ISSN (Online) - 2349-8846

A Land Acquisition Bill With Many Faultlines

Prasenjit Bose (boseprasenjit@gmail.com) is an economist based in New Delhi.

The much revised and much delayed Land Acquisition, Rehabilitation and Resettelment Bill is
expected to be debated in Parliament in the Monsoon Session. There are, however, many problems
with the Bill as it now stands. Can they be addressed?

Many issues and concerns have been raised across the country regarding the undemocratic and
anti-people aspects of the land acquisition process under the antiquated 1894 law that have led to
bitter conflicts and confrontations over the years. A democratization of the land acquisition process
is long overdue. Against this backdrop, the proposed provision contained in the Land Acquisition,
Rehabilitation and Resettlement Bill, 2011 (LARR Bill) to carry out a Social Impact Assessment
(SIA) in all cases of land acquisition -- including through a public hearing of the affected families --
by the government in order to make a comprehensive social cost-benefit analysis is a good start.
Provisions have also been made for an evaluation of the SIA report by an independent expert group
and a consideration of all the reports before a final recommendation for land acquisition is made.

However, the final decision regarding land acquisition is to be made by a high-level committee
consisting entirely of bureaucrats headed by a chief secretary of a state. It is questionable whether
such a committee can objectively ensure minimum displacement of people, minimum disturbance
to the infrastructure and ecology, and minimum adverse impact on the individuals affected in all
cases of land acquisition. The experience of the Environmental Impact Assessment process
currently followed shows that due processes are given a go by when it comes to implementatio
because of our vested-interest-driven political-bureaucratic system.

Rehabilitation and Resttlement

The integration of rehabilitation and resettlement (R&R) into the land acquisition process is a
positive feature of the 2011 Bill. In the proposed legislation, the draft of the R&R scheme will have
to be discussed with gram panchayats and municipalities, and public hearings at the gram
sabha/municipal ward level have been made mandatory. There is a provision for R&R committees at
the project level involving local people and their elected representatives which will carry out post-
implementation social audits. The creation of a separate commissionerate for R&R, a national
monitoring committee for R&R and a Land Acquisition, Rehabilitation and Resettlement Authority
to be presided by a judge have also been proposed.

However, while creating a plethora of institutions, the provisions of the bill fail to establish a clear
system of accountability of the final decision-making authority vis--vis the affected persons and
their elected representatives. The project-level R&R committees will be toothless and the penal
provisions for initiating action against government servants who violate the provisions of the law
are fuzzy. Clearer structures of accountability are required to check the rampant abuse of official
power, especially when it comes to acquiring land belonging to adivasis and other weaker sections.

The way public purpose has been defined makes the prior informed consent of at least 80% of the
land owners mandatory only in cases of land acquisition for private companies and public private
partnership (PPP) projects. Therefore, those who do not own land but whose livelihoods are
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dependent on land would not have any voice in the decision-making process. The provision of
informed consent would also not apply to a whole range of projects in the public sector involving
those meant for strategic purposes, for railways, highways, ports, power and irrigation projects, or
for government projects in the fields of education, agriculture, health, urban and rural housing etc.

Thus, a significant proportion of the land to be acquired will continue to be transferred even if a
majority of the affected persons are unwilling to part with their land. Further, 16 central
legislations have been included in the fourth schedule of the bill including the Atomic Energy Act,
Railway Act, National Highways Act, SEZ Act, etc. under which land acquisition can continue
without inviting the provisions of the LAAR Bill.

Exclusion of Public Sector

While a differentiation between land acquisition for infrastructure or social welfare projects in the
public sector and that for private companies is justifiable in defining public purpose, to make land
acquisition for the public sector exempt from the provisions of the LAAR bill - especially those
related to prior informed consent - goes against the very spirit of the legislation. After all, those
displaced by large projects suffer similar adverse consequences, whether the project is in the
public or private sector. Besides allowing the coercive land acquisition process to continue in such
cases, the exemptions being made for such a wide range of public sector projects can lead to land
acquisition for private purposes occurring through surrogate public sector projects. Such suspicion
has gained ground with the inclusion of the SEZ Act in the fourth schedule.

The overall compensation package for land owners affected by land acquisition proposed in the
LAAR bill can be four times the market value of land in rural areas and two times that in urban
areas, plus the value of the assets attached to the land. The calculation of the market value is
proposed to be based on either the minimum land value for the registration of sale deeds in the
area specified in the Indian Stamp Act or the average of the sale price for similar type of land
situated in the immediate areas adjoining the land being acquired, ascertained from fifty per cent
of the sale deeds registered during the preceding three years, where higher price has been paid;
whichever is higher.

It is a well known fact that Indias land and property markets have evolved into a cauldron of
illegality and black money, with the price being grossly under-stated in the registered sale deeds.
Therefore, figures like four or two times the price mentioned in sale deeds can have little meaning.
A more scientific method to ascertain market value of land would be to make the prices fond
through the proposed compensation formulae as floor values and institutionalize a process whereby
the affected persons can collectively bargain with the government for a higher price without any
fear of coercion. This process should be institutionalized for public sector projects too. In a land-
scarce country like India that has a high population density, the cost of land acquisition should also
be high. The mindset that land can be made available for cheap by using the coercive powers of
the state has to be given up.

Better Compensation

The provision for giving the options of a job to at least one person in each affected family or an
annuity of at least Rs 2000 per family for 20 years (inflation indexed) or a one-time payment of Rs 5
lakhs per family as a rehabilitation entitlement can be improved upon. If the idea is to ensure that
the cumulative outcome of compulsory acquisition should be that affected persons become
partners in development leading to an improvement in their post acquisition social and economic
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status, as has been mentioned in the preamble to the LAAR Bill, the material gains accruing from a
project for which land has been acquired need to be shared with the project affected persons, both
land owners and those who depend on the land for their livelihood. Employment for at least one
member of every project affected family should therefore be guaranteed in the project, with the
responsibility of training/skilling the persons to the required level lying with the acquirer of land.
The choice of annuity or one-time payment should be kept over and above this job guarantee. This
can make a small but positive difference to the jobless pattern of growth that we are witnessing in
India today.

There has been an inordinate delay in the enactment of the LARR Bill, reflecting the various pulls
and pressures at play. While the move to replace the antiquated Land Acquisition Act of 1894 was
initiated way back in December 2007, the first United Progressive Alliance Government (UPA)
government failed to ensure its passage. Since the advent of the UPA-II government in May 2009,
this crucial legislation has not received the priority it deserves. Beleaguered by a spate of
corruption scandals, the government chose to pursue reforms like allowing foreign direct
investment in retail and deregulating fuel prices. It remains to be seen if a constructive debate can
at all be conducted in Parliament over the LAAR Bill in the din of the pre-poll slanging match that
has inevitably commenced.