to be made good urgently and quickly enough, say, in the winter session of Parliament.

It would be catastrophic if the law on Lokpal becomes yet another victim of dilatory, even deceitful tricks almost every government in recent decades has specialised in. One hopes that the core of the ruling coalition, indeed the whole of the political class, has at long last learnt how intense is the people’s anger against unending and ever-mounting corruption. To ignore this reality could invite an even bigger upsurge than the nationwide protest we have witnessed.

Secondly, and this is a crucial point on which both Dr. Singh and Mr. Hazare are agreed, the Lokpal Bill alone will never be enough to combat corruption that seems to have become something like leukemia, the cancer of the bloodstream. Just look at the cases of brazen graft that were exposed during the massive revulsion against this scourge. These ranged from the arrest of a commissioner of income tax in Mumbai to the chilling case of a poor patient at Delhi’s All India Institute of Medical Sciences whose surgery was delayed by a year because he could not pay a bribe of Rs. 10,000 to get the “clearance” for the release of funds for it.

Everyone agrees that a lot of harsh measures will have to be taken. The question is: why haven’t at least those that have been on the anvil for long have not been taken yet? To cite only one of numerous instances, a succession of Chief Election Commissioners — most recently S.Y. Quraishi — have urged the government to amend the Representation of People Act to debar from elections those against whom law courts, not prosecuting authorities, have framed criminal charges of a serious nature, but to no avail.

Meanwhile, most dubious and tainted men have not only sat in Parliament but also adorned the council of ministers of both Atal Bihari Vajpayee and Dr. Singh. It is also curious that both these governments have been wedded to the pernicious “single-point directive” under the Prevention of Corruption Act. Under it, the Central Bureau of Investigation cannot start investigations against any officer of the rank of Joint Secretary and above without the government’s permission. Ironically, at the height of the Anna agitation the CBI’s 327 requests for permission under the single-point directive were pending before the government for long!

My third important point is that one good thing has come out of the recent convulsions. After many a summer, Parliament and the people appear to be on the same page. For more years than one can count, people in this country have been denouncing all politicians and even Parliament. “Sab chor hain (all are thieves) is the general cry. From the stage at Ramlila Ground actor Om Puri gave an ugly demonstration of the educated middle-class view of MPs. Even worse was the performance of the former police officer and a member of Team Anna, Kiran Bedi. Both are being hauled up for a “breach of privilege” of Parliament. Mr. Puri has apologised at least for some of his objectionable remarks; Ms. Bedi remains defiant.

Even Mr. Hazare had earlier taken the totally unacceptable stand that Parliament must pass only his Jan Lokpal Bill, and not any other version of it. But later he abandoned his obduracy and showed flexibility. Without actually saying so, he evidently realised that Parliament’s “dignity” and “authority” has to be respected, a point all sections of parliamentarians emphasised with varying degrees of emphasis, tinged sometimes with caste sentiment. On their part, both Houses of Parliament also realised that people’s voice must not be brushed aside with a flippant wave of hand.

This said, one must add that the hugely widespread notion that Parliament is “supreme” is absolutely inaccurate. The concept of Parliament’s supremacy is confined only to Britain because it grew out of British Parliament’s bitter struggle with the monarch, and that country has never had a written constitution. In this country the Constitution is supreme, not Parliament or any other institution. The Supreme Court has thrown out more parliamentary laws than one can keep count of.

Of course, Parliament is sovereign. No one is allowed to trifle with it or its authority. The other side of the coin is that Parliament must also be receptive to what the people want. An extra-parliamentary agitation as long as it is peaceful is a fundamental right of all citizens. Some smart Alecs in Dr. Singh’s ministerial team propounded the doctrine that when a subject (read Lokpal Bill) was before Parliament, an agitation against it was impermissible, indeed “illegal”. One hopes they would not repeat this ridiculous nonsense. In my view every stakeholder in Indian democracy, which means every Indian, has a duty to respect Parliament. It would also help to bear in mind the “grammar of anarchy” speech of B. R. Ambedkar, the chief draughtsman of the Constitution, much quoted in recent days. By the same token, Parliament can command that respect only by earning it.

