m a y 22, 1965

THE should rightfully accrue to the community insofar as a good deal of it arises from development activity, for which the individual owner is in no way responsible. The 'compensation' clause continues to be a major hurdle. Apart from the direct acquisition of land, means have to be found for mopping up the unearned increments in income that private owners of land (not intended to be taken over by the public authority) enjoy. The "Note on Urban Land Policy" had earlier recommended the levying of an annual tax on increments in urban property value, the basis being the capital value of the property. It is difficult to understand why this suggestion has been dropped and instead "suitable amendments' to the existing tax measures are advocated. None of the existing land taxes have even a marginal impact on mopping this surplus. An e n hanced surcharge on Stamp Duty on the Transfers of Properties theoretically could be a useful device but w i t h land mobility as low as it is and the temptation on the part of the owner to under-assess his property value, it cannot collect much. The Municipal Property Taxes, again, operate only where the augmented values are actually reflected in income and rent control can effectively conceal the increase. By and large, the public authorities LETTER FROM SOUTH

ECONOMIC

WEEKLY

been given to the need for proper land-disposal and land-use plans is unexceptionable, but surely, the preoccupation with acquisition rights is only rational when without unified ownership no planning is possible and where widespread evasion of taxes makes curbs on speculation inoperative? The existing Land Acquisition Acts are clearly dated, drawing their i n spiration mainly from the Act of 1894. Of the 11 Central Acts and 21 States Acts only 4 were enacted afresh after 1954 and incorporate some of the town planning objectives. Even the restricted scope there is under the old Acts for compulsory acquisition of land has been never exploited, so shackled are these Acts w i t h procedural formalities and compensation clauses favourable to the private owner and b u r densome to the public authority. Compensation was fixed at the market v a lue on the date of the preliminary notification by the public authority and thus included a large part of the unearned increment in land values. To make matters worse, in all cases of acquisition a 15 per cent solatiun was legally necessary and whenever disputes over compensation awards arose, the courts generally favoured the retention of solatium. Even the L a w Commission argued recently that the private owner's benefit from rising land values was more than offset by the rise in general price level and therefore payment of solatium was necessary to compensate this hardship. Rejecting this specious argument, the Committee pleads for the abolition of the unnecessarily generous provision. The rise in land values are not parallel to the rise in the price level far from i t ; it in exhorbitant and speculative land prices increased by about 127 per cent in 1950-60 in suburban Gauhati; in Delhi the price of suburban land increased over 145 per cent between 1955-58; in other bigger cities the increase was over 350 per cent in 4 to 5 years. The Committee recognises that pegging land values at the levels prevailing at an earlier date could minimise the financial burden of compensation. But actually it favours advance acquisition of land rather than ante-dating land values. This does not solve the problem of evolving a policy, politically feasible and socially justifiable. The surplus value generated by rising land prices

should not, the Committee feels under take development themselves in the underdeveloped areas, These should be given on lease to bonafide builders, preferably co-operatives. This policy has in fact been usually employed and co-operative housing in urban areas has been remarkably successful. The advantages of disposal on leasehold basis is that public control can be retained by stipulating the terms of the leasehold to conform to the social objectives. So far, the local bodies have not demonstrated their capacity to undertake development schemes and the Committee's fears that town planning is more than what the local bodies can chew are justified. It recommends the setting up of a high-powered body capable of instituting and implementing planned development. Neither the Planning Commission nor the State Governments are likely to agree to this they have been talking w i t h u n d i minished faith about community participation through "plan-cells" and "citizens' councils'. In conclusion one may say the report presents much useful information on the problem but little by way of solution. Its recommendations are general and its observations are a repetition of the comments made by the "Note on Urban Land Policy", two years earlier.

Kamaraj's
K A M A R A J has been stuck in his home State for some weeks now, undertaking a strenuous and intensive tour; neither the battle of the Rann nor the tussel for posts in the Congress Parliamentary party's executive impelled him Delhiwards. He kept going from one small town to another and trekking through a few villages as well. The crowds were up to the standard size and the general atmosphere was one of welcome to a local boy who had made good. The main reason for this long stay is the run of troubles that the Tamilnad Congress is currently confronting. Four Congress M L A s have left the party to form the Toilers Welfare Party. A c t u ally this is not a new party but a revival of the Toilers Party which had been formed prior to the first General Elections and won quite a few seats. At

Home Track
that time to ward off the possibility of a non-Congress Ministry being formed in the then composite Madras State, Rajaji had won them over w i t h a few Ministerships and finally absorbed them in the Congress. It is an unabashedly communal-caste party of the Vanniyas. This is a nonBrahmin caste which claims that it was far more oppressed and dominated by the Brahmins than the Mudaliars, whose cause Kamaraj espoused. The complaints of their leaders is that being anti-Brahmin is far from enough. They feel that this slogan has been used solely to push forward the claims of the advanced non-Brahmin castes. These castes are quite as bad as, if not worse than the Brahmins and have now to be displaced if the "toilers" (the Vanniyas are mainly agricultural labourers) are to make any substantial progress. Thus

