Farmers Unlikely Victims

No Money & No Will

Rajasthan's Delay, Gujarat's Gain

What Lies Ahead For Rajasthan?

Times View

Billed as the biggest industrial project in Rajasthan, Delhi-Mumbai Industrial corridor DMIC ) today is star ing at an uncertain future in the state. Even after five years since the land acquisition process started, the state government doesn't have even a single acre in its possession. In the absence of land, the project has been a non-starter in the state, which was supposed to gain the most among the six states sharing the corridor.On the other hand, states like Gujarat that occupies 38% of the dedicated freight corridor (DFC), Maharashtra, Madhya Pradesh, Uttar Pradesh and Haryana, have made significant progress in implementing the project. In fact, it was the landlocked Rajasthan that needed access to ports more than Gujarat or Mumbai.The $100 billion dollar project is being built along the highspeed DFC that would reduce the time for goods movement between Dadri near Delhi to Jawaharlal Nehru Port in Mumbai from current 14 days to about 14 hours. The longest stretch of the 1483 km route (about 39%) passes through the desert state that has struggled to win investors' interest due to its infrastructure constraints.The government's nonchalant attitude to the project has not only impeded industrial development, but also taken a toll on the farmers who have agreed to sell land without a protest. Unlike many industrial projects where landowners have revolted against land acquisition, farmers in the industrially developed Bhiwadi and Neemrana region often travel to Jaipur to request the government for taking the land in its possession and release the compensation. But it seems the government has neither the money nor the will to tie up the funds.Land acquisition process for Khuskhera-Bhiwadi-Neemrana (KBN) Industrial Smart City started in 2012. But it was only in April 2015, the government was able to declare compensation of Rs 3000 crore for 1425 hectare.At that time, it came as a relief for the distressed farmers who even in emergency situations could not sell the land to other people as the government imposed prohibition orders in 2013.They thought they would get the money any time soon. But it's been more than two years since then and the government is yet to disburse the money.“Whenever we approach the officials concerned, they say that the money will be given to them in a month or two. But that has not happened for the past two years. People cannot sell their land because of the government rules. In emergency situations, the only option left for them is to go to the money lenders who charge hefty interest rates.There is no lack of demand for land in our area (Bhiwadi-Neemrana). If the government does not have money, they should vacate the prohibition orders,“ says Harkesh Dhanka, sarpanch of Shahjahanpur.Some landowners in the area said the Master Plan of the DMIC area has enough scope for residential development. If the government offers land for developed land (about 25% of the acquired area), and gives tradable warrants of rights for the developed land to the villagers, they can sell or trade the land to meet their financial obligations.It was about a year ago the government started negotiations with central government-owned Housing and Urban Development Company Ltd (HUDCO) for a loan to disburse the compensation to the farmers. Even though Rs 3,000 crore has been estimated for the 1425 hectare land, officers in the state nodal agency for DMIC in Jaipur said the amount could be much less as they feel that many of the landowners would like to opt for developed land instead of cash compensation. That would reduce the burden on the state.Here also, the government has no plan to start the land for land process. “HUDCO is a shareholder in the project and getting a loan for the same project would not be a very difficult task. Additionally , Neemrana is included in the `decongestion plans for Delhi' and loan can also be arranged from NCR planning board as well. It seems the government does not have a will for the project. Even if the fiscal health of the state is not all that good and there is an urgency to tie up funds for the implementation of 7th Pay Commission, they cannot ignore this project,“ said an industrialist in Neemrana, preferring anonymity.An analysis of the pace of devel opment in the six states sharing the DMIC shows that Rajasthan has been left behind by miles by other states, especially Gujarat. In the first phase of the DMIC project, eight investment regions or industrial cities have been identified for development including two in Rajasthan and the first being KBN. In the first phase of these projects, the state governments acquire land for projects and form special purpose vehicles with DMIC Trust for each of them. In each SPV , while land becomes the equity of the state or local body, DMIC Trust provides funds as part of its equity to develop trunk infrastructure.As per the DMIDC annual report, Dholera Special Investment Region is moving ahead towards implementation as the Gujarat government has completed land acquisition, formed SPV , approved town planning, appointed project managers and received environment clearances. The DMIC Trust has cleared Rs 250 crore as its initial equity to the project. In Rajasthan, KBN investment region is yet to complete any of these exercises.Apart from the Special Investment Region Act, and approval of the master plan, there is nothing to write home about for the state.Like Gujarat, Maharashtra has also formed SPV for Shendra-Bidkin Industrial Park enabling it to receive equity funding from DMIC Trust.Despite farmer protests, the MP government has acquired land for its Pithampur-DharMhow Investment Region. The state has already formed a number of SPVs for projects in the region. Similar is the case with other states which are at advanced stages for carrying out development of trunk infrastructure.After the trunk infrastructure gets developed, these new manufacturing and industrial smart cities will be open for both domestic and overseas investors.Since these cities will have huge capacity for absorption of investments, there will be competition among the states to get off the block quickly to attract big investors early on. Those who manage to develop the trunk infrastructure first, they will be at a significant advantage. Given their seriousness in implementing the projects, Gujarat, Maharashtra, and MP will be well-positioned to become the first beneficiaries and will continue to build on evolving ecosystem for industrial development. For a late starter like Rajasthan, it will not be easy.The state will have to wait for a spillover scenario and it may take decades for that to happen.Once the region attracts private investment, then only there will be scope for Rajasthan to service the debt it would take for land acquisition.“The DMIC project in Rajasthan has already missed the bus. It won't be easy from here on. If it wants to salvage some ground, however little it may be, it has to act now and take the land in possession. It now needs to work overtime,“ said Dheeraj Sharma, another businessman in Neemrana.No industry event goes without an elaborate presentation on the potential of DMIC in transforming the industrial landscape of the desert state. Be it chief minister Vasundhara Raje, state's bureaucrats, industry bodies or the builders, everybody loves to publicize DMIC to woo investors. Even the proposed refinery in Barmer does not get the same billing, as the business community still considers it as a political announcement. Despite being a serious project monitored by the PMO, DMIC is not paid the same amount of attention as the refinery because the former is electorally unyielding.When the BJP government came to power in 2013, it promised to put Rajasthan in the league of developed states and DMIC could have been the launchpad pad for that vision. Unfortunately, the government has missed that opportunity. The state can still mobilise the funds for acquiring land because the estimated Rs 3000 crore for 1425 hectare could be much less if land for developed land formula pushed. But it requires political will, which is missing now. Rajasthan has already lost advantage to other states. If the government does not act now, the dream project will remain a daydream.