Arvind Panagariya

Legend has it that 2,500 years ago to the year, when Darius the Great invaded Scythia, retreating Scythians destroyed food supplies and poisoned the wells. Starved and dehydrated, a large number of soldiers in Darius’s army died and he eventually conceded defeat.
The only plausible interpretation of the actions byCongress in the last several months is that it has adopted this scorched earth strategy as it retreats from government. Its recent actions seem to serve one principal purpose: make the restoration of growth and the task of rebuilding the nation as difficult as possible for the successor government.
The greater the failure of the successor government, the better would the outgoing government look by comparison. Ironically, the most pernicious act of the Congress-led United Progressive Alliance (UPA) government is related directly to land: the new land acquisition act.
The latter administers an all-round preemptive blow to efforts of a future government to put India back on its feet. For most public projects, the act makes land acquisition such a long-drawn-out affair and land prices so high that only a handful of projects will remain economically viable and capable of being implemented.
A recent report in this newspaper has this to say about the act: “The new land acquisition law that came into force this January, touted as one of the signal achievements of the UPA government, is turning into a major obstacle in the way of a key infrastructure project being pushed keenly by the Prime Minister’s Office.” The report goes on to describe how cost of land required to build the Delhi-Jaipur Expressway has trebled to Rs 18,000 crore, with total cost rising to a gigantic Rs 32,000 crore as a result of the money that must be paid as compensation for the land on which the highway is to be built.
The government is now back to the drawing board to figure how the project can be made viable. Even building rural roads under Pradhan Mantri’s Gram Sadak Yojana (PMGSY), a programme expressly meant to aid India’s rural poor, will turn into a nightmare.
And this will be in the name of protecting ‘poor’ landowners, notwithstanding the fact that land reform has had little success in India. Except in a handful of states, much of the land is actually owned by large and wealthy farmers.
The new land acquisition act will also make already hard to implement large-scale private projects yet harder to implement. All the provisions of the new act on compensation apply to all private acquisitions of 50 acres of land in urban and 100 acres in rural areas.
According to some calculations, this would render land an order of magnitude more expensive in almost all locations in India than in any other country on the face of the earth. This is why entrepreneurs looking for land will first look on Mars before doing so in India.
Sadly, the national leadership of Bharatiya Janata Party’s (BJP), which loathed the idea of Gujarat chief minister Narendra Modi coming to rule at the Centre for fear that he would destroy the cozy existence it has enjoyed for the last decade even sitting in opposition, unwittingly and shortsightedly aided UPA in scorching the earth. It went on to vote for nearly every populist bill UPA brought to the floor of Parliament without stopping to think that it, and not UPA, might have to live with the consequences. But now that the chances of a Modi victory look bright, it will find out how it has shot itself in the foot.
UPA sins do not end with the land acquisition act. Appointment of the Seventh Pay Commission and hike in subsidised gas cylinders from 9 to 12 are part of the same strategy.
So also the increase in MNREGA wage to Rs 175 per day on average and the last-minute attempt to raise dearness allowance to 100% of the base salary, notwithstanding the fact that it was raised to 90% only this past July.
But perhaps the worst poison pill is UPA’s attempt to push as many as nine ordinances and clear vast numbers of projects on literally the last possible day before Election Commission’s Model Code of Conduct was expected to kick in. Only sage advice from the president held back the government’s hand from pushing the vast majority of these ordinances.
Even so, it was not deterred from introducing reservation for the 90 million-strong Jat community in nine states in central government jobs and admissions to central educational institutions — and from granting special category status to the newly-created Seemandhra state for five years.
Rarely has a democratic government consciously inflicted such damage on the nation at its exit.
The writer is professor of Indian political economy at Columbia University