The new government seems to be in a rush to pass the necessary economic reforms, which are much needed at this hour. The Prime Minister has promised a new vision for India and has launched many innovative scheme aimed at bolstering India economically, socially and culturally. Most of these measures and schemes have been met with good response, but one measure that seems to have surprised everyone across the country is the introduction of the new land acquisition law. A new bill has been introduced which aims at amending certain provisions of The Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement(LARR) Act, 2013. This law was passed by the previous government, aimed at repealing and consolidating old land acquisition laws. It was specifically passed to do away with forcible acquisition of rural land, and to provide for adequate resettlement and rehabilitation of people who have been evicted.
The word “land” cannot be taken in its literal sense in India. It is much more than a plot to a large section of the society. These lands have been passed upon them by their ancestors and have socio-cultural importance for them. A person with a large amount of land commands tremendous respect in a largely agrarian rural society. There are many who may be considered as well to do but are largely dependent on their lands for income and accommodation. Most of these people do not have other skills to enter into a new profession. Take the National Capital Region for example, with economic boom and increased demand for land for Multi-National Companies, a large number of farmers in Gurgaon, Haryana sold their lands at huge prices. Initially, these farmers became very rich and could be seen flaunting their new found wealth. However, with no source of regular income, their wealth was squandered away and slowly they found themselves at the mercy of these organisations for jobs like security guards, drivers and bouncers. Some of them even chose to join criminal gangs. Most of them were paid compensation amounting to millions and were even promised high-paying jobs in the business complexes that were going to be set up. However, they soon found themselves facing a completely different society who considered them as “outsiders”. Such experiences are the reason that many choose to work on their lands instead of selling them. Land acquisition process has often resulted in violent backlash in India. The proposal to setup TATA Nano production plant in West Bengal was met with such a violent reaction backed by certain political parties and Naxalites that the company choose to shift it to Gujarat which is said to have a business-friendly environment. The land acquisition process for Yamuna Express Highway, Noida Luxury Flats and Special Economic Zones has always been met with violent protests. While the authorities have usually claimed that such agitations are work of vested interests that are hindering economic development, many have blamed the unwillingness of authorities and business organisations to settle for a fair compensation. Under the law of 1894(which was repealed by 2013) Act, the District Collector was the nodal authority for acquiring land. He would also decide the compensation to be paid, which could be revised by the political executive of the State. Initially, such compensation used to be a meagre amount as people would think that their land was of not much value. However, with increasing awareness, people have realised the true value of their land and won’t do away with it without a fight.
No one can deny the need for land in economic development. To accelerate the foreign investment in the country, concept of Special Economic Zones was developed. Lands were to be given at a very cheap rate to foreign investors, taxes were to be kept at minimal rates, water and electricity was to be given free and municipal laws were not to be enforced in these zones. While some of these zones are doing well, others are in total chaos. Many have gone to the court against such land acquisition and this has also created an uncertain environment for doing business in India. It is estimated that projects worth billions are trapped in litigation and administrative hurdles. The Act of 2013 was widely held as progressive for farmer and rural land holders and disastrous for business environment in the country. This Act said that 80% consent to be taken in case of private projects and 70% consent to be taken in case of government projects. The consent was to be taken of the affected families with a village area. The act in Section 4 says that when the appropriate government intends to acquire land for public purpose, it shall consult the concerned panchayat, municipality, that is, the local government; and carry out an SIA study in consultation with them. So this in effect means that the acquiring government itself would be the authority (along with the local government) that will do the SIA.(social impact assessment). Further, it is said that the SIA shall include, besides other things, an estimate of the number of families that are likely to be affected and displaced. It will also engage in a study of the “social impact of the project and the nature of cost of addressing them and the impact of those costs on the overall costs of the project vis-à-vis the benefits of the project”. It also provided for a compulsory settlement package and the procedures for it. The possession of land could not be granted until evicted people were given settlement package to their satisfaction and certificate to this effect was to be given. An urgency clause was provided for emergency requirements like wars, floods and other national disasters. It further stated that highways, railways and metro projects would be covered by their respective legislations, which meant the provisions of this law would not be applicable to such projects. A cap was imposed on acquisition of agricultural land to take care of food security. The power of District Collector was reduced and advisory boards have been set up at State and National Level. The Bill states that the period after which unutilised land will need to be returned will be: (i) five years, or (ii) any period specified at the time of setting up the project, whichever is later.
This law was repealed by an ordinance of the new government. Under this ordinance, social impact assessment and requirement of consent clause was done away with certain categories of projects namely (i) defence, (ii) rural infrastructure, (iii) affordable housing, (iv) industrial corridors, and (v) infrastructure projects including Public Private Partnership (PPP) projects where the government owns the land. A key change in the ordinance is that the higher compensation and rehabilitation and resettlement package would also apply to the 13 exempted legislations namely Land Acquisition (Mines) Act 1885, Atomic Energy Act, 1962, Railway Act 1989, National Highways Act 1956 and Metro Railways (Construction of Works) Act, 1978, which means that evicted people can claim fair compensation and rehabilitation packages for these important national projects.
For the time being, the Bill seems to be stuck in the Parliament as the Modi government does not have the required majority in the upper house for getting the bill approved. It might have to rely on the ordinances but it would not be in national interest. It could lead to an atmosphere of uncertainty which could hinder foreign investment, which is very crucial at this stage for India. At the same time, concerns of landholders, especially farmers, should be looked into and the Bill must be passed after consulting all stakeholders. It could be disastrous for the government if it passes the Bill in a hurry, as it can cause massive social unrest and further erode investors’ confidence.
Modi’s Economic Reforms Agenda In India Hits Biggest Roadblock — Land Forbes, Forbes, (Apr. 22, 2015), http://www.forbes.com/sites/saritharai/2015/04/22/modis-economic-reforms-agenda-in-india-hits-biggest-roadblock-land/.
Shishir Asthana,Land Acquisition Act: Right step, wrong route, Business Standard, (Dec. 31, 2014), http://www.business-standard.com/article/economy-policy/land-acquisition-act-right-step-wrong-route-114123100115_1.html.
 Sahi Makkar, Land acquisition continues alongside debate on new Bill, Business Standard, (Apr. 23, 2015), http://www.business-standard.com/article/economy-policy/land-acquisition-continues-alongside-debate-on-new-bill-115042300005_1.html.
All you wanted to know about new land acquisition Bill, Livemint, (Aug. 30. 2013), http://www.livemint.com/Politics/FXZ9CrJApxRowyzLd8mb2O/All-you-wanted-to-know-about-new-land-acquisition-Bill.html
The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015, PRS India, http://www.prsindia.org/billtrack/the-right-to-fair-compensation-and-transparency-in-land-acquisition-rehabilitation-and-resettlement-amendment-bill-2015-3649/
About the Author:
He is currently pursuing B.A.LLB (Hons) from National Law Institute University, Bhopal. He has also completed diploma in Cyber Law from Asian School of Cyber Laws, Pune. He has wide experience in interning with various organizations such as Central Information Commission, Adhrit Foundation, Alexis Foundation and Your Kamaan. He has undergone internships with different laws firms and has observed the proceedings of various tribunals and courts. He is also a researcher with various online law portals and regularly writes articles for them. He has also published several blogs on different legal issues. He has been involved in organizing events at his college and was also a member of the Managerial Board, NLIU Journal of Intellectual Property. He has actively participated in several quiz competitions.
Archit has been recognized by various magazines such as Competition Success Review and Pratiyogita Darpan for his writing skills and regularly publishes his essays in these magazines. His interest lies in Criminal Law, Constitutional Law and Intellectual Property Law.