Will the new land acquisition law help

Updated: Aug 27 2013, 16:03pm hrs
Land acquisition law
We have stressed on two points while preparing the Parliamentary Standing Committee Report on the Land Acquisition, Resettlement and Rehabilitation Bill.

First, the government should not buy land even for private public partnership (PPP) projects or even when there is public interest involved and, second, as far as possible, agricultural land should not be used for industrial purposes.

However, the draft law asks for 80% consent for acquisition for private projects, 70% consent for PPP projects and no consent for infrastructure projects fully owned and executed by the government. Although the rural development ministry (which is anchoring the Land Acquisition Bill) has not agreed to our opposition to land purchase for PPP projects, the government has accepted our proposal to exempt all agricultural land from acquisition.

In the Bill submitted to the Parliamentary Panel, the government has included the clause that multi-cropped, irrigated land is to be acquired only as a last resort. With large-scale diversion of agricultural land for industry purposes, providing food security to such a huge number of people will become difficult as food cannot remain limited to rice and wheat only. Using agricultural land for industrial use should remain the states prerogative. The states can demarcate the areas in their master plan for industrial use.

We have also made a case against the creation of a land bank, proposed in the draft legislation, with the lands acquired from farmers for industrial use which are not put to use within 5 years of purchase. All the members of the Parliamentary Panel had expressed their reservation against the concept of a land bank as land is a scarce resource in our country. We had proposed that the unused land be returned to the original owners in case the land is not put to use within 5 years of purchase. The government has agreed to this proposal.

The government has also agreed to our proposal of making gram sabha consent mandatory for acquisition of land in scheduled areas for industry purposes. This is in line with the demands of the civil society organisations. Under a separate provisionthe Special Provisions for Scheduled Castes and Scheduled Tribesthe Bill says, In case of acquisition or alienation of any land in scheduled areas, the prior consent of the gram sabha concerned or the panchayats or the autonomous district councils, at the appropriate level in scheduled areas under the fifth schedule of the Constitution, is mandatory.

We have also pushed for changes in the definition of the term project affected people. It now includes those who have been working in agricultural lands set to be acquired for industrial use. The government has also agreed to include a new clause in the Bill to encourage states to lease land for projects instead of acquiring it. The new clause leaves it to the states to decide on whether they would be exercising the option to lease land for any project.

However, the government has not supported the panels suggestion of having a multi-member committee at the district level to decide on the market value of the land. The Bill empowers the district collector to decide the market value of land in his/her district. The Bill now stipulates a compensation of four times the market value of the land being acquired, payable to landowner while the earlier version proposed a compensation of six times the market value.

We have agreed to support the Land Acquisition Bill as it is long overdue. The proposed law would replace the 117-year-old Land Acquisition Act of 1894. It will also integrate acquisition and resettlement & rehabilitation (R&R) in one policy for the first time ever. The new law is the need of the hour.

The author, a Lok Sabha member, was chairperson, Parliamentary Panel on Land Acquisition Bill

(As told to Sandip Das)

It is ironical that, on the one hand, the government is trying to resolve and speed up the land acquisition process for large projects through the Project Monitoring Group set up to assist Cabinet Committee on Investments while, on the other, it is trying to bring a Bill that will further protract the process of land acquisition. One of the commonest reasons for delay faced by large projects is land acquisition.

The Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation and Resettlement Bill 2012, prescribes a 10-stage process for land acquisition. Starting with the social impact assessment (SIA) study followed by the evaluation of SIA by independent expert group, publication of preliminary notification, hearing of objections, publication of declaration, etc, it would take not less than four years to acquire a single plot of land, even with a very efficient government machinery and without any extension in prescribed time-lines. This is assuming that one would be able to manage 70-80% consent of the affected families, and not just land-owners. In a complex case, it would take no less than 6-7 years for acquiring land. In what way this would help us improve our ranking for doing business needs to be ruminated.

Further, the retrospective clause has been reinserted in the Bill after the meetings of GoM and the all-party meet. This attaches an uncertainty factor and makes land acquisition predisposed to litigations. Existing land transactions where no award under Section 11 of the Land Acquisition Act 1894 has been made, or even where award has been made but possession has not been taken or compensation has not been paid for 5 years prior to the implementation of new norms, in all such cases the provisions of the new Act will apply. Any legislation, Ficci has been advocating, needs to be prospective in nature in order to retain investors confidence.

Coming to the special provisions of the Bill, it says that, as far as possible, no acquisition of land should be done in scheduled areas (irrespective of any threshold), as per the Fifth Schedule of the Constitution. This would include many areas in the states of Jharkhand, Bihar, Chhattisgarh, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Gujarat and Andhra Pradesh. So, are we suggesting that these areas require no further development of infrastructure, both physical and social Industry, which can provide employment to large number of people in these areas, would also not come up in the absence of any adequate infrastructure development in these areas.

The Bill also provides the state governments the right to exercise the option of lease arrangements for the land instead of acquisition, thereby retaining the ownership with the farmer or land-owners. Besides many other concerns, leases have uncertainty factors attached to them as they may or may not come up for renewal. It also limits flexibility over the development and operations on the land.

The Bill has fixed R&R provisions and the market value of the land on the presumption that land transactions are undervalued across the country, but ignoring the fact that land prices have witnessed a sharp increase in the last decade. The Bill is certainly going to escalate the already inflated land prices and make it further difficult for the industry to purchase land for expansion or fresh investments. The Bill provides for land acquisition under public purpose, for industrial corridors and NIMZs, but not for the larger manufacturing sector. In case of large manufacturing projects, the government will not assist, even partially, the industry to acquire land to overcome the last-mile acquisition problems.

At this juncture when investments are drying up and we aim to create 100 million jobs by increasing the share of manufacturing in our GDP to 25% in the next 10-15 years, such a legislation is not likely to help. While the government is able to manage all-party support for the Bill, stakeholders remain unconvinced about its benefits, both social and economic.

The author is director, Ficci