India: Motherland or Mafia land?
In this issue:
» Infosys faces a crisis across the 'board'
» Power shortage threatens India's growth
» Food prices push millions below extreme poverty line
» Indian banks tighten lending
» ...and more!
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Leading economist, Raghuram Rajan has very pertinently nailed the real issue plaguing our country: the murkiness of land rights. We must all agree that in a vast country like India, land availability should not be a problem really. Then what makes the land market so inaccessible and illiquid? For starters, land rights in India are poorly defined. Especially, in the poorest states, land and revenue records are badly maintained. In many cases, it is very unclear who has the formal title to a piece of land. A number of communities, especially the tribal populations spread throughout India, do not have formal title to land but have been customary users of it over centuries.
You may be wondering why the government has not hastened land reforms. Unfortunately, powerful interests who thrive on such murkiness of land rights never want any reforms to see the light of day. This group of powerful 'insiders' includes corrupt politicians, well-connected industrialists, developers and the mafia. They control much of the lucrative land market and make enormous monopolistic gains. As a result, land acquisition for outsiders becomes extremely slow and difficult. This, in turn, slows the pace of infrastructure development.
Now, do you realise the reason for the poor inflow of FDI in India? Do you also understand why only a few insiders grab all the large-scale infrastructure and industrial projects?
So we need some serious "land reforms" to smoothen and speed up the process of land acquisition necessary for creating infrastructure and industries. We need reforms that clarify ownership of land. We need reforms that will bring transparency and liquidity in land transactions. Farmers and tribals should be given their rightful land titles. This will not only make land transactions fair and easy, but will also protect these poor natives from getting exploited.
Actually, the reforms are not technically difficult. What is really needed is political will. And to tell you the truth, we have some classic examples in our own country that prove the point. We'll discuss them in detail in our next issue.
Do you think India seriously needs land reforms to pace up infrastructure development? Share your comments with us or post your views on our facebook page.
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Chart of the day | |
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On another note, the top management of the company saw an upheaval as its HR director Mr Mohandas Pai has resigned from the Board of Directors. The resignation of another key member would come as a severe blow to the company, which is already trying to look out for a replacement for its Chairman, Mr Narayan Murthy. With Mr. Pai's resignation, the company which was known for its army of industry recognized leaders unfortunately stands at the brink of leadership problems.
02:21 |
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In FY11, just 60% of the targeted capacities were put up. But with the coal crisis mounting in the coming fiscal, the FY12 capacity additions may have to be reduced further. As much as the policy makers would want to make 9% + GDP growth projections believable, these facts make the scenario very blurred.
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That is not all. An additional 10% increase in food prices would cause another 10 m people to fall below the poverty line, while a 30% spike would lead to 34 m more poor. Rising oil prices have also contributed to the surge in food prices since producing and transporting agricultural goods has become more expensive.
Further, the linkages between food and oil have become tighter with many countries resorting to using crops for producing biofuels. All this has put pressure on basic food production and could result in more uprisings and crises if not dealt with by governments across the world soon.
03:47 |
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Corruption and poor quality of loans in the sector has almost prohibited banks from lending to realty players in the last few months. Sectors like aviation sector and micro finance too have been black listed by the banking entities for their poor fundamentals. But could that mean being conservative at the cost of growth? Even if so, we believe that banking sector is doing no wrong. Instead of being obsessed with high growth rates like China, Indian banks would be better off ensuring a more sustainable growth rate.
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14 Responses to "India: Motherland or Mafia land?"
nanda gopal
Jun 11, 2011Dear Readers,
It is wise to pay the farmers the value for their land. The payment should be at least three times the guidance value as given by the govt. The farmer would be more than happy to sell the land and the company buying the land for a purpose will also gain as the land will e available immediately and the cost of delay is reduced.
It is a win win situation and all should go for this scheme adopted by the Govt. of Malaysia.
