Transforming land acquisition into bonanza
The damning report of the Justice A.S. Naidu Commission constituted to enquire into police excesses against tribals in Kalinga Nagar, Orissa protesting the acquisition of their land for establishing a massive steel complex, is additional evidence that across the subcontinent a large number of people are being deprived of their property without satisfactory compensation. Although the tribals’ land has been forcibly acquired by the state government for the establishment of capital-intensive steelworks of several mega corporations, the price proposed to be paid for it is unjust. Unfortunately such official short-changing of illiterate tribals, farmers and citizens in general has become commonplace since the fundamental right to own and dispose property was abolished and deleted from the Constitution in 1976 during the dark period of the Emergency, after which it has not been restored. Across the country the Central and state governments are forcibly acquiring land and buildings of citizens professedly for public purposes under the Land Acquisition Act, 1894 and other development legislation, flouting the basic principles of market related compensation. Little wonder that movements such as the Narmada Bachao Andolan — the three-decades-old protest against the construction of several dams on the river Narmada which have submerged the landholdings of thousands of farmers who have been inadequately compensated for the loss of their livelihood — are being replicated in every part of the country.
Like much else in the control-command economic development model foolishly adopted under post-independence India’s centrally planned economy, the issue of compensation for land and property acquired by the Central and state governments for public purposes has been clouded by opacity. According to information available, compensation is calculated by shadowy bureaucrats in government on the basis of a mix of historical cost, price of alternative landholdings and projected earnings of acquired property. This complex land acquisition process which allows considerable room for the exercise of bureaucratic discretion, is outdated and unacceptable within the newly liberalised and deregulated Indian economy.
In this connection the simple and transparent compensation policy applied in the US when private property is acquired for public purpose, is instructive and worthy of emulation. In the event of an American citizen’s property being acquired by the state, the compensation paid is a simple multiple of market value. Consequently with government acquisition proving a bonanza for the citizen, there is minimal resentment or litigation.
This transparent property acquisition policy needs to be adopted and followed by the Central and state governments in this country. Secretive and opaque methodologies by which land and property of hapless farmers and tribals is forcibly acquired for pittances by governments and then sold at hugely inflated prices to industry and urban housing developers, need to be replaced by transparent processes and market-related compensation systems. The purchase of a citizen’s private property by the state should result in joy and festivity rather than heartburn and prolonged litigation.
Indefensible subsidisation of IIM students
B
lanket media coverage and manufactured euphoria celebrating the unprecedented start-up salary packages being contracted by graduates of the country’s six Central government promoted Indian Institutes of Management (IIMs) have omitted the inconvenient detail that these elite B-schools are heavily subsidised by India’s tax-paying public. The annual tuition-cum-residence fees payable at these blue-chip institutions of business education are modest, ranging between Rs.1.25-1.58 lakh per year — way below the actual per pupil revenue expenditure (i.e excluding capital charge) estimated at Rs.3-3.5 lakh per student incurred by the IIM managements. For instance the annual tuition fee payable at IIM-Bangalore is Rs.1.58 lakh for its two-year postgraduate diploma programme. In exchange for payment of this subsidised tuition fee, the institute’s star student landed a job with Barclays Capital, London which will earn him a start-up pay of Rs.86.85 lakh per year. While relatively modest, the average annual start-up of domestically placed IIM graduates is an enviable Rs.9 lakh per year.
Against this backdrop, it is a moot point why the Central government, i.e Indian taxpayers (one-third of whom earn less than $1 equivalent per day), should subsidise the business management education of a tiny elite — the aggregate annual intake of the six IIMs is 1,500 students — who are assured of sky-high remuneration after graduation. Particularly in the post-liberalisation era when bank finance, especially for such potentially high net worth students, is easily accessible.
The world over a consensus has emerged that higher — especially professional — education is a private good unmeriting public subsidisation. That’s why American and British B-schools levy annual tuition fees ranging between $30,000-50,000 (Rs.13-22 lakh) per year to deliver industry-ready professionals to corporates around the world. On the same premise, the private sector promoted Indian School of Business, Hyderabad levies an annual tuition fee of Rs.15 lakh for its intensive one-year diploma programme without any price resistance from applicants clamouring for admission.
The unjustifiable subsidisation of postgraduate B-school — indeed all professional — education is a typical example of the large number of non-merit subsidies conferred by the Central and state governments upon the relatively affluent and expanding middle class within Indian society.
In the circumstances, blanket subsidisation of the education of well-off middle class students who make it into the IIMs through highly priced tuition/ coaching institutes which help them to top the Common Admission Test of the IIMs — and who are assured of whopping remuneration packages upon graduation — is completely unwarranted and unjustified. Persistence with this patent social inequity is tantamount to rubbing salt into the country’s 180 million poor children denied half decent primary education.