The bill in this regard had to undergo a lot of changes and is seen as a step in the right direction. A look by K. Sukumaran

With the passing of the Land Acquisition, Rehabilitation and Resettlement Bill by Parliament, a new chapter on the subject of land acquisition will begin in our country.

What is the background of this long pending legislation which has replaced the Land Acquisition Act, 1894, which is termed antiquated and out of sync with the times? Why it has taken so much time? What really prompted this new legislation?

The 1894 Act

This Act was a pre-independent era legislation passed by the British for enabling the Government to acquire land for meeting the needs of industrialisation and in order to assist the promoters of industry and business, incidentally allowing entrepreneurs to possess cheap land in plenty.

With the large scale infrastructure development, setting up of Special Economic Zones in the recent past and in the wake of widespread agitations by farmers in States such as West Bengal, Orissa and Karnataka, the Central Government introduced the present land Bill in Parliament in the year 2011.

The bill had to undergo much changes and had to embrace all aspects of acquisition, payment of fair amount of compensation and even rehabilitation of the owners relating to large areas of land acquired/ proposed to be acquired for development of roads, highways, construction of dams/ irrigation projects etc.

Salient features of the new Bill

Mandatory to obtain prior consent of owners of land – 70 per cent for Private-Public Participation (PPP) projects and 80 per cent for private projects (could be raised to 100 per cent by respective State Governments).

Compensation up to four times the market value of land in rural areas and two times in urban areas.

Provides for leasing of land to developers, instead of sale, so that the ownership will remain with the original land holders and they can also have a regular income by way of lease rent; the terms of lease to be laid down by the State Government according to type of land, location, market rates etc. Original owners of land sold after September 5, 2011 (when the bill was originated) to get 40 per cent of benefits laid down if the land is acquired within three years from the date on which the bill becomes an Act.

(It can be raised to 50 per cent and acquisition up to five years).

Acquisition of multi-crop agricultural land to be limited to five per cent in a district.

Provides for preventing future changes in the schedules of the Bill to dilute provisions of rehabilitation and resettlement benefits.

Major criticism

“Land for land” principle is not universally applicable.

Absence of sufficient protection for small land holders and marginal farmers.

Real estate developers’ concerns like possible steep increase in prices of land for housing projects as two-thirds of cost usually goes for the land, especially in urban areas, have not been addressed.

Industrialists and their associations fear that the cost for setting up industrial establishments will go up by 300 to 400 per cent, and this remains to be taken care of.

Some lobbies fear that the bill may turn out to be anti-growth and many foreign investors may fight shy of coming to India, as land for the projects will be the critical factor.

Rehabilitation may have to wait till the projects come up and generate surpluses and if it has to come first, the project cost will turn out to be burdensome.

Grey areas

Lack of sufficient clarity regarding public purpose

Government’s unquestionable powers for acquisition

Limitations for taking back the land remaining unused

Ceiling for acquisition by government and for direct purchase by private entrepreneurs

Utilisation of compensation

Despite the contradictions, the present legislation is seen as a step in the right direction.