What large sections of MPs have done over several decades is hardly conducive to enhancing Parliament’s prestige or dignity. On Saturday, both Houses rose to their full height and suddenly brought back memories of the Nehru era when Indian Parliament was the role model for national legislatures elsewhere. Would they please stick to that decorum, decency and seriousness?

MIDDLE

Compliments returned
by R.K.Kaushik

Mr Madan Gopal Singh was the Registrar of Punjab University at Lahore before the partition of India. He had a P.A. named Ghulam Hasan, who was attached with him for more than 10 years and was quite close to him. He, like Mr Madan Gopal Singh, stayed on the university campus.

Once the P.A’s daughter got seriously ill and had to be shifted to Sir Ganga Ram Hospital in Lahore for an operation. At that time the treatment in a private hospital, specially by a foreign doctor, was very costly. Mr Madan Gopal not only personally assisted the family of Ghulam Hasan in the treatment but also gave him Rs 1,200 (a big amount at that time). He also told him that since he treated his daughter as his own, there was no need to return the money.

Later, Ghulam Hasan suffered a serious attack of jaundice and was hospitalised. Mr Madan Gopal not only deputed his staff to take care of him but also gave him financial help of more than Rs 1,000 and ensured an improved diet for weeks together. Many similar favours were shown by him to Ghulam Hasan and his family from time to time. The kindness of the Registrar was well known and other employees used to feel envious of Ghulam Hasan.

The Radcliff award was announced on 17 August, 1947. Lahore went to Pakistan and Punjab University was to be bifurcated. There were communal riots in which lakhs were killed. There was communal tension and killings in Lahore also. Hindus and Sikhs were migrating in thousands.

Mr Madan Gopal stayed on and attended his office regularly. The Home Secretary, Punjab, Mr A.A. Macdonald, was also holding the charge of the Vice-Chancellor of the university.

On 31 August 1947, Mr Madan Gopal went to his office and started working. After a few minutes he saw his P.A entering his room menacingly who pushed a dagger into his stomach. A second blow followed, which killed him.

The atmosphere was so vitiated with communal overtones that the body remained on the floor for 2-3 hours till the acting Vice-Chancellor came there accompanied by Inspector-General of Police, Khan Qurban Ali, and the acting District Magistrate of Lahore, Mr A.A Williams.

The university staff was dumb struck. No case was registered and there were no investigations to trace the killer. Everybody was saying that Ghulam Hasan had given a brutal return compliment to his boss for the favours, help and kindness shown by him over more than a decade.

Ghulam Hasan was never arrested and a few days later he killed the head of the economics department of the university, Prof. Brij Narayan, in a similar manner. The actions of the P.A were rewarded by the then Chief Minister of Punjab (Pakistan), Nawab Iftikhar Hussein of Mamdot, by making him the Chairman of the Education Board of Punjab.

OPED — LAW

Draft bill looks promising
The new Draft Land Acquisition & Rehabilitation and Resettlement Bill, 2011, which seeks to replace the 117 years old Land Acquisition Act, is likely to be introduced in the current session of Parliament.
Alok Tewari

Farmers block Delhi-Jaipur highway to protest Haryana govt’s move to acquire fertile land. Photo: Sayeed Ahmed

On first reading, the draft Bill appears to be a politically sensitive piece of legislation that could potentially remove a big roadblock to industrial investment, addresses Relief & Rehabilitation ( R & R), provides safeguards for both land-owners and livelihood losers while clearly defining the public purpose for which land can be acquired by the government.

The draft Bill proposes to curtail the scope for which land can be acquired by the government. The Bill permits land acquisition by the government for its own use or with the ultimate intent to transfer land to private parties for stated public purpose, including public private partnership projects. Further, the government would be permitted to acquire land for immediate and declared use by private companies for public purposes. The Bill provides for a rider that the aforesaid acquisition would be allowed only where 80% of the affected parties give their consent to the proposed acquisition.

