Landgrab as the new face pf the globalization

 Landgrab as the new face of the globalisation

DIMENSIONS of corruption have changed over recent past. Unchecked globalisation and economic development has created a situation where large amount of unaccounted money in the system is chasing limited available assets. This black money is generated through corruption, deficit financing and several welfare scheme freebies.

Major portion of this money is finding its way into real estate sector. Corrupt politicians in connivance with builders and developers' lobby is taking unsuspecting middle-class investors for a ride.

Agriculture land is being acquired from farmers at throwaway prices by the government and is being handed over to builders, develop mega real estate projects and, with the efforts of their brand managers and marketing personnel are selling these dream projects to middle-class investors. Local authorities like the Noida Authority and the Yamuna Expressway, etc, are all part of this package and are now operating as real estate development companies. They are filling the coffers of some of the corrupt politicians.

Once the farmer, whose lands has been acquired, comes to know of these manipulations at a later stage and finds out that his interests has not been protected by the faulty and outdated Land Acquisition Act, they are bound to agitate. This is what is happening in villages like Bhatta Parsaul, etc, near Greater Noida.

Similar is the situation in case of land acquired for mining and industrial development, etc. The economic development of the country also suffers many a times. Land acquisition for industrial purposes has become one of the very contentious issue now. Land acquisition, in principle, is governed by the Land Acquisition Act (LAA) 1894. The Act, despite getting modified in 1967 and 1984 do not address the Rehabilitation and Resettlement of the displaced people. In view of this, the Government of India announced the National Policy on Resettlement and Rehabilitation for Project-Affected Families has to (NPRR) in 2003, which came into force in February 2004. Later, in order to make the NPRR more effective and to make LAA consistent with NRPP, two Bills, viz, Land Acquisition (Amendment) Bill, 2007 and the Rehabilitation and Resettlement Bill, 2007, were prepared but have been kept waiting for the approval of the Parliament.

We immediately need to take correcting action. First and foremost is the passing of the Land Acquisition Act taking into consideration, proper compensation to the farmers not only in monetary terms but securing his future livelihood? Secondly, giving stake in the future profitability of the project and thirdly providing some form of employment for the family.

To secure the interest of the investors and control the real estate development lobby, there has to be a Regulatory Authority, which will examine all schemes, check all disclosures regarding promises and risk factors and also see whether these are backed by proper legal documents. It also has to ensure that developer's lobby delivers on their promises and in case there is any dereliction, then investor's interest are properly protected and they are duly compensated.

The third very important aspect from the point of view of the economy is that, this nexus of real estate developers, corrupt politicians and their Public Private Partnership (PPP) projects should be checked for creation of black money through corrupt means. Otherwise, over a period of time, real estate bubble will be created and will lead to unprecedented problems in our economy. This asset bubble is also the result of deficit financing of the government. In its recent release Reuters has reported that, emerging economies such as Brazil and India would face fiscal and current account deficits and a crisis similar to global meltdown is inevitable.

Recent chain of events and reports are pointing towards this menace whether it is farmers agitation in UP or Naxal unrest in various other parts of the country. We need to immediately act on these issues and check this corrupt practice.

Recovery of money stashed in foreign countries

 Recovery of money stashed in foreign countries

The generation and parking of this money in foreign countries are very closely related. The money which is parked in tax havens can be brought back only if we get proper information about the accounts being held in those countries. Ratification of UNCAC was one of the important requirements towards our empowerment of exchange of information. But these tax havens are not bound to divulge information unless these account holders are proved holding criminal money.

RECENT months have witnessed allegations of corruption of unprecedented levels. Dimensions of corruption have changed over past. Unchecked globalisation and economic development have created a situation where large amount of unaccounted money is being generated and is chasing limited available assets. This black money is generated through corruption, deficit financing and several welfare scheme freebies.

