Land Acquisition Act: An Analysis
Acquiring land is a pre-requisite to economic growth and development. And unfortunately, it is one of the most tedious tasks in our country. Projects such as Tata Nano plant in (Singur) West Bengal and Arcelor Steel Plant in Odisha made it to the front page of the newspapers mainly because the projects were scrapped due to problems in acquiring land.
As per Accenture, a consultancy firm, the Gujarat model of land acquisition is the best and can be replicated in other states as well, of course with some amendments. In our article titled, Should other states follow Gujarat’s Land Acquisition model?, CommonFloor had already analysed the positive aspects of the model in question.
Thus, there were lot of expectations from the maiden budget of Modi government regarding amendments in the land acquisition. While a raft of progressive reforms were announced, which will surely give the much-needed fillip to the tumbling realty sector, no light was thrown on this subject whatsoever.
However, soon certain far-reaching changes are expected in the Land Acquisition Act, called in full “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013” to ensure faster approvals. There are plans to dilute the social impact assessment and consent clauses.
Before going further, let’s have a look on the major highlights of the Act.
Now, let’s analyse the problems with the already existing Act.
*To begin with, as per 2011 bill, consent of 80 per cent of the affected families will be mandatory for acquiring any land. Ironically, the bill does not address the issues like the method for taking consent, whose consent is to be taken and above all what if consent cannot be obtained. Clearly, this is an open invitation for never-ending debate.
*As of now, the power to decide whether land acquisition serves a public purpose or not is solely on the bureaucrats. According to the bill, a “social impact assessment” will be done. Apparently there will be a committee, but nobody knows who will be the members of this so-called committee. Currently, it all seems to be farce.
*Another major hitch is that if the purchase of land is above 50 acres in urban areas and 100 acres in rural area, it will allegedly require the rehabilitation and resettlement (R and R) clause. This will in a way have negative impact on private sector participation in creation of new housing projects.
*The acquiring party should compensate the land-owners at the rate of 4 times the market value for rural areas and twice the market value for urban areas. The important point to notice here is that the compensation has to be made up front, before the evacuation takes place. This will obviously increase the cost of a project, which is most likely to pass on to the developers.
*And above all, the main purpose of introducing such a bill is to make the land acquisition process smooth and faster. However,with SIA (though good in intent), this purpose seems to be lost.
*Also there is no system to provide justice to those already displaced because of forceful land acquisition.
What is needed?
The LARR Act in the current form will not benefit the sector as such. Due to SIA, it will lead to increased development cost, which in turn will increase the project cost. It will also result in delays.
To make the Act more useful, recently, state revenue ministers suggested a slew of measures. These include,
*Obtaining consent of land owners and identification of land owners is a tedious task, thus it should either be abolished or reduced to 50 per cent.
*In PPP Projects, the 70 per cent consent should either be abolished or relaxed.
*Social impact assessment should be abolished for smaller projects.
*Section 2 of the Act that talks about the consent of affected families in projects should also be re-examined.
*Clause pertaining to the ‘retrospective clause’, which states that land acquisition proceedings would lapse if compensation is not paid in the specific time-frame should be modified.
What we need is a pragmatic bill. The land acquisition bill in the present form will not solve any problem. Therefore, government should work towards removing the shortcomings to make it more effective, yet safeguarding the interests of the farmers.
Below is the table highlighting the series of important events pertaining to the Land Acquisition Act.
| Year | Updates |
| 1824 | With the sole reason to acquire land for construction of canals, roads and for other public purposes, the British Government first enacted the Regulation I of the land Acquisition Act in whole of the Bengal province. |
| 1850 | When the dictators were busy developing the railway network, legislation on acquiring land was the need of an hour. Therefore, Act VI of 1857 came into the picture, which repealed all the existing enactments relating to the land acquisition. |
| 1894 | Subsequently, Act X of 1870 was enacted which was later replaced by the Land Acquisition Act of 1894, in order to ratify some of the flaws of Act X of 1870. |
| 1947 | In the golden year 1947, when the nation was at the nascent stage, government adopted the 1894 Land Acquisition act— a beautiful piece of legislation, unfortunately with many lacunas. |
| 2003 | The NDA regime, in 2003, brought a Rehabilitation and Resettlement Bill but, unfortunately it lapsed. |
| 2007 | In the backdrop of several political incidents, UPA government also introdiced a bill in 2007, which met the same fate. |
| 2010 | A revised version of the 2007 Bill was re-introduced in 2010. |
| 2011 | – In 2011, Nation’s soul was stirred with the hysteria that was generated by the protest staged by agitated farmers in Noida against the forced land acquisition. It clearly indicated that the acquisition policy that was introduced in 2010 failed to click with farmers. – An act which was almost passé suddenly reanimated into prominence. Finally, to find an amicable solution to the vexed dispute, Government woke up from its deep slumber and on 7 September 2011, Land Acquisition, Rehabilitation and Resettlement Bill (LARR Bill) was introduced in Lok Sabha. LARR seeks to replace Land Acquisition Act of 1894 and bring the much-needed clarity on issues of land acquisition, rehabilitation and resettlement. |
| 2013 | On 29 August 2013 it was passed in the Lok Sabha, then on 4 September 2013 in the Rajya Sabha and finally received the ascent of the President of India, Pranab Mukherjee on 27 September 2013 to become an Act. |
| 2014 | The Act came into force from 1 January 2014. |
