Wednesday, February 25, 2015

Land Acquisition Bill - Solution: Indian Railways

All through his stint as CM of Gujarat, NaMo resisted the temptation to go after political rivals via judicial or other non-political channels.

He preferred instead to ensure their political demise by vanquishing them in the arena of electoral politics.  

As several media honchos shifted anxiously in their chairs, many wondered if PM Modi would leverage state apparatus to strip them naked and turn Delhi into a giant Hammam.

But even through the campaign for 2014, candidate Modi made it a point to put these fears to rest.  "I will not waste my precious political capital on (a distracting) political vendetta" seemed to be his message of peace.

As the PM, he has kept his word.  While his core supporters are incensed at this 'hands-off' approach, expecting to see a political guillotine instead, the PM has wisely elected to focus his considerable talents on the task at hand; which is to extract India from the morass of political and economic mess.

But try as he may, his political adversaries won’t let him take the high road.  A successful PM means an end to the ‘Politics of Patronage’ as practiced and perfected by Congress and its regional clones.

Sonia and her regional socialist satraps know all too well what the Modi Model does to its political opponents.  Madhavsinh Solanki, Suresh Mehta, Kashiram Rana, Shankersinh Vaghela, Keshubhai Patel – none were targeted personally.  Despite their vicious campaign, NaMo chose to focus on his work so that the ‘Politics of Performance’ he spawned ensured their natural (albeit painful) political demise.

But in playing with the same template at the national level, PM Modi is leaving many a flank open for his opponents to attack and slow him down.

As explained in previous posts, Sonia is no fool.  Her scorched earth strategy circa 2013, ensured that many a trap door were left in place for a future non-Congress PM.

LAB is just such a trap door.  Even though the merits of the bill may be hard to challenge, the imagery around it is very easily manipulated. 

“A PM and his Industrialists friends stealing assests of the poor to usher in an India for the rich, by the rich, of the rich”

PM Modi has tried to counter this narrative by making himself the only real public face of his govt and its policies.  But Delhi isn’t Gujarat.  Every verbal spasm by even the most remotely associated ‘member’ of the Sangh parivar can and will be exaggerated into the government’s policy statement.

One can always argue that media was unable to stop CM Modi, what chances does it have of stopping PM Modi.

But there’s one vital difference that even the PM seems to have overlooked.  Gujarat was NaMo and NaMo was Gujarat. 

A harsh policy explained by an honest, clean, hardworking PM may be palatable to the masses that elected him, but the same policy peddled by ministers who till May 2014 were maneuvering for an “If not me, than none from the BJP” electoral outcome, cannot and will not be trusted by voters.

And therein lies the PM’s dilemma.  Delhi is not NaMo and NaMo is not Delhi. 

When he first took office I wrote these two pieces - http://inflextionpoint.blogspot.com/2014/07/pm-narendra-modi-must-run.html

The basic message of those two posts was that PM Modi must run an unconventional government.  Instead, what we have witnessed in the first 9 months of this government is a typically conventional approach with a few nuances to clearly differentiate it from previous regimes.

The Swaach Bharat campaign is a wonderful example of unconventional governance.  The sad part is that it is an isolated example.

I’m not arguing that the work done by Shri Gadkari and Shri Piyush Goyal is a waste of time.  In fact they are doing exactly what needs to be done – the rapid scaling up of India’s transportation and power infrastructure.

The fault lies in the govt. thinking that the fruits of these efforts would reflect in electoral outcomes in 2019.

Right wing economics depends on market forces driving the economy, actively aided and supported by an efficient government.  These ideas have worked well the world over.  There’s no disputing them.  But India of 2015 is not the United States of 1950s.

Intellectuals who recognize the obvious superiority of right wing economics seldom vote, whereas (as explained here - http://inflextionpoint.blogspot.com/2011/06/understanding-indian-electorate.html)
 voters struggling for survival have neither the time nor the patience to understand these proven economic paradigms.


These voters want two clear deliverables:
1.     Put the corrupt behind bars so that they stop looting our wealth
2.     Give us handouts so our daily struggles can be made more manageable

Growing uproar over the LAB is merely a symptom of a deeper malaise afflicting this government.  A malaise which is a direct outcome of a govt. ignoring the thought process of India’s regular and likely voters.

This govt being very early in its tenure and these shortcomings can be easily rectified.  But left unaddressed, it could turn 2019 into a fight for a hung parliament i.e. a defeat for PM Modi.

But ‘Make in India’ needs land.  Without the ability to quickly acquire land, setting up factories could take years.  As explained in previous posts, the PM has only 36 months to finish implementing key economic strategies so that the effects can be felt by 2019.

This leaves the PM in no-mans-land.  He can’t acquire land as any attempts to do so would render him with an anti-Farmer tag (the death knell of Indian politics) but if he doesn’t facilitate easy acquisition of land, he can’t implement his agenda and suffers the same electoral fate.

So how does he get himself out of this chakravuyha? 

Answer:  Government Land particularly Railway land.

Indian Railways is one of the biggest land owners in the country.  Given its proximity to the rail infrastructure, this land is exceptionally valuable.  Its commercial value is unquantifiable. 

It can be used for multiple purposes:

1.      To build factories which need supply of rail transported input materials and rail transported finished products (Cars, electronics, etc.)
2.     Tourism – hotels, restaurants, etc.
3.     Hospitals and health care centers
4.     Etc.

This land can be leveraged in two ways:
a)     Offer it to industries to kick start the ‘Make in India’ initiative
b)     Create land infrastructure bonds with this land as collateral
a.      These bonds can be given to all farmers in addition to the market value of their lands so that their financial future is secure
b.     The bonds could come with an healthy coupon rate – say 10% which would be an additional way to compensate the farmer
c.      Farmers could benefit in three ways
                                                             i.      Market value for the land acquired
                                                           ii.      Payment from the Bond upon maturity
                                                        iii.      Monthly interest payments from the Bonds
d.     Such compensation would come in addition to jobs for farmers in any new factories that come up on the land acquired

Such a strategy would help turn farmers into stakeholders in ‘Make in India’ and ensure immediate electoral dividends to the BJP government.






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