ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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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-à-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 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 India’s 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 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.

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