The land acquisition debate: A review
16 August 2012
Land acquisition remains at the centre of many controversies and public policy paralysis in India. There are very few public policy issues in India that rival land acquisition in terms of its complexity, challenges and significance to country’s growth and transition to more urbanised and industrialised status. Currently, the Union Government is mounting series of efforts to clear several hurdles with regard to the existing land law which dates back to 1894.
This analysis captures evolution of various strands on land acquisition as yet. The paper is divided into the following sections. Part II provides an account of the present Land acquisition Act, 1894 and its short comings. Part III introduces the Land Acquisition, Rehabilitation and Resettlement Bill, 2011 which is currently pending before the parliament and deals with the main points of criticism regarding the same. Part IV deals with the recommendations of the Standing committee on Rural Development. Part V provides the author’s observations on the debate so far and the road ahead.
Land Acquisition Act, 1894 and its problems
Ever since its enactment, the Land Acquisition Act, 1894 ("LA") has been subject to controversies and fierce debate. Notwithstanding rounds of amendments, including the 1984 changes, it has failed to address some important issues associated with land acquisition particularly forcible acquisitions, definition of "public purpose" , widespread misuse the of "urgency clause", compensation, lack of transparency in the acquisition process, participation of communities whose land is being acquired and virtually no rehabilitation and resettlement package. Further weak implementation and ineffective administration at the ground level has increased the suffering and anguish of the people. Due to a lack of clear definition of "public purpose", there has been considerable difference of opinion among various judgments of the Supreme Court, finally resulting into granting very broad discretionary powers to the state in terms of deciding the contours of "public purpose" under particular circumstances.I All these factors coupled with the urgent need to industrialize have put land acquisition at the heart of the debate in India.
The Land Acquisition, Rehabilitation and Resettlement Bill, 2011: A Critique
The proposed land acquisition bill 2011 has introduced a number of changes over and above the existing 1894 law on land acquisition. The government realising that acquisition and rehabilitation and resettlement "are two sides of the same coin" IIand taking into account the suggestions of the NACIII has combined acquisition, compensation, rehabilitation and resettlement into one single bill. It mandates a Social Impact Assessment of the proposed acquisition by an independent body for all acquisitions. IV For projects undertaken by private companies or through public-private partnerships, the bill requires the consent of 80% of the affected people which will a long way in reducing forcible acquisitions. V It guarantees higher compensation to the land losers and adopts the market value method to compute compensation.VI The possibility of abuse of the "urgency clause" has been considerably reduced by limiting its application to the requirement "for the defence of India or national security or for any emergencies arising out of natural calamities." VII The claim for compensation of "affected family" has been endorsed by providing a broad definition to the term which includes sharecroppers, agricultural labourers, tenants whose primary source of livelihood stands affected.VIII The bill also recognises the role of self-government institutions and Gram Sabhas and provides for consultation with the same at the time of preparing the SIA and at the time of issuing the preliminary notification for acquisition.IX It has been argued that the bill is certainly in the right direction; however, it fails to address some of the critical issues which have been highlighted in the next section.
Despite the object and purpose of the bill stating that the definition of "public purpose" needs to be redefined so as to "restrict its scope", the definition presented in the bill has largely remained the same and leaves enough scope for its abuse. The vagueness attached to the phrases "provisions of public service" and "production of public goods" in relation to public private partnerships and acquisition by private companies has been severely criticized. It is has been argued that it leaves a lot of discretionary powers with the government to determine the contours of the purpose of the acquisition and its end product. X Further there has been objection to the open ended definition of "infrastructure projects" XI leaving it to the discretion of the government to notify "any project" as an infrastructure project.