The Bill seeks to provide a definitive meaning to the term "public purpose" and rid it of the ambiguities surrounding it under the existing Act. The definition of "public purpose" under the Bill includes strategic purposes (e.g., armed forces, national security); infrastructure, industrialisation and Urbanisation (where benefits largely accrue to the general public); land acquired for R&R purposes; Village or urban sites (planned development - residential purposes for the poor and educational and health schemes); land for private companies for public purpose and for needs arising from natural calamities.

To safeguard against indiscriminate acquisition, the Bill requires the concerned states to set up a committee under the Chief Secretary to ascertain whether an acquisition is for "public purpose" and to conduct a social impact assessment for the land in question. Further, the Bill proposes that if the acquired land is not put to use for the intended use within five years of acquisition, the same would be returned to the original owner.

The Bill lays out separate compensation packages that take into account the following three factors: the market value of the land, the value of assets attached to the land and the solatium which is equivalent to 100% of total compensation (for rural and urban areas).

In order to make it a more inclusive process, for the first time the government has acknowledged the role of the Gram Sabhas in the process of land acquisition. The Bill will make it mandatory to consult Gram Sabhas and ensure that the R&R package is executed before the acquired land is transferred. This pre-notification discussions with local bodies is a procedural innovation which should help reduce litigation and speed up the process of fair and just acquisition.

The Bill has also tried to give modified applicability to the much controversial 'urgency clause' to circumvent a Noida-like situation. Under the Bill, 'urgency clause' can be invoked only in cases where the land is being acquired for national defence and security purposes, R&R needs in the event of emergencies or natural calamities and in the 'rarest of rare' cases.

The Bill outrightly prohibits from purchasing any multi-cropped irrigated land for public purposes in order to safeguard the fertile land. The Bill also proposes to set up authorities both at the national and state levels for ensuring better R&R and for the purpose of providing speedy disposal of disputes relating to land acquisition, compensation and R&R. The Bill also provides for R&R provisions to be applicable to private companies in the event they acquire land measuring more than 100 acres.

The Bill further makes provisions facilitating 'land for land' and 'home for home' for people displaced and providing necessary infrastructural amenities in the resettlement areas. Further, special provisions have also been incorporated for STs and SCs who are displaced as a result of land acquisition.

It is evident that efforts have been made by the Government to address the shortcomings of the existing Act by involving people who are being affected and by providing a requisite mechanism for facilitating implementation of R&R schemes, establishing redressal systems and also establishing a methodology for arriving at the rates of compensation.

(Partner, Corporate & Real Estate, Kochhar & Co., New Delhi)

The problem is misuse of ‘public purpose’
Dilip Modi

There are two fundamental problems with the present system of land acquisition: the process of acquisition and the compensation. In India, land is mostly fragmented into small parcels (excepting forested areas).

Acquisition of a few hundred acres, necessary for an industrial or infrastructure project, requires dealing with several landowners. Also, not everyone wishes to sell. This makes the process cumbersome and increases the transaction cost of acquiring land.

However, the Land Acquisition Act, 1894, gave sweeping legal powers to the government to acquire almost any private land or property provided such acquisition is for "public purpose". This is also known as 'eminent domain', regarded as an inherent right of the state to take private property for public use. It is legal in many countries, including the US, UK and France.

The problem lies in interpretation of the term "public purpose". Unfortunately the Act did not define the term. So interpretation was left to the courts. The Supreme Court in 1971 took a very wide view of the term but did not provide any definition and left it to the state governments to define and often misinterpret the term. Strangely the judgment was delivered when 'right to private property' was still a fundamental right.

The assumption was that the state would always act in public interest and, therefore, any acquisition of private property would be to provide "public goods" that otherwise would not be provided by the market.

Lighthouses or clean air are typical examples. One or several ships can use the light at the same moment. Yet no single ship owner would build the lighthouse. The government needs to build it - in other words, provide public goods as the market will not provide them automatically.

This clearly implies the Act's provisions should only be used when the government itself is to provide infrastructure facilities (public good). They should not be used for land acquisition for private investments, whatever the benefits. For such transactions, the market must play out. The government should not undermine the market process.

Yet the very opposite has been the bane of land acquisition in India. Private parties tend to pass off the high transaction costs of negotiating with individual landholders to state governments. The latter have been more than willing to oblige, taking advantage of the sweeping powers to acquire land.

