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Home > Legislation Related, Parliament related stuff > A balancing Act- The Land Acquisition Bill
A balancing Act- The Land Acquisition Bill
August 29th, 2013 MR Madhavan Leave a comment Go to comments
The Land Acquisition Bill is slated to be taken up for consideration and passing in the Lok Sabha today. The
government had circulated an amendment list in the last session of Parliament. In a column in the Financial
Express, MR Madhavan discusses the major features of the Land Acquisition Bill and the associated issues that
Parliament may need to consider while deliberating on the Bill.
Economic growth and job creation require efficient usage of land resources. It is important that a fair and
transparent process for purchase and for acquisition of land is followed. For the purchase of land, a key concern
is the authenticity of land titles, and the government has drafted a Land Titling Bill for this purpose. In the case of
land acquisition, the following questions need to be addressed. What are the end-uses for which public interests
will trump private property rights, and justify acquisition of land from a person who is not willing to part with it?
What should be the process followed? Since there is no market mechanism of discovery of prices in these cases,
how should compensation be computed? Is there a need to address non-land owners who may be displaced by
the acquisition process? Does the acquisition process get completed in a reasonable amount of time, and is there
finality to the acquisition? In sum, do both sidesthe acquirer and the land ownerperceive the process to be
fair?
The current Bill addresses these questions in the following manner. It defines public purpose to include
infrastructure projects (as defined by the finance ministry, with some exclusions); projects related to agriculture,
agro-processing and cold storage; industrial corridors, mining activities, national investment and manufacturing
zones; government administered or aided educational and research institutions; sports, healthcare, transport and
space programmes. It also enables the government to include other infrastructural facilities to this list after tabling
a notification in Parliament. The significant difference from the current Land Acquisition Act, 1894, is that land
cannot be acquired for use by companies unless they satisfy any of the above end-uses.
The Bill includes a requirement for consent of the land owners in some cases. If the land is acquired for use by a
private company, 80% of land owners need to give consent. If it is for use by a public private partnership (PPP),
70% of the land owners have to agree to the acquisition. The rationale of having differential consent requirements
based on ownershipincluding the lack of any such requirement if the land is for the use of the government or a
public sector undertakingis not clear. Why should a land owner, who is losing his land care, whether the
intended project is to be executed by the government or a private company?
The Bill specifies that the compensation will be computed in the following manner. Three factors are taken into
account: the circle rate according to the Stamp Act; the average of the top 50% of sale deeds registered in the
vicinity in the previous three years; the amount agreed upon, if any, in case of purchase by a private company or
PPP. The higher of these three amounts is multiplied by a factor, which varies from 1 in urban areas to a number
between 1 and 2 in rural areas, depending upon the distance from the urban centre. To this amount, the value of
any fixed assets such as buildings, trees, irrigation channels etc is added. Finally, this figure is doubled (as
solatium, i.e. compensation for the fact that the transaction was made with an unwilling seller). The justification
given for the multiplier ranging from 1 to 2 is that many transactions are registered at a price significantly lower
than the actual value in order to evade taxesthe moot question is whether such under-reporting is uniform
across the country?
The Bill states that all persons who are affected by the project should be rehabilitated and resettled (R&R). The
R&R entitlements for each family includes a house, a one-time allowance, and choice of (a) employment for one
person in the project, (b) one-time payment of R5 lakh, or (c) inflation adjusted annuity of R2,000 per month for
20 years. In addition, the resettlement areas should have infrastructure such as a school, post office, roads,
drainage, drinking water, etc.
The process has several steps. Every acquisition, regardless of size, needs a social impact assessment, which will
be reviewed by an expert committee, and evaluated by the state government. Then a preliminary notification will
be issued, land records will be updated, objections will be heard, rehabilitation and resettlement survey carried
out, and a final declaration of acquisition issued. The owners can then claim compensation, the final award will be
announced, and the possession of the land taken. The total time for this process can last up to 50 months. The
big question is whether this time frame would hinder economic development and the viability of projects?
The Bill provides for an Authority to adjudicate disputes related to measurement of land, compensation payable,
R&R etc, with appeals to be heard by the High Court. There are several restrictions on the land acquired. The
purpose for which land is acquired cannot be changed. If land is not used for five years, it would be transferred
to a land bank or the original owners. Transfer of ownership needs prior permission, and in case of transfer in the
first five years, 40% of capital gains have to be shared with the original owners.
Recent cases of land acquisition have been followed by public protests, and the stalling of the acquisition.
Whereas some of these may be driven by political agendas, the old Act was perceived to be unfair to land
owners in several ways. The challenge for Parliament is to examine the new Bill and craft the law in such a way
that it is fair (and perceived as such) to land owners, while making acquisition feasible and practical for projects
that are required for economic development and other areas of public interest.
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Tags: Bill, compensation, computed, consent, displaced, economic development, end use, ic purpose, land
acqisition, market price, pub, public interest, rehabilitated and resettled, social impact assessment, solatium
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