Sunday, March 29, 2015

Land Acquisition Act - Assessment

Purpose: This piece is for working people like us, who don’t have much time or the bent to go through the ennui of reading clauses of acts/ordinances that. But ‘Land Acquisition, Rehabilitation and Resettlement Act, 2013’, I believe, is a serious issue and can have a profound impact. It, therefore, requires us to have informed, independent opinions and not to follow the herd. It merits a rich debate.

Key points:
  • In five areas such as national security, defence, rural infrastructure (e.g. electrification), industrial corridors and housing for the poor – under PPP, the ownership of which lies with the government – mandatory 80% consent clause (meaning consent of 80% of land owners) has been revoked.
  • Impact assessment under LARR Act, 2013 (which is being amended) included landowners and dependents. Both landowners and dependents had to be compensated. Under the proposed amendment, only the landowners need to be compensated.
  • While acquiring land for the five mentioned sectors, fertility of land and suitability for agriculture will not be considered.
  • Under the current regime, there is a LARR Act and there are 13 riders using which LARR can be violated under special circumstances. Under these circumstances, rehabilitation and resettlement is not uniform and depends on decision of state government.
  • Compensation package – 4x the market price for rural and 2x the market price for urban land – remains the same (even for the above mentioned 13 riders).


Up till now, it was all objective, without any inputs/opinion from my side.

My opinion on this issue:
  • Is it necessary? Absolutely. Without enough jobs, the land ownership continues to be divided among inheritors – thus reducing per person income. Migration to cities, towards a worse living standard, continues.
  • Have you visited villages in recent times? Sizeable population in the working age group has migrated to industrial areas as unskilled labourers. This causes increased pressure on resources in the city and to the overall health of the people migrating. Bigger farmers or farmers running with better farming techniques and capital have consolidated and expanded their farmlands. Marginal farmers and landless farmers have moved towards MNREGA.
  • How do you balance acquisition of arable land? Such acquisition has to be compensated, from food production perspective, by increasing irrigation facilities. Arable land should mostly be acquired for developing irrigation facilities. This is the area most prone to corruption and loss of livelihood.
  • What if the Act is used for the wrong reasons? It depends on the intention. But with centralised, uniform system, as compared to a system of special cases and riders, the misuse is reduced and the implementation is consistent. Anyways, states are enacting their versions, in absence of a conducive, central act. As long as the ownership of land is with government and not private players, chances of misuse is less. Furthermore, compensation has to be a lump-sum payment and recurring income for a stipulated time, or an equity stake.
  • Overall intention of LARR Act 2013 was good. But it was not thought through, and was a nightmare from the perspective of all the stakeholders. Even Congress states want the Act to become more conducive for lad acquisition. Just having the heart in the right place does not cut for growth starved nation like India, it has to function properly too.