Another very important aspect from the point of view of the economy is that this nexus of corrupt business class, real estate developers, corrupt politicians, bureaucrats, and their Public Private Partnership (PPP) projects and NGO's needs to be checked for the creation of black money. Otherwise over a period of time, it will lead to unprecedented problems in our economy. Some international reports have also stated that, emerging economies such as India are bound to face fiscal destabilisation and a crisis similar to the global meltdown.

Several well-meaning organisations and individuals are doing their lot to check this rot. They have come out with several documents to check this menace. One of the primary concerns of the people is the large amount of unaccounted money stashed in foreign countries and ways and means to bring it back.

The generation and parking of this money in foreign countries are very closely related. The money which is parked in tax havens can be brought back only if we get proper information about the accounts being held in those countries. Ratification of UNCAC was one of the important requirements towards our empowerment of exchange of information. But these tax havens are not bound to divulge information unless these account holders are proved holding criminal money. We are in catch 22 situation: unless we know the identity, we can't prove it to be criminal money. These tax havens will not divulge information under tax evasion issue as they have zero tax liability and therefore tax evasion is not a crime in these countries.

They will never provide information under Double Taxation Avoidance Agreement (DTAA). I suggest that we can use the Floating Warrant Concept as was successfully done in USA known as John Doe Lawsuit. A John Doe Summons is any summons where the name of the culprit under investigation is unknown and therefore not specifically identified. A summons of this nature can only be served after approval by a court.

 As we lack provisions relating to proving money stashed in tax havens as criminal money, we can use this warrant. We know that the money stashed in foreign countries can be classified into three categories: money accumulated through corruption, money generated through drug trafficking, terrorism or crime-related activities, and the third category is the tax evasion. The identity of the culprit is not known to us therefore, we have to issue a Floating Warrant on the unknown person. Based on the warrant, the person whose account is in the foreign country can be declared as an offender and the information regarding him can be demanded. The warrant gets fixed on the person at a later stage when his identity becomes known. With this, foreign countries will be bound under the UNCAC agreement to divulge information of these accounts. The information received through this process will not be classified as secret and therefore the government will be free to share it with public and other law enforcement agencies.

In relation to generation and prevention of corruption, one major gap in our domestic law is the prevention of bribery in the private and NGO sector. In all our existing laws regarding corruption, one party has to be government employee or a political person. The United Nations Convention Against Corruption (UNCAC) has also identified these gaps. Our provisions lack mispricing and valuation of contracts and licenses. The definition regarding gratification and bribery through third party is not clear. Lobbying and influencing decision through public policy debate is not covered under corruption clearly. This year's official revenue foregone figures in our Budget is to the tune of Rs 5,11,630 crores in the form of tax concessions and therefore leaves a lot of scope for manipulations. We have also not defined code of conduct, rules, regulations, and guidelines to be put in place by private sector to check and control bribery. Our laws do not enforce prevention of bribing of foreign nationals.

To tackle these issues effectively we have come out with a specific legal provisions in the form of draft 'Prevention of Bribery in private/NGO sector bill' clearly defining all these terms and provisions.

Besides these provisions, this draft bill defines 'Bribe' as facilitation payments, directly or through third parties, including gift and hospitality expenses whenever they could affect the outcome of business transactions and are not reasonable. It says that a person shall be guilty of an offence of giving bribe, when committed intentionally in the course of economic, financial or commercial activities when it is established that there is a promise, offering or giving, directly or indirectly, of an undue advantage to any person who directs or works, in any capacity, for a commercial entity, for the person himself or herself or for another person, in order that he or she, in breach of his or her duties, act or refrain from acting. It also covers solicitation or acceptance, of an undue advantage, for the person himself or herself or for another person.

The draft bill states that, the bribe becomes extortion when this demand is accompanied by threats that endanger the personal integrity or the life of the private actors involved, otherwise it takes the form of speed money. Speed money is the bribe given for expediting approvals and for providing services. The draft provides protection as a whistle-blower in case of the extortionist bribe.

