Subverting a progressive law

The arms of the state have been chipping away at the Land Acquisition, Rehabiliation and Resettlement Act since its enactment in 2013. Hopefully, Parliament will see the Bill and the ‘middle ground’ the government is now attempting for what they really are.

July 09, 2015 01:01 am | Updated December 04, 2021 11:30 pm IST

The government, according to an exclusive report in this daily titled “ >Govt. looking for common ground to break impasse over Land Bill ”, July 5, 2015, has expressed concern over the impasse that has hit the proceedings of the Joint Parliamentary Committee (JPC) on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015. The legislation under consideration aims to amend the Act with the same title and popularly known as the LARR 2013.

The committee members, of the ruling party and the Opposition, are divided on three issues: the “consent clause”, the social impact assessment (SIA), and food security. Several organisations of farmers and agricultural workers, including those belonging to the Sangh Parivar, have already condemned the provisions in the Bill pertaining to these issues.

LARR Act 2013 requires prior consent of 80 per cent of the owners for land acquisition for private projects; in the case of public private partnerships (PPP), the figure is 70 per cent. Besides this, it mandates SIA to assess the costs and benefits of the project, and, therefore, whether land acquisition is in public interest or not. Moreover, the Act restricts the acquisition of irrigated and multi-crop land. In contrast, the Bill proposes to scrap these provisions for defence projects and those belonging to vaguely-defined categories like affordable housing, industrial corridors, and infrastructure including special economic zones, PPPs and urban development projects.

A ‘middle ground’ The JPC stalemate and a growing anti-farmer image have forced the government to offer a “middle ground”. Reportedly, it plans to create a new category of projects called “essential infrastructure” that will be exempted from the consent clause. The remaining projects would require the consent of only 51 per cent of owners. Moreover, the government has agreed to restore a diluted form of SIA that will separate the land acquisition decision from the rehabilitation and resettlement of the people affected by the projects.

We present the findings of a comprehensive fieldwork on the subject, including a factual account of how the nexus of companies and decision-makers has been exploiting hapless farmers under the guise of development projects. The aim is to examine whether the Bill puts a check on the past abuses of the law or will facilitate them further, even if it is amended to incorporate the “middle ground”.

Using agricultural land The case in point is an actual urban development project in the National Capital Region (NCR). In 2004, the State government concerned announced the master plan 2011. This included new sectors drawn over hitherto agricultural land. Sensing an opportunity to make easy money, various builders started approaching farmers. The latter showed no willingness to sell their multi-crop land. However, the builders had many tricks up their sleeve and the authorities played along.

On May 1, 2006, the Urban Development Authority (UDA) concerned issued a notification under Section 4 of the LAA, 1894, to announce acquisition of 638.74 acres of land from five villages in the area. The notification created panic among some farmers and they feared the low compensation under the colonial law. Ignorant of the ploy, many farmers gave away their land to developers at throwaway prices. So, a substantial part of the “under-acquisition” area ended up with the developers.

Once they got hold of the land, the developers managed not only to get it exempted from the scope of this notification but also obtained the “change in land use” licences to undertake housing and other real estate projects.

The UDA kept on releasing land in pockets. On April 30, 2007, the authority issued the second notification for acquisition of 392 acres only. By this time, a total of 246.51 acres got exempted. As if this was not enough, another 88.76 acres were exempted after the second notification!

Still dissatisfied, developers kept on asking for exemptions even after compensation was awarded on April 24, 2009. The saga continued for three years. Eventually, only 304 acres were acquired. Even after six years, most of the acquired land is lying unused. It seems the UDA did not really need such a lot of land.

Anyway, out of 638.74 acres that were to be acquired as per the first notification, more than 50 per cent (334.74 acres) ended up with real estate companies who made a hefty profit.

