So patently unjust was the colonial era Land Acquisition Act that it is hard not to consider the Land Acquisition, Rehabilitation and Resettlement Bill passed by the Lok Sabha on Thursday a major improvement. The purpose of the original 1894 law was to merely expedite the acquisition of land. Whether it actually does so or not, the new law at least sets out to ensure adequate compensation and rehabilitation. Monetary compensation for acquired land has been pegged at twice the market value in urban areas and four times the market value in rural areas. But it is not clear how the value of rural land located close to designated urban areas will be realistically determined. The new law does well to provide farmers with 20 per cent of their acquired land developed for urbanisation purposes, but is otherwise silent on how the benefits of higher future land values could be shared with all those whose land is acquired. One innovation is the provision allowing the leasing of land for development purposes. This opens the possibility of “acquired” land reverting to the original owner at a later date. Another important clause provides for the rehabilitation of non-landowning individuals who lose their livelihood once the land of others is acquired.
The biggest source of concern, however, remains land acquisition for private or PPP projects. The new law mandates that all the land within an area can be acquired for private projects once at least 80 per cent of the landowners agree to sell. States are free to extend this to 100 per cent consent. Instead of insisting that companies take responsibility for acquiring the land they need for their projects — at whatever price the market demands — just as they do other factors of production, the government will continue to wield its power of eminent domain on their behalf. Of course, this help comes at a cost: the Bill makes the government a mandatory broker. If two private parties want to reach a settlement under the same legal framework of compensation, rehabilitation and resettlement, it will no longer be possible to do so. In fact, some MPs pressed home the point that the Bill could open up avenues for undue rent seeking by officials. The government argues that its role as an arbiter is necessary as the sheer inequality in terms of bargaining power between large corporations and small farmers and other marginalised groups increases the likelihood of unfair agreements. However, historical evidence suggests government agencies end up supporting private companies rather than farmers and marginalised groups in such situations. If the new law doesn’t deliver on its promises, Parliament must be prepared to take another look.