When markets are not allowed to play out, compensation is invariably low and not just. The question of compensation needs to be based on value of the land sought to be acquired. This can be done on the basis of prices prevailing in the past or the expected value of the land in future.

Typically, investment in industrial activities or infrastructure end up improving the value of land, benefiting primarily landowners, who are passive recipients of this windfall.

When farmers, whose land gets acquired, are compensated based on past prices, they do forgo potential benefits from urbanisation. This is a loss of opportunity cost in terms of forgone benefits, which far exceeds in the long run the compensation received.

There are also substantial income redistribution effects between farmers whose land is acquired compulsorily and farmers who retain their land. The latter can sell in the market at an appropriate time when urbanisation reaches them. This indirect redistribution causes tension between governments and farmers. When acquisition is not purely for public cause, tensions mount further.

Asset pricing should always be based on the future. The present system that defines compensation based on past transactions is not just or justified. The 'land market' in India is not free. Farmers are not allowed to sell their land for non-agricultural purposes. This has prevented industrial development in rural areas and direct negotiation by private enterprises to purchase land.

Farmers can rarely improve their economic positions substantially by cultivation and sale of, say, potatoes. At least they have not been able to do so in the past.

What they possibly need is ample compensation and financial inclusion that will guarantee substantial and safe returns on their received compensation, enabling them to dream of sending their children to good educational institutions and not to continue ploughing land and produce potatoes.

President, ASSOCHAM

The new law will push up land prices
Navin M Raheja

Acquisition of land with consent of land owners is a welcome step. But paying compensation six times higher than 'the best of the registered sale price in the area in the last 3 years' is only going to increase the cost of setting up industrial units, infrastructural projects and townships.

The compensation proposed by the Bill would create shortage of land and will make property costlier. If Government would acquire the land at higher prices, it would also sell to private developers at higher rates that would be eventually passed on to the buyers.

Land is an input cost in industry and if land is procured as suggested, then the input costs would become very expensive and Indian industry will not be able to compete with countries like China and Taiwan, among others. This would also fuel inflation and new projects would be unviable and give an unfair advantage to existing players with surplus land. Land generally accounts for 30-40% of the project cost and this would affect pricing of housing projects. The interest rates have already gone up making purchase difficult for home buyers and the new Bill, once enacted, would put housing beyond the reach of most buyers.

This could also lead to a lot of speculation by investors. In India, development plans get known or are leaked at an early stage and the smart or unscrupulous investors can get some of the land conveyed in their favor in such areas and then manipulate the sale an earn excessive profit.

If someone is privy to a government scheme (Master Plan for a town, for example), they could buy land and register it at higher prices. In India, everyone is a speculator. An investor could buy an acre of land for Rs 1 crore and register it for Rs 3 crore. When an industry goes to acquire land, it will have to pay six times the price or Rs 18 crore.

We suggest that there must be an open debate of all the stake holders such as the industry, the Government, the land owners and also the media to device a path which is transparent and pragmatic. A path that doesn't hinder growth and development and does not infringe upon the fundamental rights of the people.

It is suggested that every state should be required to put up land for development on e-portals (land offers for development projects) through a website or any other mechanism accessible to everyone, where land owners can collectively offer their land for sale with demanded price so that the industry and the Government is free to choose and negotiate with the group of such land owners/village panchayats on the rates and other terms etc through a transparent competitive process and then decide as to where to put up the industry/township/SEZ/ or infrastructure projects, depending upon sustainability and other factors. In short, acquisition of land should be based upon willingness and price offered by majority of land owners (70 to 80%) through an open and transparent manner.

The financing of industrial, infrastructural and even social activities will become tougher as there are no financial norms yet for financing the land. This policy will adversely affect the real estate development as additional burden of land cost will make housing expensive.

In fact the land in the open market too would become expensive. To benefit a few people, the burden of excessive cost of production and development will be borne by all the countrymen. Thus, this needs to be looked into rationally.

(CMD, Raheja Developers & Member of Governing Committee, Naredco )