Author Name:   souvik_86

Study of the new land Acquisition Bill, 2011 which is recently cleared by the Group of Ministers and to be laid before the Parliament...

Land Acquisition, Rehabilitation and Resettlement Bill, 2011- An Insight into some key Issues

Authored By- Souvik Mukherjee, Associate, Corporate Professionals Advocates and Solicitors

The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 (Land Acquisition Bill, 2011), that seeks to replace the 118 year old colonial Land Acquisition Act of 1894 promises a lot but may fall short of expectations.

The Bill seeks to remove the bottlenecks relating to land acquisition particularly that of forcible acquisitions, misuse of the open ended definition of the term “public purpose”, compensation package, mandatory Rehabilitation and Resettlement (R&R) for the “land owners” and “livelihood losers”, etc. Some of the new changes made in the Bill include:

· Mandatory and increased compensation for landowners and livelihood losers,
· Inclusion of definition of “Landowners” and “Livelihood losers”
· Comprehensive R & R package for all private purchases through private negotiations if the land purchased is over 100 acres in rural areas or 50 acres in urban areas
· Need for consent of 80% of landowners for acquisition of land for Private projects for Public purposes and Private Public Partnership projects,
· Provisions for Social Impact Assessment (SIA) before acquisition,
· Restrictions on acquiring multi- crop and agricultural land,
· Involvement of local authorities like Gram Sabha, Panchayats, etc among others.

The hefty compensation package for the land owners and livelihood losers may be an expensive proposition especially for private and smaller players in the Real Estate market as the Bill appears to be mostly focused on land acquisition for infrastructural projects and large scale commercial projects. The Bill makes the setting up of a medium to large scale industries cumbersome and long drawn as it requires consent of 80 per cent of the project-affected families resulting in tedious transactional negotiations with large numbers of land owners. This is likely to encourage delays and higher compensations could impact infrastructure projects hindering urban growth and development.

Also, the Bill focuses too much on R&R of the affected landowners and livelihood losers without adequate infrastructure for the same. In a country like India, characterized by high population density coupled with scarcity of habitable land, this is likely to create unplanned urbanization, disorganized human displacement and creation of slums. Also, due to mandatory provisions of R&R for private players on acquisition of 100 acres of land in rural areas and 50 acres of land in urban areas, the size of projects may drastically be reduced to save on the cost and time for R&R. The cash compensation also relates to the historical value of land and not the present market value. In rural areas, where there is not too many sell or purchase of land, the mechanism to compute the compensation may not be a foolproof one, especially when the most transaction documents show lesser value just to avoid paying higher stamp duty. This would yield lesser compensation to the affected families than the present market value of the land.

Moreover, the ambiguity of the term ‘public purpose' continues to exist in the present draft policy. 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 is hard to ignore. It leaves a lot of discretionary powers with the government to determine the purpose of the acquisition. Further, the open ended definition of "infrastructure projects" permits the government to notify "any project" as an infrastructure project.

Also, restriction on acquisition of agricultural and multi-cropped land for Private and PPP projects would stagger the growth of infrastructural and housing development in the country as availability of suitable land would be the primary concern for most developers.

The Bill also fails to provide a level playing field for the Government and the private players. Where Government acquisitions are exempted from most provisions of the Bill, it stipulates strict norms for private players which will be a major deterrent for private investments in the real estate and infrastructure. The object of the Bill should have been on the purpose of acquisition and not on who acquires the land.

Although the new Bill is a much improved version of the erstwhile Act of 1894, it is punctuated with half hearted efforts of the Government. The Bill fails to strike a balance between the needs of the poor rural landowners and the aspirations of millions of Indians for affordable housing and infrastructure. Its principal defect is that it attaches an arbitrary mark-up to the historical market price to determine compensation amounts, along with its numerous entitlements to potentially unlimited number of claimants. Such a Bill will guarantee neither social justice nor the efficient use of resources. While this is a step in the right direction, there will be many more aspects to formalize before the Bill can come into effect.

The  author can be reached at: souvik_86@legalserviceindia.com

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