Land Acquisition

New Land Bill–Some Basic Issues

I Satya Sundaram

Rapid industrialisation certainly places pressure on the available land. For the construction of projects or for developing Special Economic Zones (SEZs), the government has to acquire lands. According to some estimates, the number of people displaced because of land acquisition for projects since independence is around 60 million. Only a third of these people were resettled in a planned manner. Around 60 percent of them are tribal people. The others too are economically poor, belonging mainly to the dalit community.

However, land acquisition has become an important structural constraint on fast industrialisation and improvement in infrastructure. Delays in procuring land have led to cost escalation, affecting development. It needs to be noted that, in many cases, land cost forms a major part of the total cost of the project.

There is no doubt that India needs infrastructure and urbanisation. Fragmented and small holdings have made agriculture uneconomic. Agriculture land needs to be restructured. Imaginative land acquisition policies can foster inclusive growth.

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013 was passed by the Lok Sabha on 29th August, 2013 and by the Rajya Sabha on 4th September, 2013. The salient features of the Bill are : The provisions of the Bill will be applicable for land acquisition upwards 50 acres in urban areas and 100 acres in rural areas.

Compensation for land acquisition will also double in urban areas and will go up by four times in rural areas. The compensation would be just and rational.

Each affected household is provided either employment or given a monthly sum of Rs 2,000 for 20 years, or Rs 5 lakh as a lumpsum. Priority will be given to rehabilitation of the affected families.

Those who lost lands will become partners in the subsequent development of the lands acquired. Efforts will be made to improve the socio-economic conditions of the affected families.

Instead of outright land acquisition, the developers can take land on long term lease. Also, there will be no acquisition of land by force.

The Government promised that all payments relating to land acquisition will be exempted from income tax.
Land acquired for Public Private Partnership (PPP) need 70 percent acceptance, it is 80 percent for lands required by Private Companies.

The Bill is applicable to those who sold land earlier, but did not so far get any compensation.

In the case of scheduled areas, there will be no land acquisition without the approval of the Gram Sabha. Also, land cannot be acquired unless and until compensation is paid in full, and rehabilitation arrangements are made.

The centre suggested to states to impose some limitations on acquisition of agricultural lands to avoid any threat to food security.

If the land is kept idle after acquiring it, the same may be handed over to the original owners.

If the land acquired is sold to any third party, 40 percent of the profit should go to the original land owners.

The new Bill, however, drops resettlement and rehabilitation proposals.

It has been pointed out that the land acquisition policy is inflationary. The prices of land are bound to increase. The government raises the costs of doing business. A substantial cost rise would be passed on to the consumers.

Most of those who lost their lands feel they are getting a raw deal when it comes to compensation. The farmers feel that if their land is put to alternative use, additional value is generated. The extra gain is not shared with the farmers.

Also, low compensation is not the only cause for resistance. The earlier promise made by the government to farmers regarding rehabilitation and settlement have not been fulfilled. The payment of compensation is uncertain and irregular.

The Bill makes no distinction between land acquired for clear-cut public use, and land forcibly taken over for enterprise. As per the Bill, the amount of compensation payable for all kinds of land acquisition should be the same. Justice demands more compensation for acquisition involving a low degree of public interest.

The landowner is harassed in several ways. He is made to run from pillar to post and exhaust his money and energy. The collector estimates the value of the land conservatively, keeps the award pending for a long time so that the landowner cannot move a civil court for higher compensation. By that time, the period for challenging the official estimate lapses. This is only one method of harassment. It is also said that government officials are trying to influence the Gram Sabha and public hearing process in favour of the corporate houses.

When the land is acquired and its use reorganised, the value of the adjacent land goes up many fold. These owners make more money by selling their lands than those whose lands have been acquired. The politically powerful can create this situation to help their friends.

Very often the losers are very poor, with no skills (as in the case of tribal people). With poor bargaining power, they are unable to negotiate with the market forces.

The industry players are not happy with the new Bill, as it is expected to shoot up costs by three to four times, and delay land acquisition. As regards real estate industry, the developers will pass on the higher cost to buyers. The rise in input costs may make infrastructure projects inviable. The new policy will lead to uncertainties of the land acquisition process which will make execution of projects extremely difficult. It will also enhance the role of middlemen.

The clause of mandatory consent of 80 percent for private projects, and 70 percent for PPP projects will delay land acquisition process. Also, the land titles are not clearly documented in India.

Experts say acquisition of even one acre of land would take at least three years. Also, the proposal will have to pass through about a hundred hands. The social impact assessment will be carried out by a committee. It is said that the Bill is pro-bureaucracy and anti-farmer.

Experts feel there must be a regulator for land acquisition for industries and infrastructure—both at the national and state levels thereby avoiding direct transaction between buyers and sellers of land. The transaction should be carried out through an independent regulator for land acquisition to minimise transaction costs. The regulator’s job is to identify agricultural lands for industrial purposes and fix their price and other benefits to land owners.

Some economists have suggested that long land leases are more helpful than outright acquisition of land. However, the present Bill ex-facie ensures a fair compensation to the farmers. The real test is its effective implementation which, however, demands institutional reforms at all levels.

Also, in the case of a land deal between a willing buyer and a willing seller, the transaction should be kept out of the purview of the Land Acquisition Bill. This would quicken the process.

Land acquisition legislation should protect the interests of landowners by paying just compensation, minimise delay in acquiring land, and ensure proper implementation of rehabilitation and resettlement package. A farmer should become a partner of large scale industrialisation and infrastructure development. The efficacy of the much talked about Land Bill can be judged when it is implemented in the field.

Vol. 46, No. 23, Dec 15 -21, 2013

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