The major point of criticism from all corners has been the power of the Central Government vis-a-vis the state governments in relation to sale and purchase of land by private companies and the applicability of the R&R provisions. Various state governmentsXII have opposed the provisions relating to mandatory R&R for all private purchases if the land purchased is over 100 acres in rural area and 50 acres in urban area. XIII It has been argued that transfer and alienation of agricultural land finds mention under Entry No. 18xiv of the State list and hence it has the sole right to legislate on laws pertaining to sale/purchase of land by private negotiations and impose conditions for the same.
Implementation and other Issues
Nani Palkivala, noted constitutional lawyer, had once remarked that "...in India we have too many laws and too little justice..." An otherwise good law may never be able to meet the ends of justice if it does not provide for an effective means for its implementation. It has been observed that the present LAAR bill will encounter many bottlenecks for its provisions to take effect. The provision for compensation on the basis of "market value" of land will remain elusive in the absence of a well functioning land market in India.XV Further, very few land transactions happen at the rural level which prevents the discovery of real value of land. The issue is further compounded by the underreporting of the transaction price to avoid stamp duty.XVIFurther it may even open the doors to speculative pricing.XVII The records of property rights in India are depressingly inadequate and highly disorganised and hence private sale of land can lead to numerous legal problems post sale.XVIII
Another area which has evoked immense debate is the ban on multi crop agricultural land, with an exception of 5% of the total area of the land.XIX The government justified its stand on the grounds of food security. Commentators XX have pointed out that such a stand denies the willing farmers who wish to sell their land. Further that our young population is increasingly looking at options outside the agricultural sector and hence this clause would stifle their aspirations. The issue of corruption at the level of the district collectors has remained open in the debating circles. There have also been apprehensions about the large amount of discretion being granted to the collectors to determine the market value of land.
There has been considerable debate on the role of Gram Sabhas during the process of the acquisition.XXI The bill, it is criticized makes only a half-hearted effort in terms of providing for consultation with the Gram Sabhas. It is argued for a more inclusive role for the Sabhas and requiring their consent and not just a mere consultation.
Recommendations of the Standing Committee on Rural Development
After the introduction of the LAAR bill, 2011 in the Lok Sabha, it was referred to the Standing Committee on Rural Development by the Speaker on 13th September, 2011. The Committee after extensive consultations with various stakeholders like the general public, central and state governments, farmers associations, social organization, legal experts and the industry submitted its report on 16th May, 2012. The report highlights certain key issues regarding the bill and gave its recommendations on the following issues.
♦ At the outset the committee recommended that the state should not acquire lands for Public Private Partnerships and for private companies. Further it expressed apprehension regarding the open-ended definition of "public purpose" and "infrastructure projects" and recommended the deletion of Clauses 2(1)(b) & (c), 2(2)(b), 3(o)(v), 3(za)vi)(B) and (vii)XXII.
♦ On the question of mandatory R&R provisions for all private purchases, the Committee while noting that sale/purchase of land is a state subject recommended that the state governments should be given the discretion to fix R&R provisions keeping in view the overall objectives of the actXXIII.
♦ The committee recommended for a much larger role for the Gram Sabhas. That their role should not be limited to only consultation and their centrality should be ensured. Their consent should be obtained for all the matters with regards to acquisition and R&R benefitsXXIV.
♦ On the question of applicability of the LAAR provisions on the scheduled areas, the committee recommended that the bill should not allow for acquisition of land falling under the scheduled areas. However, if the public purpose is unavoidable special provisions be made for increased compensation, resettlement and rehabilitation. Further, that there should be stricter conditions attached in the nature of relocation in a similar ecological environment so as to preserve language, culture and community life of the tribal communitiesXXV.
♦The committee rejected the exemptions being granted under the LAAR to 16 central land acquisition acts and proposed that necessary amendments should be brought in the acts to make them at par with the LAAR billXXVI.
♦ The committee recommended the constitution of a multi member land pricing commission or authority to finalize the cost of the land acquired state wise or area wiseXXVII.
