Column: Get the ground rules right

Written by Chetan Bijesure | Updated: Oct 23 2013, 08:36am hrs
Recently the government released the draft rules for the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, for comments from the stakeholders. The Act that was notified on September 27, 2013, has left the industry gasping as some of its fundamental concerns have not been addressed in the legislation. The industry is now banking on the rules to address these concerns and also some procedural issues.

Realising the importance of the issue, the minister for rural development immediately agreed to FICCIs suggestions in the interactive session with the stakeholders in September 2013, to institutionalise a Rules Advisory Committee for the Act in the ministry which would advise the government on rules on a regular basis. This is important since rules and procedures to be laid down under the Act must meet the needs of our industry and the society at large that would arise in the years to come and not just that in the present.

Coming to details now, if one reads the Act carefully, a lot has already been specified within the Act itself, like public purpose has been defined; the compensation formula and R&R clauses have been thrashed out in great detail; timelines in case of certain processes have been specified and so on, thereby leaving less scope for any interpretation in such cases. While the rules cannot change the fundamental structure of the legislation, but they can help us in having more clarity and predictability in the application of the Act.

Industry is worried about the long-drawn process for land acquisition as laid down in the Act. We believe that the process of land acquisition would take a minimum four to five years if there are no extensions in the timelines prescribed. The rules should now try to minimise this time period for acquisition within the existing framework provided by the Act.

First, there are stages for which the Act is also silent and, therefore, the timeframe needs to be specified within the rules to provide predictability to the whole process.

For instance, there is no timeline for the very first stage, that is submission of the land acquisition proposal by the industry and the notification of SIA (social impact assessment).

Similarly, there are many sub-stages involved in the whole process without being ascribed any time limit, though for the broader process timelines are mentioned.

Second, the minister in his speech at FICCI had mentioned that in order to ensure that the departments adhere to strict deadlines, his ministry would introduce penal provisions for non-adherence. The current draft rules do not talk about any such penal provision. A related issue here is the consent requirement which is going to be a time-consuming process. One needs the consent of 70% or 80% of the affected families to start the project in case of PPP or private sector projects. If rules could limit this to the affected families in terms of land owners only this would greatly ease the process of acquisition.

Coming to SIA, this is a relatively new concept and requires a lot of expertise in order to have an objective assessment. In India, it has been generally carried out as part of the environmental impact assessment process. The National R&R Policy of 2007 has made a provision for conducting SIA for new projects or expansion. But this was made applicable for projects that involve the displacement of 400 or more families. The Act provides for conducting SIA for all projects.

So, whether the project is small or large, it has to undertake this assessment. Generally, a full scale SIA is required for large projects involving displacement of a large number of families. But for small projects, rules could provide for initial social impact assessment (ISIA), which is not a full scale SIA, only to reduce the time required for acquisition. ISIA is carried out if the projects impact is perceived to be minor. A threshold in terms of area could be suggested in the rules for this purpose.

The other area that has been worrying the industry is the retrospective application of the Act. The Act clearly provides for retrospective application in those cases where award has been made five years or more prior to the commencement of the Act, but the physical possession of the land has not been taken or the compensation has not been paid. The draft rules have gone beyond that and expanded the scope.

If my interpretation is correct, the draft rules state that the Act will apply even in those cases where either the compensation has not been accepted or the possession has not been taken, and which are pending for a period of less than five years at the time of commencement of the Act but the pendency continues for a period that equals or exceeds five years. Also, the time period spent on litigation, if any, will be counted for this purpose.

Then there are definitions required for few terms to have consistency in application of the law and more clarity. For instance, the definition of urban and rural areas needs to be clarified in the rules as these terms are defined in various places differently like in census, municipal limits, income tax, etc. Clarity is also required in terms like what constitutes unutilised land as the Act provides for the return of unutilised land to the state government or land bank after a certain period.

Last, we all realise that the manufacturing sector needs to be revived in order to provide employment to millions of people joining the labour force every year and in order to reap our demographic dividend. The Act provides for land acquisition under public purpose, for industrial corridors and NIMZ but not for manufacturing units. In case of large manufacturing projects, the government needs to assist the industry to acquire land in order to overcome the last mile acquisition problem. If the rules can address the issue of last mile acquisition in large projects for manufacturing, it would greatly assist the whole process development.

The author is director, FICCI.

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