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Is Land Acquisition A Problem In India?

Updated: March 28, 2015 11:43 am

The Ordinance empowers the central government and the state governments to exempt the project lands from the provisions of social impact assessment if the land to be acquired for the purpose of defence, rural infrastructure, including electrification, affordable housing and housing for the poor people, industrial corridors, infrastructure and social infrastructure in cases of involvement of government land in full

Land acquisition has always been projected as problem in industrial development by the industry lobby. In a developing country like India, one cannot overlook the interests of farmers and rural people, who constitute about 70 per cent of the population of India and depend mainly on agricultural land. Therefore, a balance has to be struck between the two conflicting interests so that everyone gains. The UPI-II government at the centre got passed the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013, to meet the long standing demands of the land-losers and to undo injustice done to them for long.

The Voluntary Guidelines of FAO, United Nations also suggest that the land banks should be set up to facilitate the acquisition of private lands for public projects and to provide affected owners, farmers and small-scale food producers with land in compensation that will allow them to continue and even increase production.

The Act, 2013, provided a humane, participative informed and transparent process for land acquisition for the industrialists so that the cumulative outcome of compulsory land acquisition should be, that affected persons become partners in development. The Act, inter alia provided following safeguards to the owners of the lands:

  • The land can be acquired for private companies only after the consent of 80 per cent of families affected. In case of public private partnership projects, the prior consent of at least 70 per cent of the affected families must be through resolution of the respective Gram Sabha/Municipal Body.
  • There is a compulsory requirement of social impact assessment if land is acquired by the government and not by private companies.
  • There is need for resettlement and rehabilitation plan to be prepared if the land is acquired beyond a limit fixed by the central or state government in appropriate cases.
  • Only minimum land can be acquired for the industry.
  • The compensation awarded will be at least twice the market value for rural and urban areas plus resettlement and rehabilitation cost etc. If the land in rural areas falls within distance from urban areas as notified by the government, it may go upto four times plus resettlement and re-habilitation cost.

Let us now analyse how the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014 by the Modi government addresses these concerns of the industry. The Ordinance doesn’t do away with the requirement of consent of local people or affected families. The Ordinance empowers the central government. and the state governments to exempt the project lands from the provisions of social impact assessment if the land to be acquired for the purpose of defence, rural infrastructure including electrification, affordable housing and housing for the poor people, industrial corridors, infrastructure and social infrastructure in cases of involvement of government land in full. It is hoped that affordable housing will not extend to the large real estate sector of the economy and is confined to the housing for the lowermiddle class or economically weaker sections of the society. The real estate sector doesn’t have a good reputation among masses. The exemption of electrification seems to be special fascination of the Prime Minister Narendra Modi, which will of course, will not involve much of the land to be acquired. However, rural infrastructure should be confined to schemes by the governments. The non-application of Chapter-III for land acquisition is debatable because the provisions were related to the food security in India. There were already adequate exceptions under the proviso of the Section 10 (Chapter-III) ending with the word “and the like”. As it is left on the discretion of the appropriate government, this change is also not very dangerous.

The requirement of resettlement and rehabilitation has not been dispensed with and is still enforceable. Provisions regarding minimum compensation are intact as per the main Act, 2013 in its First Schedule. The proposed new project has been given further time for execution beyond five years, and is extended upto the period specified in the project. After that the land will go back to the original owner or owners or to the land bank to be set up hereafter. The Amendment to Section 105 is good because it has enforced the promises of payment of hefty compensation with effect from 1st January, 2015.

However, the last part of the Ordinance is not understandable why the fast government like the Modi Government has extended the period to remove difficulties to five years. There is good amendment from private company to the ‘private entity’. There is no legal definition of private company.



From the foregoing discussions, it seems that the Ordinance doesn’t play much with the interests of the farmers. However, the local people need to be suitably informed about the proposals of land acquisition in their locality. As of now, their objections are routinely heard and are rejected in the name of public interest. In Japan and in all Japan-aided projects in India, the social impact assessment is invariably done so that the projects will not have to face public wrath or public agitation later on. Now-a-days, no project can be successful unless it has a local support. However, in the larger public interests, objections by few or by the vested interests should be overlooked and for that purpose consent of 80 per cent is an indicator that people welcome the proposal. It has been seen in the past that a handful of people always try to halt or delay the project which cannot be allowed in the present fast moving world. The state government or central government can always reduce the rate of compensation by notifying the distance of land to be acquired from the urban areas as per First Schedule of the Act, 2013.

The private entities can purchase the land on their own if the compensation prescribed is very high. After the independence, the land acquired for private companies was an exception. Now, it has become a rule because Indian economy is now changing from agricultural to the industrial or service economy. This cannot be blindly supported because ultimately evergreen agriculture sector comes to the rescue of the economy and the country. No modern management system can ensure movement of food grains to 125 crore people. However, we cannot afford to have the village-based confined economy also. But we have to protect multiple cropping land also. The industrialists will find alternative lands. They cannot dictate to governments nor farmers can dictate high rate of compensation of the farmers lands. However they have a genuine right to claim for alternative land for cultivation in lieu of their lands lost in projects.

This should be ensured because after the receipt of compensation, the land-losers, become unemployed, landless and the homeless as they squander away the compensation money in ostentatious living in few years only. If government cannot do it, they can take help of NGOs. However, if one provision regarding availability of minimum land for the public-oriented project is implemented, it will serve lot of national interest. At present, land for most of the government or public undertakings is acquired in excess of the minimum requirement.

Thus, the Act, 2013 and the Ordinance 2014 issued together serve lot of public purpose. Only time will tell how these provisions will be implemented in the field. However, there is lot of autonomy provided to the state governments and they can make suitable amendments according to their requirement including for industries.

By P K Agrawal

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