This Article is From Sep 07, 2015

Why Modi's Reforms Lie in Tatters

What dire consequences the Finance Minister had predicted if his government's land acquisition Ordinance were not passed. Rural infrastructure would not be built! Rural industrialization would come to a full-stop!! Rural development would be strangled!!!

No one bought the argument except the government and its clapper boys. Now their own organizations have forced them to beat a retreat. The land acquisition Ordinance, first promulgated in December 2014, was left to lapse on the last day of August. The only law on land acquisition that remains on the statute books is the UPA's 2013 law - the very law castigated by the BJP till the last day of August as anti-farmer, anti-development, anti-sabka saath, sabka vikas. Well, if any of the nonsense we have been hearing over the last nine months from Jaitley & Co had any validity, it is now the BJP government that is anti-farmer, anti-development, anti-sabka saath, sabka vikas. What a denouement for the Modi model!

For make no mistake. The lapsing of the Ordinance is a repudiation of the Gujarat Model of Development. It was that model that was touted through the 2014 Lok Sabha election as the blueprint for India's future development. It was that model that bewitched the electorate into handing Modi an absolute majority. It was that which seduced Moody's into raising India a notch up from "stable" to "positive". The Gujarat model was essentially based on guaranteeing investors, particularly big investors, land dirt cheap or even free if they brought in their shekels. Modi was completely uncaring about who would get displaced. If Big Business wanted land, he would gift it to them. The whole of Gujarat became a kind of Modi land bank where, using his clout as CM, he poured land bounties on the country's richest captains of industry so that they would help him realize his dream of Vibrant Gujarat.

Since he had ridden to power on the social polarization he wrought in 2002, Modi had the confidence that his gaddi would remain in tact irrespective of the thumbs down to him given by the two worst-affected sections of Gujarat society: the tribals who were deprived of their land (the erstwhile Planning Commission estimated that the tribals, constituting about 8 percent of Gujarat's population, comprised a humongous 76 percent of those driven off their land); and, of course, the Muslims. These two segments remained steadfast in their opposition to Modi, it being estimated by the polling agency, Cicero, that over 70 percent of these segments voted against Modi in the 2012 state assembly elections, the election that catapulted him into contender for the Premiership. But so effectively had Modi consolidated the non-Muslim, non-tribal vote that by tom-tomming Gujarat's growth rates, he was able to mislead voters into believing that what Gujarat thinks today, India thinks tomorrow.

He was also greatly boosted by the Sardar Sarovar multi-purpose irrigation project, a project conceived decades ago, launched by Rajiv Gandhi in the late eighties, crucially supported by PV Narasimha Rao when in the mid-90s the World Bank withdrew out of sensitivity to the concerns raised by Medha Patkar's Narmada Bachao Andolan, and inaugurated on the eve of Modi taking office. Of course, the immediate impact of water for the first time ever reaching parched fields was that even as industry was taking off from forcibly acquired land, agriculture went into an upward spin and created the illusion that there was magic in the Modi model. There was no more an ardent believer in the Modi magic than Modi himself. He leaped on to the national bandwagon and found himself in Race Course Road on the morrow of the elections.

However, long before Modi became a serious PM candidate (in anyone's eyes but perhaps his own), the country's farmers were deeply disturbed at the way the 1894 land acquisition legislation, amended decisively in 1962 and 1984 to favour the acquirer over the acquiree, was spreading alarm over property rights all over rural India. Taking the amendments as their license to loot, state governments, over the three decades leading to Bhatta Parsaul, used their virtually dictatorial powers to usurp the property rights of the tribals and peasant class, not only depriving millions of forest-dwellers and small and marginal owners of their land, but also throwing tens of millions out of their traditional livelihood. This came starkly to light in 2010 at Bhatta Parsaul in the neighbourhood of Delhi alerting, the political class to a brewing crisis that would brook no delay.

And thus arose the 2013 Act, scrapping the previous more-than-century-old legislation and replacing it with a more humane Act that recognized the human consequences of forcible land acquisition. I was a member of the standing committee that scrutinized the draft legislation under the very able and fair leadership of chairperson Sumitra Mahajan, now the Hon'ble Speaker. Our suggestions were even more radical than the original thrust of Jairam Ramesh's draft. In particular, we sought to ensure that the last word would lie with the Gram Sabha and the Panchayats so that community involvement would be total; and the individual in danger of losing his property or his employment would have the backing of the entire village community to secure his rights as a citizen of the country and a human being entitled to compassion. Many of the committee's suggestions were rejected by the Manmohan Singh government as being too far out. But that helped bring Arun Jaitely and the BJP round to accepting the Ramesh version with a few changes induced by the standing committee.

By early 2013, largely through hectic consultations between Government and the Opposition, a draft had been prepared which found all-round acceptance. And thus the new land acquisition law came into being virtually unanimously, with Jaitley and the BJP very much on board. Nothing was rushed or roughly pushed. Everything was agreed upon after due deliberation. The 2013 Act was as much the result of Congress compromise as it was of BJP acquiescence. While it is true that Narendra Modi, as CM Gujarat, was not party to the Parliament consensus, the fact remains that the BJP Parliamentary Party was fully consulted and eventually accepted the consensus.

During the campaign, Modi came to believe that the vote for him was a vote for the Gujarat model that he had so assiduously promoted as his principal election plank. Fudging facts and fiddling the figures, Modi's voice became so dominant as the election progressed and the Rajdeep Sardesais grew so enamoured of this new rhetoric that apart from skeptical academics in The Economic & Political Weekly and such little-read journals, however exalted their intellectual stature, the country (or at least 31 percent of the voters) was led into believing that such Modi-fied economic policies would take us to the Valhalla of sabka saath-sabka vikas.

So what was this new formula? As MK Venu points out in a perceptive blog worth reading, it consisted essentially of three magic wands. One, unfettered land acquisition to bring in Big Boy investment both from India and abroad. Second, radical undermining of current labor laws to promote "hire-and-fire". Third, a Goods and Services Tax to transform the whole country into a single common market. 500 days into office, Modi is discovering that what seemed obvious to him in Ahmedabad does not appear quite so obvious in Delhi. Ironically, it was principally his unyielding opposition as Chief Minister Gujarat to the Goods and Services Bill 2011 that scuppered Pranab Mukherjee's initiative. Modi had to go into complete U-turn for GST to suddenly become the BJP's touchstone for faster growth. Now he and Jaitley find themselves stymied by Congress' better understanding of what kind of GST is required to really accelerate economic growth - no GST is better than a poorly-drafted GST. We'll explain that to them once they start consulting us as earnestly as Jairam Ramesh did with them over the Land Acquisition Act, 2013.

Modi's proposed changes to labour laws led to such a furious reaction in organized labour circles, including the BJP's own trade union wing, that the labour reforms he sought in mid-2014 soon after becoming PM had to be postponed to bring the Sangh Parivar on board. The BJP's union might have been dissuaded from participation in the nation-wide labour strike on  September 2 against the proposed amendments, but the BJP union remains firm in its opposition to the changes in labour laws that the Modi government wants to bring in.

And now comes the humiliation of having to eat humble pie over the land acquisition legislation. The Modi model lies in tatters. And the Patidar agitation in his home state shows that the Modi model is being challenged even in Gujarat. The countdown has begun. The evidence of this will be seen in Bihar.

(Mani Shankar Aiyar is a Congress MP in the Rajya Sabha.)

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