The Search for a Model Land Legislation: The New Land Bill and its Challenges

While the draft Land Acquisition and Rehabilitation and Resettlement Bill 2011 makes a genuine push for a better land acquisition regime in the country, the proposed legislation fails on many fronts to address some of the vexed issues related to land acquisition. This Paper looks at the key challenges to this legislation.

Land acquisition remains at the heart of India’s current developmental predicaments. In this country, hardly a day passes without a report of an agitation or some incident of violence over land acquisition. Nearly all major projects today are being held up by one or another problem related to land acquisition. If these problems are not addressed soon, the land issue has the potential to disrupt not only the economic story of India, but also its political stability. In response to the rising tide of resistance and protests against present practices of land acquisition, governments at the Centre and state levels have been announcing all kinds of sweeteners such as attractive compensation packages, a variety of rehabilitation schemes including jobs, annuity, equity participation, developed plots, among other things. The same states which used to be indifferent to pressing issues of land acquisition are now competing with one another with their packages and a host of other benefits to smoothen the process. By introducing a comprehensive draft bill in the last session of Parliament, the Centre too has joined the race against state governments, albeit belatedly.

The Draft National Land Acquisition and Rehabilitation & Resettlement Bill (LARR) 2011 proposed by the Minister of Rural Development, Mr. Jairam Ramesh, on 7 September 2011, is long overdue. It could not have been timed better, given the alarming trend of violent protests and an everexpanding list of stalled projects due to messy land acquisition processes. If the contents of the bill (and the Minister’s own signals) are to be the gauge, the Centre is keen to travel a few miles more than the states to resolve this issue. Since this is a central legislation which would replace the colonial-era land legislation of 1894 with wider ramifications, this Bill is being closely monitored by people across sectors.

How do the key provisions of this draft fit into the current political economy of land? Does the proposed bill adequately capture the broad political economy that surrounds this volatile sector and suggest appropriate legal framework and institutional mechanisms to correct the existing maladies in the land sector? What challenges are likely to be faced by the proposed land legislation in the near and long terms, with regard to its realisation? This paper will attempt to enumerate some of these key challenges. A cursory glance at the various provisions of the new bill shows that it is an immensely improved version compared to the 2007 draft. By combining compensations, rehabilitation and resettlement into a single bill, the government has finally recognized that this neglected but most critical component of land acquisition plays a huge role in fueling protests and agitations across the country. A significant departure over the previous draft, for example, is the insertion of a clear provision of executing R&R package before land is acquired.

Moreover, if enacted in its present form, the bill would significantly bring down the prevalent pattern of involuntary acquisition. The proposal makes it mandatory to obtain consent from 80 per cent of the affected people before any acquisition notice is issued; thus significantly reducing the chances of forcible acquisitions. Stringent restrictions on the most misused ‘urgency’ clause to national security and natural calamities has also reduced chances of involuntary acquisition. However, the ‘public purpose’ clause— which can be considered the ‘mother of all controversies’ around land acquisition—largely remains the same, thereby leaving enough scope for its misuse.

Third, the new legislation guarantees a higher compensation for land owners (four times the market price for rural and two times for urban areas, respectively). Theoretically, this is a major improvement over the existing land law; however, such a pricing formula is riddled with complications. (The subject is discussed in the next section). In addition, certain alternative forms of compensation, such as allocation of shares of developed land and annuities, can go a long way in persuading reluctant sellers, but their execution is going to be a real challenge.

Fourth, for the first time the bill recognizes the claims for compensation of those affected by land acquisitions (including: agricultural and nonagricultural labourers; rural artisan or self-employed persons; and landless labourers). This is the most radical departure from the current land acquisition regime. If implemented seriously, it can significantly lessen the ongoing impasse over land acquisitions.

Fifth, it is the first of its kind land legislation that unequivocally recognizes the role of Gram Sabha in the acquisition process. This has been done to comply with other laws particularly the Panchayat (Extension to the  Scheduled Areas), Act, 1996 and the Forest (Dwellers) Rights Act, 2006. A pre-notification consultation with Gram Sabha is a procedural innovation that could, hopefully, reduce litigation and help accelerate the process of acquisition through a new participatory framework.

Lastly, notwithstanding many limitations, the new proposal to create an elaborate dispute and grievances settlement mechanism is a significant step towards ensuring due fairness to people who are parting with their land titles. This could create a legal framework for the governance of land acquisition processes.

To sum up, the proposed legislation is a vast improvement over the colonialera 1894 Land Acquisition Act as it contains various provisions that can facilitate smoother land acquisitions. The new law would significantly improve the fortune of land owners and even those who are distantly connected with these lands.

But key questions remain: Will the proposed legislation significantly alter the messy political economy of land in India? Does it contain serious doses of reform that can address some of the intractable challenges that permeate this critical sector?

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Niranjan Sahoo