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Impact of changes in Land Acquisition Act 2013 and options for rehabilitation

Updated on February 28, 2015

The Land Acquisition Act, 1894, was passed during per-independent era by the British to authorize land acquisition by government to accelerate economic growth and develop infra-structure for industrialization. The Bill mandated the process of land acquisition involve a declaration of the land details to be acquired, purpose of purchase and payment of compensation to the land owner at a price fixed by the government. In the recent past, widespread agitations and protests by the farmers raised question marks to certain provisions of bills. Many farmers lost their lives fighting for the justice and appropriate compensation.

Several state governments had to pay a heavy cost for forceful land acquisition as per the provisions of old Land Acquisition Act 1894. Left government lost elections for supporting Tata Motors to set up vehicle manufacturing unit after acquiring land from farmers. Similarly, Uttar Pradesh government also acquired land in western Uttar Pradesh and handed over it to private firms for developing projects on Yamuna Expressway. Land acquired by the Mayavati led Uttar Pradesh government from the farmers at lower rates was sold to private companies later on for various projects.

Real state is figured in the concurrent list and hence both the federal as well as state governments are entitled to make laws for land acquisition. However, a central law shall prevail over the state's in case of a conflict. After enactment of central law, states would be able to frame laws in conformity with the central law but not allowed to reduce the compensation provided by the same. About thirteen land acquisition related laws are enforced in India at this point of time. Central Government introduced the present land Bill in Parliament in the year 2011 aiming to ease the process and safeguard interests of farmers and promoters.However, a number of amendments were suggested by the parliamentarians and accepted by government for incorporation in the bill to pass it in both the houses.

Land Acquisition, Resettlement and Rehabilitation Bill, after accommodating many amendments suggested by various political parties and private bodies, was rechristened as "Right to fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill" and passed on August 30, 2013 by the Lok Sabha. Same Bill is referred in the following paragraphs as 'Land Acquisition Bill'.

Land acquisition bill will be applicable from retrospective effect if no award has been given under the old law. New law will also be applicable if 50 percent farmers have refused to accept compensation and if possession is yet to be taken of the land acquired.Time limit for land acquisition is restricted to one year.

Compensation criteria for land acquisition sets twice to four times compensation for rural land and two times of the market value of the land in urban areas. Compensation will also be given to tenants living off sharecrop above a certain period (defined by the states). State governments may raise the compensation if they wish to do so.

Other provisions of the Land Acquisition Bill allow to return land to the state land bank if land remains unused for five years. Thirteen other laws have to apply the compensation and rehabilitation provisions of the land Acquisition Bill 2013.

The bill had a provision of consent of 80% of land owners and dependents (on land) for acquisition for private industry and PPP projects. Same clause has been modified later removing the consent of dependent on land for livelihood.

Consent of 80% land owners for private industry, and consent of 70% landowners for PPP projects was made mandatory in addition to consent of people dependent on government assigned land.

Land ownership has to be retained by the government in case of PPP projects.Limits sets for consent may be increased by the state governments.

Provision of taking consent of majority of farmers and dependent land owners mandatory intended to protect right of land owners and help them sell their land at a reasonable good price. As per the 1894 legislation, land acquisition was forced upon land owners and they were not asked whether they agreed or not to the acquisition. Changes pursued by BJP government in the new bill introduced during budget session gives right of forced acquisition to government if land acquisition related to five select sectors. It takes away right of the farmer to negotiate the price of owned property. Taking consent of Gram Sabha appears non-justifiable since it may not address financial concerns of the land owners when according its consent for takeover. Representatives of Gram Panchayats may demand facilitation fees for clearing any proposal related to land acquisition if it is being purchased for private industrial projects.

Rajya Sabha amendments: As per the amendments suggested by Rajya Sabha members, law would not apply to irrigation projects requiring environmental impact assessment, drop proposals on rehabilitation and resettlement on land acquired under 1894 land Acquisition Act, be applicable for those beneficiaries who have not yet received the compensation of already acquired land and consent of gram panchayats would be mandatory for acquisition at four times the market rate.

Draft rules: Draft rules have been submitted to the Law Ministry for clearance. As per the draft rules. state governments will have to wrap up within the six months the process of assessing the social impact of a project and getting signed consent letters from land-losers.Compensation process has to be completed within next six months.

Four times compensation in rural areas is attractive proposition. However, determining the market rate may become a hurdle if circle rates are taken as market rate. Market rate is always several times higher than the circle rates.

Applicability of land Acquisition Bill in specific areas like coalfields, gold mines and oil explorable areas may require inclusion of few more amendments to make it beneficial for land owners.

Government has shown its intention of removing the need of social impact study. It is a double edged attack on farming community.Many farming families get displaced due to forced land acquisition and nobody cares afterward for their rehabilitation.

Land acquisition for the purpose of affordable housing is no different from acquiring land for Indira Awas Yojna, Welfare Societies and Cooperative Societies etc. All the sectors being justified by the government in the proposed bill may help government in manipulating the land use to help the private sector.

Other changes intend to do away the clause of social impact study involving public hearings. Government will acquire land to the private players scouting for land to set up hospitals and educational institutions since it has redefined 'public purpose' to include private hospitals and private institutions. Social services being done by the private hospitals and educational institutions are well understood by all.

Land allotted in the past to a well known hospital in Delhi is a good example to illustrate the case of social service rendered by the private groups. Education institutions run by private sector in the past also reveal the social services being done by these institutions. Many private education institutions and hospitals focus only on money churning. Section 101 of the Act is also amended to substitute the words 'time-bound utilization' with 'a period specified for setting up of new project or for five years, whichever is later'.

Allowing change in the land use after land acquisition may help only the private sector. If government acquires land for establishing a plant to produce solar energy and later on allows the company to make alternate use of the land, agenda behind such a move may be to help a private company to misuse the land for other than the intended purpose.

Amicable solution need to be worked out to assure that farmers interests are not compromised and remove the obstacles in the process of land acquisition. Instead of forceful acquisition, land owners must be taken into confidence making consent of at least 50% of owners mandatory. Uses other than the intended ones must be prohibited so that industrialists, builders and non-government organization do not misuse the land for other purposes. A time frame to complete the task with the provisions of one or two extensions must be made mandatory to safeguard the interests of farming community. To make rehabilitation of the displaced families, a proportionate area of land adjacent to project area may be provided and share holding in the project based on the acquired land may be granted to original land owners to make them stake holders.


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