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At long last, the much awaited Land Acquisition, Rehabilitation and Resettlement (LAAR) bill (renamed The Right to Fair Compensation and Transparency in Land Acquisition, Resettlement Bill, 2012) gets Lok Sabha nod. Given its significance to the country's industrialisation and urbanization initiatives as also the windfall promises for millions of farmers and other land owners who often have been at the receiving end of a coercive colonial law, the new land bill is viewed as a game changer. The bill is a work of many years. The previous version of this bill was drafted way back in 2007 and despite its approval by Lok Sabha in 2009 it was allowed to lapse for reasons known to the government. The Bill was reintroduced again in 2011 followed by a thorough review by the Parliamentary Standing Committee. After the Committee headed by Smt. Sumitra Majahan submitted its recommendations in May 2012, the bill received the Cabinet nod in December 2012. With the ruling coalition making all efforts to get bi-partisan support (accepting 167 amendments, including all key suggestions of the principal opposition party), there is every chance that the bill will sail through in Rajya Sabha in the coming days.
Highlights of the Bill
The LAAR bill is a massive improvement over the existing 1894 land acquisition law that is at the core of most controversies and contestations over land. By restricting the scope of the notorious 'urgency' clause to national security and natural calamities and limiting the most misused 'public purpose' clause to mostly public sector initiatives, the bill does a cleanup act. Such new clarity on the above mentioned contentious provisions will reduce the chances of involuntary acquisition that has fueled public anger and contributed to the present impasse over land acquisition.
Second, even if arbitrarily (fixing compensation at the market of rate of four times for rural and two times for urban land) the bill at least makes an earnest attempt to address one the most neglected aspects of land acquisition. As has been extensively documented, a vast majority of millions of landowners, especially small farmers, adivasi, and poor, have received meager sum for all these decades.
Third, by incorporating rehabilitation and resettlement (R&R) components as a part and parcel of land acquisition process, the bill for the first time has given a serious push to this long neglected issue. Once the bill gets final approval, the land losers especially in the case of large projects (private sector land acquisition above 50 acres in urban areas and above 100 acres in rural) will receive a series of benefits including a house, Rs. 5 lakh or a job (if available), annuity, equity among others. Importantly, the bill for the first time includes project affected people (tenants and sharecroppers) among the beneficiaries of compensation and R&R benefits. This is a sort of revolutionary measure as not many countries in the world have dared to do this.
Fourth and the most noteworthy aspect of the proposed legislation is its promise to bring an end to distortion and opacity in land acquisition and dispute settlements processes. Given its comprehensiveness (for instance, it devotes two separate chapters on Scheduled Areas), it provides greater clarity and improved framework to resolve many of the contentious issues such as method of acquiring private land (for instance, having inserted mandatory social impact assessment before acquisition), determining rate of compensation, means and methods of settling disputes and grievances. As an illustration, take the case of land-use policy under the current law. Both the government and the private companies in hordes of cases change the land-use policy after they have acquired the land. The new bill will put an end to such practices.
Fifth, the land bill for the first time recognizes the role of Gram Sabha in land 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. This is a long overdue, albeit with some consequences.
Sixth, the most lasting contribution that the proposed law would bring in is the creation of a robust and an elaborate legal and institutional architecture to facilitate future land acquisition. By having a Land Acquisition and Rehabilitation and Resettlement Authority at the centre and the state levels, it puts in place framework to settle disputes and grievances for competing parties. This certainly ends opacity in the existing grievance delivery process.
Finally, the bill is much more federal in its intent and focus than any other laws affecting centre-state relations. For instance, the bill empowers states to determine land-use policy, lease options, creation of land bank and so on. The central legislation will act only as an overarching law and states will have to develop detailed mechanisms to facilitate a smother land acquisition processes.
Major Shortcomings
Although the new bill is a huge improvement over the existing land law, it has its own share of shortcomings and policy ambiguities that overshadow much of the progressive measures. First, despite all claims of having restored clarity, the bill fails to address the most vexed issue of "public purpose". Defining public purpose as "the provision of land for infrastructure, industrialization and urbanization projects of appropriate government, where benefits largely accrue to the general public" can be interpreted differently by different stakeholders. In effect, the bill does not clarify how private and public purpose in a private sector-led project will be evaluated.