Unsurprisingly, the farmers made to sell their land under duress felt short-changed. However, the plight of farmers whose land was acquired was worse. The official compensation was Rs.16 lakh per acre. After protracted protests and litigation, these farmers have ended up getting just Rs.42 lakh per acre for land that commands a market price upward of Rs.10.5 crore per acre. The latest auction of a part of the acquired land was settled at Rs.22 crore per acre!

We have hard evidence to back these assertions. However, we chose not to name the UDA as our objective is to contribute to the debate and not to point fingers at any particular State or political party.

Abusing land law Moreover, we have come across several instances in the NCR and elsewhere where the State governments of different political parties have engaged in instances of blatant abuse of the land law — like issuing initial notification for an excessive amount of land, subsequent denotification of land belonging to powerful companies and individuals, and acquisition of multi-crop land even when infertile land is available.

By mandating an SIA of the project and its review by the affected people, LARR 2013 had provided effective safeguards against such malpractices. Any dilution of SIA will reopen the door for abuse of the law. Actually, there is much more to the issue than meets the eye.

Any meaningful attempt at rehabilitation and resettlement requires documentation of people affected by the project and the effects of acquisition on their lives and livelihood. This exercise is carried out as a part of the SIA. Any dilution of the SIA will reduce rehabilitation and resettlement to a mere charade. Specifically, a separation of the land acquisition decision from rehabilitation and resettlement would render the latter a de-jure right with no bite de facto , as was the case with compensation under the Land Acquisition Act 1894. The colonial law entitled the owner to “fair compensation” but separated its payment from the decision to acquire land. The consequence was that people never got their due.

Diluting consent clause The prior consent clause in LARR Act is another sore point for the corporate sector. The truth is that companies are finding it difficult to let go of the benefits of the largesse they habitually enjoyed under the colonial law. Otherwise, there is no justification for diluting the consent clause and creating categories like “essential infrastructure” to permit land acquisition for private entities. Generally, private projects are small-sized for which land can be bought directly from the owners. Also, unlike linear projects, they have locational flexibility. Furthermore, parts of most products can be produced at different locations and assembled later — a practice followed by many foreign manufacturing firms, be they of watches, mobile phones, cars or buses. But, Indian companies want to carry out all their activities at one place, be it Singur or Sanand.

Also, public private partnerships are being used as a tool to get land for real-estate projects disguised as infrastructure. Forceful acquisition cannot be justified for such partnerships, even if the government retains the ownership right over the land. These facts notwithstanding, companies and their sympathisers in the government have blamed the project delays on SIA and the prior consent clause in the LARR. Our study shows that the real cause is something else.

Acquisition without checks Of the 256 projects examined by us, the land was acquired under the LAA 1894 without any scrutiny or hindrance. SIA and rehabilitation and resettlement were simply out of the question. Yet, in an overwhelming number of cases, the government agencies took 1,000 days or more just to make out compensation awards.

At times, the authorities deliberately delayed the acquisition, as was the case with the NCR project. Yet, rather than fix its own infirmities, the government has preferred to make a scapegoat of the pro-farmer features of the 2013 Act.

The arms of the state have been chipping away at the Act since its enactment in 2013. The issue of compensation is another case in point. The Act has increased compensation from 1.3 times to two to four times. The increase was necessary, since due to well-known reasons, the officially determined market rate is a fraction of the actual land price. A study of more than 1,600 Punjab and Haryana High Court judgments (by the first writer) reveals that even at four times, the compensation falls short of the actual market value. Nonetheless, several States including Haryana and Madhya Pradesh have pegged compensation at the lower end of the permissible limits, i.e., two times the official rates. Not satisfied with these attempts at weakening of the law, the Centre has decided to launch a full frontal attack. Hopefully, Parliament will see the Bill and the “middle ground” for what they really are.

(Ram Singh and Deepa A. Panwar are, respectively, Professor of Economics at the Delhi School of Economics, and a faculty member at Symbiosis Law School, Noida. The views expressed are personal.)

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