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June 19, 2012

In Parliament

Land Acquisition and Rehabilitation and Resettlement Bill, 2011

The Standing Committee on Rural Development has presented its report on the Land Acquisition and Rehabilitation and Resettlement Bill, 2011.  Here, we look at some key recommendations of the committee.

The term “land acquisition” is the exercise of the eminent domain power of the state. That is, the state takes away the private property (land) from a person, when they are unwilling to sell the property, in order to benefit the wider public. The property owner, usually, has the right to compensation for the property.  Thus, there are at least three elements to any land acquisition law: (a) the purpose towards which land may be acquired; (b) the process of acquisition; and (c) determination of compensation to the land owners.  There may be a fourth element too.  A large number of people may be displaced (physically and economically) due to the acquisition, and a welfare state has the duty to ensure that their interests are safeguarded.

Public purpose:  The standard test towards the first element – what can land be acquired for – is whether it meets certain norms of “public purpose”.  The definition of public purpose is thus central to any land acquisition law.  In India, the Land Acquisition Act, 1894 has a fairly wide definition of this term.  It includes acquisition for the purpose of village sites, town and rural planning, development projects (education, housing, health, and slum clearance), residences for poor or displaced people, and land for public sector enterprises.  It also allows acquisition for use by a company for construction of some work if “such work is likely to prove useful to the public”.

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A bill in 2007 (which lapsed with the 2009 general elections) narrowed down the definition to just three parts: for strategic defence and security needs; for infrastructure projects; for a company that has already purchased 70 percent of the required land (and needs to acquire contiguous land).  The current bill, introduced in 2011, has reverted back to a definition that is similar to the 1894 Act.  It however, has an additional condition if land is acquired for use by a private company or a Public-Private Partnership (PPP); in such cases, consent is needed from 80 percent of all affected families, i.e., land owners, tenants, labourers and craftsmen in that area etc.

The Standing Committee has modified the definition again. The Committee has said that land may not be acquired for use by the private sector or PPPs. Thus, it has made a distinction on the basis of ownership, regardless of the purpose of the project. For example, its recommendations imply that land may be acquired for a road if constructed by the government but not if it is a PPP project. PSU power plants may use the land acquisition act but private producers may not.  The committee states that the private sector obtains two of the three key factors of production, labour and capital, from the free market, and should do so in the case of land too. However, there may be arguments against making a distinction between the public and private sector. After all, the adverse consequences for the land owner and the displaced person are the same in both cases, and the benefit to the public (road/electricity) is also the same.

Private purchase:  The bill requires rehabilitation and resettlement to be provided for all acquisitions. It also requires the benefits to be provided (a) for all persons displaced by the project if a part of the land was acquired for use by a private company; and (b) if a private company purchases land of 100 acres in rural areas or 50 acres in urban areas.  The Committee said that the first case would not arise given its recommendation against acquisition for a private company. It said that agricultural land was a state subject, and that the second provision should be modified to enable state legislatures to enact laws in such cases.

Process: The main change recommended by the Standing Committee relates to the role of local elected bodies – gram sabhas and urban local bodies – in the process.  The 2011 bill requires consultation with these bodies at several stages of the acquisition and rehabilitation of displaced persons.  The Committee has recommended that their consent be made mandatory to ensure a greater role of the local community in deciding the level of compensation and rehabilitation and resettlement package.  However, the consent provision may hinder some large projects.  For example, a highway may pass through a few hundred villages.  If consent is required from every gram sabha, residents of any one village can block the whole project.

Compensation: The bill requires compensation to be linked to recently recorded market transactions.  The compensation would be four times that value in rural areas and twice in urban areas.  If the land has been acquired using the “urgency” provision (which bypasses some of the processes), the compensation would be increased further by 75 percent.  The Committee has broadly agreed with the formula but has recommended some changes to remove ambiguities.

Rehabilitation and Resettlement: The bill lists out certain norms as part of the rehabilitation package for every person who is displaced as a consequence of the acquisition. It also provides a list of minimum infrastructure facilities (school, post office, PDS outlet, etc.) for every rehabilitation site. The Committee has recommended that these facilities should be decided on a case-by-case basis.

Delegated powers to the government: The bill delegates several powers to the government to be prescribed through Rules. The Committee has curtailed some of these powers.  These include the power to expand the definition of “infrastructure”, and the power to amend the schedules which determine the computation of compensation payable, and the norms for rehabilitation and resettlement.  The bill also exempts 16 Acts from its purview. These Acts include those related to mines, electricity, highways, railways etc.  The Committee has stated that there should be no exemption; instead, the provisions related to acquisition, compensation, rehabilitation and resettlement in those Acts should be aligned with those in the bill.

Next steps: Newspapers report that the Minister, Jairam Ramesh, has disagreed with some of the committee’s recommendations. The government will next consider the report and decide on its official amendments to the bill. Subsequently, it would bring the bill in Parliament for consideration and passing, at which stage, the views of the different political parties and MPs will be aired. At that stage, Parliament needs to debate the bill in detail and find the right balance between the needs of development and growth on one side and the rights of land owners and other affected persons on the other side.


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