While the present LAAR bill, 2011 is a much improved version of the erstwhile 1894 Land Acquisition Act, some of the key features of the bill still need substantial amendments. The bill is replete with instances of half hearted efforts of the government. The controversial question of "public policy" has not seen much attention coupled with greater facilitation for private acquisition and an unreliable method of computing compensation will make the land acquisition process prone to much hindrance. The issue regarding state intervention for private acquisition has not been correctly appreciated by the Standing Committee. Its recommendation that the state should not have any role to play in private acquisition of land overlooks the fact that there is a huge gap between the private parties and the poor land losers. Lack of state role in acquisition may result in the exploitation of the land losers, especially in the rural sector. Further a complete ban on acquisition on any land under agricultural cultivation may prove to be counterproductive as there may be a shortage of land for industrial development. The avowed vision of reducing or minimising displacement does not find mention in the bill and the final decision is left to the bureaucracy.XXVIII In such circumstances the Committee should have had a much broader perspective and should have also dealt with several implementation bottlenecks that the bill may face once enacted. Further the symbiotic relationship between land grabbing, mafia-political-bureaucratic nexus and corruption on the ground are further going to complicate matters. This needs to be reflected in the new legal and institutional architecture to ensure land acquisition to become fair, equitable and transparent.
(Kanad Bagchi is a Research Intern at Observer Research Foundation. He is a fifth year student of B.B.A.LL.B. (Hons.) from KIIT Law School, Bhubaneswar)
IPandit Jhandu Lal and Others vs The State of Punjab and Another AIR 1961 SC 343; R L Arora vs The State of Uttar Pradesh AIR 1962 SC 764; Smt Somawati & Others vs State of Gujarat AIR 1963 SC 151.
IIBill No. 77 of 2011, The Land Acquisition, Rehabilitation And Resettlement Bill, 2011 [LokSabha], Statement of objects and reasons.
III Centre for Development Economics, Delhi School of Economics, The Land Acquisition Bill: A Critique And A Proposal, Working Paper No. 204 (September, 2011).
IVChapter II of the LARR Act.
VFirst proviso to § 3(za)(vii) of the LARR Act.
VISee generally, § 26 read with ¡± 29 and first schedule.
VIISee, § 38of the LARR Act.
VIIISee, § 3 (c)of the LARR Act.
IXSee § 4of the LARR Act.
X See §§ 3(za)(vi)(B) and (vii)of the LARR Act.
XISee § 3(o)(v)of the LARR Act.
XII Most notably the Government of Madhya Pradesh, Government of Himachal Pradesh, Government of Maharashtra.
XIII See § 42of the LARR Act.
XIVEntry 18.Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans;colonization.
XVNiranjan Sahoo, The New Land Acquisition Bill and its Challenges(New Delhi: Observer Research Foundation, 2011)
XVIBardhan, P, M Luca, D Mukherjee and F Pino, "Evolution of Land Distribution in West Bengal 1967-2004: Role of Land reforms" (WIDER Conference on Land Inequality, 2011).
XVIIAbhijit Banerjee, "The Plots Thicker", The Hindustan Times(19 September, 2011).
XVIIISupra note 5.
XIXSee § 10 of the LAAR Act.
XX Debroy, Bibek, "Electing Corruption", The Financial Express(November 23, 2011; also Sahoo 2011.
XXISee §§ 4 and 11 of the LARR Act.
XXIIStanding Committee on Rural Development, "Report on The Land Acquisition, Rehabilitation And Resettlement Bill, 2011", 31st Report, 15thLokSabha (2012) at p. 26.
XXIIIIbid at p. 34.
XXIVIbid at p. 38.
XXVIbid at p. 45.
XXVIIbid at p. 61.
XXVIIIbid at p. 151.
XXVIIID.Bandyopadhyay, "The relevance of land reform in post-liberalisation India", InfoChange News & Features (April 2008). Online: InfoChangehttp://infochangeindia.org/agenda/battles-over-land/the-relevance-of-land-reform-in-post-libe ralisation-india.html