This draft puts an obligation on a commercial entity to make adequate procedures, designed to prevent persons associated with it from undertaking bribery. And clearly defines the code of conduct to be put in place by the commercial entity. These procedures provide for commercial entities to establish and ensure the effectiveness of internal controls and compliance measures for preventing and detecting bribery.

We strongly suggest that these two concepts should be thoroughly discussed and considered for immediate implementation. We already had several rounds of discussion with business associations, lawyers, professionals and civil activist where these concepts have found favour.

Gopal Krishna Agarwal is the National spokesperson of the Bharatiya Janata Party on economic affairs. 

Don't pauprise farmers

 Don't pauperise farmers

By Gopal K Agarwal,

Agricultural land is being acquired from farmers at throwaway prices by the Government and is being handed over to builders, who are developing mega projects and selling them to middle-class investors. In the process, the farmer is the ultimate loser

Dimensions of corruption have changed the recent past. over Unchecked globalisation and eco- nomic development have created a situa tion where large amounts of unaccount ed money are chasing limited available assets. This black money is generated through corruption, deficit financing and several welfare scheme freebies.

The major portion of this money is find ing its way into the real estate sector. Corrupt politicians, Ministers and bureaucrats, in connivance with builders and developers, are exploiting gullible middle class investors who dream of owning a house.

Agricultural land is being acquired from farmers at throwaway prices by the Government and is being handed over to builders, who are developing mega projects and, with the efforts of their brand managers, dream-sellers and marketing personnel are selling them to middle-class investors. Local authorities are part of this racket and are now operating as real estate development companies. They are helping fill the coffers of some corrupt politicians.

When farmers whose land has been acquired come to know of these manipulations at a later stage and find out that their interests have not been protected by the faulty and outdated Land Acquisition Act, they are bound to agitate. This is what is happening in villages like Bhatta- Parsaul near Greater Noida. And if any corrective action takes place under pressure from courts or due to the agitation of the local people, leading to cancellation of these projects, then the middle-class investor's money goes down the drain

Similar is the situation in the case of land acquired for mining and industrial development. The economic develop- ment of the country also suffers. Land acquisition for industrial purposes has become one of the very contentious issues now. Land acquisition, in principle, is governed the by the Land Acquisition Act of 1894. The Act, despite getting amended in 1967 and 1984, does not address the twin issues of rehabilitation and resettlement of the displaced people In view of this, the Government of India announced the National Policy on Resettlement and Rehabilitation on Project-Affected Families in 2003, which came into force in February 2004. Later, in order to make the policy more effective and the Act consistent with it. two Billsendmete Bill. 2007. and the Land Acquisition Rehabilitation and Resettlement Bill. 2007- were drafted but have been kept pending without being put up to Parliament.

 The Government must immediately take corrective measures. Foremost is the need to pass an amended Land Acquisition Act, taking into considera son proper compensation for farmers het only in monetary terms but also secar ing their livelihood. This can be done by paying compensation in installments over a longer duration, giving farmers a stake in the future profitability of the development project, and providing some form of employment for the fam ilies of those losing land.

To secure the interests of investors and control the real estate development lobby there has to be a regulatory authority which will scrutinise all schemes, check disclosures regarding promises and risk factors, and make sure these are backed by proper legal documents. It also has to ensure that developers deliver on their promises and in the event of any derelic tion, investor interests are properly protected and they are dady compensated.

 An important sepect from the point of view of the national econnerry is the need to break the nexus between real estate developers, corrupt politicians and their Public Private Partnership protects which generate black monry through cor rupt means. Otherwise, over a period of time, a real estate bubble will be created and will lead to unprecedented problems in our economy.

This asset bubble is also the result of the deficit financing to which the Government resorts every year. Experts have said that emerging economies such as Brazil and India face fiscal and current account deficits and a crisis similar to the one triggered by the global financial meltdown is inevitable.

The recent chain of events whether it is the farmers' agitation in Uttar Pradesh or the Maoist insurgency in various other parts of the country, reflect this point. We must immediately act on these issues and check this particular corrupt practice