Land has been a controversial subject area and has consistently been regarded as a principal source of inequality. This article from The Pioneer last year sums up the situation- “land (has) become amongst the most commonly violated of Indian liberties”. Problems relating to voluntary vs. forced acquisitions, murky land records, illegal usage of agricultural land and under the table transactions by and large fill this contentious space.

On 13^th December 2012, the LARR Act (Land Acquisition and Rehabilitation and Resettlement Bill, now renamed ‘The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill 2012’) was approved by the Union Cabinet (currently in the winter session of parliament). The Act calls for a “humane, participatory, informed consultative and transparent process for land acquisition for industrialisation, development of essential infrastructural facilities and … provide just and fair compensation to the affected families whose land has been acquired or proposed to be acquired or are affected by such acquisition and make adequate provisions for such affected persons for their rehabilitation”¹ . Main features of the Act can be found here on the PRS website. While there have been several reiterations of the Act, in terms of its main goal, it primarily seeks to enhance the land-owners rights through a system via consent, monetary compensation and R&R (Resettlement and Rehabilitation). The revised version of the Bill asks for 80% consent if the land acquisition is for private projects and 70% for PPPs (while no consent is required if the government acquires for ‘public purpose’). Another revised point was that the land, if unused for 10 years, shall be returned to the land bank or be given back to the owners. The R&R will apply to the entire area in which the project is approved.

But how far has the Act been able to address the various issues with respect to land acquisition? Are the processes in place for a more inclusive and transparent procedure for land acquisition? This blog looks at some of the main areas of the discussion that have been addressed either as a debate or a dialogue.

Political patronage, big businesses and land-use

Since the 1894 version of the Land Acquisition Act, there are numerous stories of unlawful taking over of land, unfair compensation and even forceful acquisition. These stories seem to have intensified in the last few years- Bhatta Parsaul, Nandigram, Singur and others point to the delicate nature of the problem – Land grabbing, scams and the complex politico-business nexus have altered the way in which land acquisitions have been conducted but also put enterprises who have political connections and those who have deep pockets substantially ahead of the curve . The POSCO incident a few years ago is a telling example. POSCO was castigated as having evaded the anti-dumping duty and again thereafter for having an agreement with the Orissa state government for the production of 12 million tonnes of steel a year, despite the fact that the Environment Impact Assessment report said the area was only prepared for a third of that amount. All these incidents point to the fact that the final decision and power still remains with the bureaucracy. To what extent can it be made certain that no loopholes are found in the acquisition process once the Bill is implemented?²

Monetary compensation

The revised LARR compensation system includes a sliding scale mechanism in the market price of land – a method in which land within 10 km of the city will be paid for at market rate only, land between 10-20 km will be given 1.4 times the market rate, increasing as you move further away from the city. While the multiplier factor remains at twice the market price, the total compensation paid at the end will be four times the market price for land in the rural areas³. The possibility of these ‘market prices’ being arbitrarily defined is quite high.

An important issue that needs to be addressed is that people may actually be displaced much before the compensation is paid (In the Act, the compensation will be given ‘within 3 months’ of accepting the contract for that piece of land). This may lead to a loss in livelihood. Another aspect of the LARR Act is that in case the land is being used for ‘public purpose’, the former residents are entitled to jobs. To what extent are people going to be trained / how will the government ensure that these jobs remain are questions that still need to be answered.

Questions regarding Resettlement

Following from the above point, when we look into the various layers within the Act, the question of resettlement plays a central role. An article in the Indian Express rightly states that ‘land acquisition is often an occasion for reproducing social distance rather than closing the gap’. A heavily criticised part of the Bill is that in case the government takes over land for a short period of time, the Rehabilitation and Resettlement provisions do not apply – a clause that may lead to heavy misuse.

However, unlike earlier drafts, the current LARR Bill looks more closely into the resettlement problem and seeks to provide project-affected families with dual benefits – a) A package comprising a subsistence grant, resettlement allowance and a transport allowance and; b) Accessibility to transport services, water, public lighting, basic irrigation facilities, etc in the resettlement areas While this certainly adds teeth to the Bill, there are innumerable issues that arise when promising so many things. How will these allowances be settled amongst thousands of families? Would the resettlement areas be worked upon once the project has been approved or would there be a lull period between the approval and the displacement time are questions that still remain to be clear.

Too many oversight bodies

Under this Act, there have been several changes to the number of oversight bodies that have been discussed. The Bill comes under the purview of the Right to Grievance Redressal Bill and in addition, will have Rehabilitation & Resettlement Committees at the project level, a Land Acquisition & Resettlement Authority at the state level and a National Monitoring Committee at the Central level (Section 41, 44 and 45). A cabinet committee on investment (CCI) has been approved to be in charge of projects that will be a one point area to clear large (read: over Rs 1000 cr) infrastructure projects. What would they do? What powers would they possess? All of that (unfortunately) remains unclear. Consequently, there are several other Acts/Bills that deal with a similar issue but have separate authority bodies (eg. Land Ceiling Act, National Bureau of Land Use) – there is very little information on what powers and authority these bodies possess. Will these separate bodies have any say on the viability of certain projects, delay-related problems, or whether the companies are meeting the guidelines for acquisition?

The pro-farmer stance and the reform of the very colonial Land Acquisition Act of 1894 by the government is long overdue. Taking from the long spell of exploitation by private and corrupt public interest, this new Bill seems to be the light at the end of a dark and bungled tunnel. However delays, inefficiencies in the system, violations of the rules continue to haunt countless other Acts and Schemes. To the extent that the ‘Iron Law of Rent-Seeking’⁴ would leak into the system can only be assessed once the impact is seen post-implementation. Till we can gain access to more information, the onus lies with the central and state governments to use their political will to strengthen transparency processes and tools in order to implement this Act.

1^ Text of the Land Acquisition, Rehabilitation and Resettlement Bill, 2011 as introduced in the Lok Sabha

2^ Pratap Bhanu Mehta. ‘Its Land. Stupid’. http://www.indianexpress.com/news/it-s-land-stupid/662223

3^ Interview with Jairam Ramesh. Business Standard, October 2012. http://www.business-standard.com/india/news/no-land-acquisition-for-ppp-townships-jairam-ramesh/488261/

4^ Dennis Mueller, Industrial Economist, postulated the ‘The Iron Law of Rent Seeking – whenever a rent is to be found, a rent seeker will be there trying to get it’