Second, by raising the consent to unrealistic 80% in case of private land acquisition and 70% in the case of public-private projects (PPP) in critical sector of economy such as mining, infrastructure, defence, manufacturing zones, roads, railways, and ports, the process of land acquisition is going to be extremely lengthy and difficult. With an elaborate acquisition architecture in place (social impact assessment, environmental clearance and several other clearances, R&R, litigation hurdles, etc), acquiring a sizeable piece of land is going to be a time consuming process. Such is the proposed law that a handful of motivated land-owners can block or jeopardize projects of strategic importance.
Third, the issue of consent and time period is nothing compared to the price that would be paid for future land acquisition. An arbitrary method of fixing price of land acquisition at the rate of four times for rural land and two times in the case of urban land not only ignores the dynamics of land markets, it is also against any logic. Not only would it lead to speculative activities as has been extensively commented by a number of serious analysts
1 , by simplistically clubbing all lands into two categories (rural and urban), the proposed law would further complicate much of the land acquisition process and may erect new zones of conflicts and contestations. For instance, the bill clubs rural land in Haryana with rural land in Mizoram as the same, ignoring the land holding sizes, varied demand patterns and their use. Importantly, the bill fails to price the peri-urban lands thus would greatly harm lands in Scheduled Areas.
Fourth, while concerns over loss of multi-crop agriculture land (reasons of food security and other agrarian concerns including the loss of livelihood) is understandable, such a blanket ban would create havoc for country's urbanization plan as it would affect spatial urban spread. More importantly, such a ban on irrigated multi-crop land would put those interested farmers in disadvantaged position as it would block their chances to exit out of agriculture for other vocations. Although the bill in the last minute made some compromise in term of allowing 5% of such land on condition that state develops same quantity of waste land for agriculture use, this would not address the challenges that would arise out of the ban. In other words, the bill has been drafted in response to 'agrarian populism' than the practical considerations. The fact of the matter is India's growing young population is desperately seeking their futures in non-agricultural occupations. According to recent McKinsey Report, with the rapid changing demography and the 'youth bulge" by 2030, the country would have more than 40% of the population living in cities. Needless to say, a vast majority of the employment has to be generated outside the agricultural sector. There would be increasing pressure on land in general and given India's very low land-man ratio (which would be 0.2 hectares by 2020), the country has little choice but to use multi-crop land wherever feasible.
Fifth, while the bill promises transparency and certainty in acquisition process and after, by having several layers (at least five) of bureaucracies for all land acquisition cases, it makes simple land acquisition a complicated exercise. From social impact assessment, followed by independent expert assessment to hearing of objections and publication of declaration, makes the process lengthy and cumbersome. In many ways, it could scare any outside investor/entrepreneurs. With the judicial process provided acts only as a standby, the proposed law can potentially stymie industrialization and urbanization projects in the country.
Finally, adding a retrospective clause to pay in cases where land that is acquired five years ago without compensation is a retrograde step. Not only it spikes the project costs for thousands of entrepreneurs who are still struggling with acquisition hurdles, but also sends a wrong signal to the prospective investors. An ideal legislation should ideally aim at the future.
Conclusion
Notwithstanding major improvement over the existing land law and numerous benefits that the new bill would bring for millions of farmers and other land losers, the bill fails to address many of the structural issues concerning state, society and market in India. The bill presents to static view of a rapidly changing India. It's a naïve treatment to the rapidly evolving land markets (clubbing merely rural and urban) and casting every entrepreneur as 'predator' could harm future industrialisation of the country - the only way to lift out millions of impoverished labour from a stunted farm sector. Finally, while the bill has brought transparency in land acquisition, by incorporating too many instruments and agencies to ensure the same, it instead risks making the process bureaucratic. In short, the bill ends up replacing a coercive colonial law with a cumbersome one.
(The writer is a Senior Fellow, Observer Research Foundation)
1. See a perceptive analysis by Sanjoy Chakravorty, 'Land Bill misses round picture',Business Line,April 22,2013, link:
http://www.thehindubusinessline.com/opinion/land-bill-misses-ground-picture/article4644198.ece
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