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THE ECONOMIC WEEKLY these leaders hope to hoist Kamaraj w i t h his own petard, since the strategy of the Congress President has been to project his party as the representative of the oppressed castes. It is almost a consistent theory, i e, that in India the economic categories of haves and havenots run along the frontiers of caste. The desertion of prominent Vanniya leaders can have a considerable adverse effect on the position of the Congress. They are said to constitute the majority of the electorate in the districts of Arcot, Salem, Coimbatore and Trichy. It is also quite likely that the bulk of the caste will tend to follow their traditional leaders rather than retain their allegiance to the Congress. In addition to this breakaway has come the critical statement of Periyar,, the leader of the Dravida Kazhagam, who had been a pillar of support to the Congress when faced with the challenge from the D M K . It should not be forgotten that, despite all his eccentricity, Periyar had raised the banner of revolt against the Congress from an egalitarian angle. He was one of the first Indians to visit the Soviet Union in the late 1920s and returned with a burning enthusiasm for social justice. His hatred for the Brahmins, however, distorted itself into turning to the British for p r o tection against the possibility of their caste domination. But he has remained committed, rather oddly it is true, to the cause of the uplift of the downtrodden and has believed for some years that the ascendance of Kamaraj to the position of the undisputed leader of the Congress in Tanwlnad signified a revolution in the party. It could now become the instrument for social uplift on a mass scale. Periyar is now, however, making rather gloomy forecasts about Congress prospects. He feels that the failure to implement its socialist slogans is certain to bring the ruling party to a disastrous end. At the same time, he feels that even a dozen Kamarajs cannot salvage the Congress nor even prevent it from becoming indistinguishable from the Swatantra. He feels perplexed and wonders what he should advise the people to do. A serious situation is thus developing. A wide and heterogeneous a n t i Congress coalition is quite on the cards in Tamilnad. The D M K is already powerful and there is little reason to believe that there has been any decline in its strength. It is already allied to the Swatantra and Muslim League, at least, for electoral purposes. The Left Communists are quite close to it, in the belief that it represents an essentially radical force, despite some unfortunate separatist overtones. It should not be very difficult for it to come to a working agreement with the Vanniya leaders as well as to utilise to the full the sense of disenchantment which now sits heavily upon Periyar. This formidable coalition could not only skilfully utilise all the discontent against the Congress but also project itself as a realistic alternative, as a possible ruling group, which would greatly enhance its chances.

M a y 22, 1965 to persons who might disagree w i t h it on one and another issue. He has had high praise for the way in which the Soviet Union has stood by India at moments of crisis, even when another Communist country was involved. At the same time, he has made it clear (hat he was not advocating any alignment w i t h the Soviet Union. Nevertheless, it was quite a novel experience for the people who attend Congress meetings to hear a prominent leader with the courage to openly criticise the U S . Another interesting feature of the speeches has been the sharp criticism It is against this background that of Congress policies which have failed Kamaraj's tour assumes some deeper to bridge the gulf between the rich meaning; it is certainly more than the and the poor. He quite agreed that expression of the desire of a home-spun the poor had ample reason to w i t h the Congress man to go once again among his own feel dissatisfied people. The present leadership of the but, at the same time, they should disCongress in Tamilnad, particularly the play initiative in correcting it and not Chief Minister, certainly cannot be e n - despair by leaving i t . He instructed trusted w i t h the task of projecting a Congressmen to take the lead in exradical innate of the Congress. A l l the pressing the discontent of the people leaders are far too staid, far too caught and organising them for a removal of up in the toils of routine administration their grievances. This should not beto emerge as more than utter medio- come the monopoly of the opposition, crities and as committed to the main- most of whom had no real desire to tactic is the tenance of the status quo. A n d they serve the people. The obvious one of outbidding the opposihave bungled badly in dealing both w i t h tion and of creating the impression the food problem as well as the antithat the Congress has the capacity Hindi agitation, relying only on the for self-correction. Some of the opbureaucracy and failing to take the position parties, at any rate, should people into confidence. take the Congress President at his The Congress President is trying to word and begin asking Congressmen redress the balance. The very fact of to join demonstrations and strikes. Kamaraj has combined this appeal his political tour is a novelty. Congress leaders, as a general rule, never to the poor to look upon the Conbother to take the trouble to launch gress as their own party w i t h advice any k i n d of political campaign except to the capitalists to do the same In the capitalists at the time of the General Elections. Trichy he said that know very well that no other pcrty At best they might utter a few platior can do as much for tudes while opening hospitals or laving has done some foundation stone or the other. them as the Congress. They should These are completely official affairs beware of what their fate would be if in which the general people feel the Congress were really to go down. quite out of place, though they are He added, of course, that the capitalists would have to adjust themselves to forced to attend so as to provide an the fact that socialism was an inevitaaudience. Kamaraj, following the ble destination for India. There could Nehru tradition, is making an effort to be no room for monopolies and glartake politics to the people, to make ing inequalities. These had to go and them aware of national issues. His the capitalists must reconcile themspeeches have dealt with a wide range selves to this fact. of topics and have, on the whole, It is too early to say what exactly tended to emphasise the more pro- this turn towards radical consistency gressive aspects of Congress policy. denotes. It is not too early to know, He has spoken out rather sharply however, what the radicals should do. against the tendency to rely on out- They must work out a concrete, i m side help to defend India against ag- mediate programme on the basis of the gression. In particular, he has assail- general statements of Kamaraj and ed the pro-Americanism of what he confront the Congress w i t h i t , comhas called the capitalist class of India. pelling it to choose, and pulling into He has pointed out that recent events the orbit of struggle the huge mass have shown how unreliable the US can who still cling to i t . be and the discourtesy it can display 841