Anil Mehta
Apr 30, 2011Yes, India needs radical land reforms. If we want poverty eradication, we need to grow @ 8-10% for next 10 years or so and for that growth, infrastrcuture development is the key. For infrastructure development, land availability is the biggest impediments. Old age draconian land laws are skrewed towards industrialist and against farmers and land owners. Land mafia with the help of Government agencies (read politicians and bureauracrats), result is protest and politics and delays. Just have a look at Gujarat. With far reaching land reform and amicable laws allowing industrialists to buy land from farmers directly at market determined rates have worked wonders. Govt is not required to interfere in the process. Even government agencies like Gujarat Industrial Development Corporation is purchases land for its industrial estates from farmers at market rate. This has make land acquisition and infrastructure development possible. Also land reforms in Gujarat has ensured that every land owner has title to his land and their no way anyone can deal with his land without his consent. This became possible by will power of Govt of Gujarat. Same things need to be done by Central Govt and All other states
Abhishek Goyal
Apr 23, 2011The problem in india is corruption that is if there is no corruption there would be no problem
We people are the problem aren't we the ones who given chance will wipe out all the money, yes even i am also corrupt
The corruption deters the growth of country, why we make ourselves honest and sow the seeds of honesty in our children.
Today There is need of honesty, private sector in india is honest, why not public sector
Private sector corruption cannot be counted as it is private money, But hard earned public money govt. gets by way of taxes,is govt. not mature enough how to spend it.
Congress and all parties have not done anything any other than playing party politics, avenues are there road infrasture, power sector infra etc.
see china we are nowhere near to china in 1950's we were more rich than china, look now
Shanghai and Beijing even 2 tier cities like guanzhou which people have not visited, are more developed than delhi and mumbai.
Shame on politicians and beaureucrats
Anil Dogra
Apr 18, 2011I Fully agree with you for change in laws,what i have seen is when a new project starts it goes on for ages for its completion. Unless and until there are some stringent laws there is no possiability and laws cant be changed because of the circus going on at the top.A real revolution is required
for the change.
Suresh Gokhale
Apr 18, 2011Post independence , we made good progress in technology & economy but unfortunately we also created “Uncrowned kings” in the areas of Sugar Mfg., Education ,Land. Etc. who have ruled this country as per their own laws. Land is a most important ant asset of our country & these land mafias along with ruling govt. took undue advantage to create wealth for themselves. Govt. shall make law to acquire all open land in the cities & make stringent rules for giving NA certificate.
Anil Seth
Apr 18, 2011Aggregating land under the current land ceiling laws is not a science but an art.There is ample land in our country. Less than 5 % of the land is currently occupied by cities,towns, villages & industry. Why the crisis of acquiring land? The problem starts when the entities intending to set up their projects request the State Governments to give them the land. The State Government policy requires that a uniform rate be compensated for the entire land proposed to be acquired, which more often than not meets with strong resistance from individual land owners. This is where the 'ART' of aggregating land comes into play. Developers regularly aggregate lands without the assistance from the State Govt. and they have little or no resistance from the land owners as they are paid what each individual land owner wants for their piece of land. Land being a State subject leaves little scope for the central Government to effectively aggregate the land.
The Govt. should consider asking experts to aggregate the required land and then pass on the land at a fair market price to the intending user. QED
dpm
Apr 17, 2011While the substance of your report is absolutely correct, I find
it hard to subscribe to your bias when you call people who make
money in property as 'speculators' whereas those who do so from
Stocks as 'experts'. Why this holier than though attitude? There
are investors/speculators/experts in all fields and there are
equal number of black-sheep in 'stocks' business as much as in
any other.
Infact the common man in the street is dead-sure that 'stock
experts' are a big cheat and outright greedy and after other
peoples hard earned money.
madhav ranade
Apr 16, 2011unless we have thousands of ADARSH like cases ... and ruthless demolition of the same ..... the nexus between politicians and babus with builders will not end ......
but virtually every babu and politician corrupted and every builder running after them .... the moot point is who will bell the cat .....
Sundaravaradan
Apr 16, 2011Anna Hazare!
(Slightly out-of-context).
The entire educated Indians rallied behind Anna Hazare, towards a common goal: Fight Corruption at all levels!
-- A thought occurred to me that we will be able to find ONE Anna Hazare, One Gandhi, One Obama, one revolutionary Flower Vendor of Tunisia etc.
It is near immpossible for all of us to elect 543 Honest Politicians (MPs), in a Democratic way, in a short time??!!(Indian Election System).
May be India will be able to rally behind ONE honest Leader (President) by revolution.
We should go for presidential form of Govt. ????
uday pasricha
Dec 21, 2011Almost all analyses of Indias problems points to the same culprit - the politician who now controls the economy of the land based on their increasing money and muscle. Every solution also seeks and yearns that the same culprit be changed. If their special interest insures no reform then we need comments and your articles to focus on ONE solution. No idealistic comments of of wanting everyone to be Like Anna Hazare. SO do we have a solution direction? Or we just wait to become bankrupt?? A huge crash in property value may just be the short term correction.