The commemoration of the 60th year of independent India’s Parliament by all members of both houses of the legislature cutting across party lines on May 13, should have been a gala occasion nationwide. Instead, the festivities were muted and confined to Parliament while the rest of the country introspected upon the reality that contemporary India is a deeply flawed democracy characterised by pervasive corruption and a dysfunctional legal system. Unfortunately, during the past six decades after the then newly independent nation adopted the “socialistic pattern of society”, the socialist man defined by his resentment of private enterprise and property and committed to administration by arbitrary government diktat with scant respect for institutions of governance, has come of age.

 

The precedent for transformation of the people of India — once reputed for their honesty and respect for contract — was set by the newly independent country’s socialist governments. Way back in the early 1950s, a pledge made to the Untied Nations to hold a plebiscite in the Kashmir valley was obfuscated; in 1967, a solemn compact made with the princely families of pre-independence India to pay an annual privy purse in exchange for their accession to the Indian Union was reversed; in 1969 private banks were nationalised without compensation to their shareholders, and the fundamental right to own property was abolished. Simultaneously the Supreme Court was packed with a “committed judiciary” which dutifully endorsed the imposition of the infamous 19-month Emergency of 1975-76.

 

The example set by the Central government of routinely breaking solemn agreements contracted with foreign and domestic investors and businessmen has been dutifully followed by state governments. Multinationals such as Cogentrix in Karnataka, Pohang Steel and Vedanta in Odisha, among others, have been seduced into making large investments only to witness their projects bogged down in procedural red tape which can be cut only by massive bribes and pay-offs. Similarly, government rolls out the red carpet for indigenous entrepreneurs only for it to be quickly substituted with red tape and fine print provisions of mala fide legislation designed to extort bribes from businessmen. This is true even of the education sector.

 

This contempt for the sanctity of contract exhibited by the Central and state governments has rubbed off on the people. These days it is routine for lay citizens and businessmen to renege on payments and contracts, secure in the knowledge that it’s not worthwhile to file money recovery suits in the clogged lower courts. Unsurprisingly, India is ranked No.182 (from among 183 countries) on the parameter of ‘enforceability of contracts’ on the World Bank Group’s Ease of Doing Business Index 2011.

 

Even as Parliament, if not the people, celebrates its diamond jubilee, state-sponsored socialism and the coming of age of the amoral socialist man have imposed a heavy burden upon Indian industry and the economy. And this burden weighs most heavily upon the poorest citizens struggling to survive in a nation of dysfunctional institutions.

Urgent need for new land acquisition act

In most democracies ownership of property is a fundamental right. The right to a roof over one’s head is regarded as precious as the right to life and liberty. Therefore the founding fathers of the Constitution of India enacted ownership of property as a fundamental right (Article 31). However, for mysterious reasons the right of citizens to own property was replaced by the right of the State (government) to compulsorily acquire the property of citizens by the 44th Amendment to the Constitution in 1978. Since then, the property sector has become a bane, a major source of corruption countrywide.

The former chief of the Congress Party in Mumbai, Kripashankar Singh, who began his career as a modest groceries vendor, is being investigated by the police for having amassed property valued at a staggering Rs.350 crore. The Adarsh Cooperative Society on prime land in south Mumbai was registered for the widows of soldiers slain in the Kargil war of 1999, but the highly-subsidised flats of the society have been cornered by senior government officials and army officers. One Maharashtra chief minister has already been forced to resign over his alleged role in this scandal and two former chief ministers are being investigated.

Because of vast powers vested in government officials to acquire and dispose property for undefined “public purposes”, the rot has spread deep. A former Chief Justice of India, K.G. Balakrishnan is accused of having acquired vast benami properties. The charges appear credible enough for the Supreme Court to ask the government to investigate them and take “suitable action”. Two army generals were recently court-martialled for what has become known as the Sukna land scam.

An ingenious strategem devised by politicians and bureaucrats take advantage of their right to acquire citizens’ property ostensibly for public purposes for transfer to cronies and family members, is through fraudulent trusts, SEZs (special economic zones) and yoga ashrams which purchase land at concessional price in return for massive kickbacks.

It is not just the Congress Party, and its allies, who are guilty of dubious property transfer transactions. The BJP government in Himachal Pradesh virtually gifted 19 acres of prime land for a mere Rs.17 lakh for 99 years to Baba Ramdev to promote “yoga, medical tourism and herbal plants”. Likewise Karnataka’s former BJP chief minister B.S. Yeddyurappa has been accused of ‘denotifying’ (exempting from compulsory acquisition) tens of acres of land in and around Bangalore, in favour of his family and business partners.

Following the convenient abolition of the fundamental right to own property, the State (i.e corrupt politicians) can acquire citizens’ property at way below market prices and transfer it to cronies and nominees running suspect trusts, charities and ashrams for vague public purposes. A new Land Acquisition Bill which strictly defines public purpose and makes the purchase of property by individuals, corporates and trusts a bilateral transaction with the Central/state governments playing a mere supervisory role, is urgently required and needs to be speedily enacted.