Legislation for land acquisition is to enable acquisition of land by the government, which is essentially expropriatory by nature, even though compensation based on market value is paid. Until about 10 years ago, ?public purpose? was ordinarily not being questioned until misuse of enactment came to fore. The new Bill comes with some corrections to identified problems but fails on the basics, as it primarily tries to curtail the power of the government to acquire land.
The earlier acquisition price that was based on registration value with 30% solatium reflected a depressed value. This was because both buyers and sellers registered their transaction at a low value to avoid paying higher stamp duty. Low compensation exacerbated a view of the expropriatory nature of acquisition. Instead of correcting the problem, what the new Bill stipulates is the market value and 100% solatium is to be given in rural areas. But the problem comes in urban areas, where the registration rates are fairly aligned to market rate and conceding four times the market value is like a leaking bucket with the attendant consequence of possible collusive behaviour and corruption. ?Urban area? not being defined will not help matters either.
While an expansive and generous definition of ?public purpose? earlier could accommodate projects that should have fallen legitimately within the scope of private purchase, the new Bill has collapsed the list, which is in order. But the problem comes with the insistence on the consent of 80% of the project-affected families. In essence, it will mean getting the consent of land owners, labourers, tenants and shareholders, which will be a near impossibility in our divisive system. The ?urgency clause?, which is an enabler for decoupling taking possession of land from payment of compensation procedure is now limited to only national security and rehabilitation & resettlement (R&R) needs in the event of emergencies and calamities. It means for all other purposes, urgency clause cannot be invoked and we may have to wait for a long, long time for infrastructure and PPP projects for the production of public goods or the provisions of public service.
The combination of R&R with the Land Acquisition Act creates unease. Although laudable in its intention, embedding R&R in a rights-based legislation makes a welfare measure like R&R rights-based. Bringing R&R into private acquisitions will no doubt push up the price of the land. The market factors in such kinds of issues and that is why a market clearing price, which is inclusive of the possible displacement cost, is always higher. Cost spiral in rem is inevitable in the new dispensation. The stipulation of providing R&R for 100% of area even where a small percentage of land is acquired and the rest purchased will push up the land cost, which will disincentivise the setting up of large-scale industry hubs, manufacturing and greenfield projects. Comprehensive R&R package of jobs or annuity for 20 years with indexation, transportation allowance and resettlement allowance for landowners and livelihood losers, along with 25 infrastructural amenities, will push the cost to an unsustainable high, particularly when the unintended consequence is that the number of people queuing up will be much more than the people really affected, a fungible category.
Provision of a minimum one acre of land to each of the displaced families in the command area and one hectare to SC/ST families in any event will create a perverse incentive for families to show splitting of their land as the minimality will give them the benefits of getting multiple hectares of land while losing a small area. This should have been the maximum rather than the minimum, matching with the area lost with arrangements for setting off the cost against compensation.
Multi-crop irrigated land has been put in the negative list of acquisition. A cap has been fixed at 5% on multi-crop irrigated land in the district as the cumulative area that can be acquired in a district. Such restrictive parameters, though appear laudable, actually militate against the land owners. This will limit the sale price of the land regardless of any value addition to the geographical region or the farmers? need to sell it. In future, higher output is expected to come from lesser area and people in the agriculture sector will move to tertiary or industrial sectors but they are likely to be stuck in an excoriated trap of pricing with these restrictive provisions.
While earlier increases in the value of land due to new uses, unfairly, were prohibited from being taken into account for compensation, the current enactment corrects this by providing for 20% of appreciated land value to be mandatorily shared with the original owner. But what is discomforting is the definition of ?affected families? and its spin-offs, which include everyone dependent for the proceeding three years on the land being required, i.e. land owners, labourers, tenants and spare croppers. In urban areas, any family that is residing on the land to be acquired being treated as ?affected family? will give an incentive for squatting, encroachment and nullify the structure of rights created under the Indian law while increasing the liability for R&R without any justification. Although it is spurred by good intentions, the results can be disastrous.
The litmus test of land acquisition is fair compensation so that despite expropriatory nature, land is available for development and fairness permeates the process. Now with a mixture of R&R and arbitrarily generous land compensation, land acquisition is going to cost above the market value, creating a cost spiral. With rights of multiple categories of people, we are giving impetus to a secondary industry including that of land right creation based on fungible parameters and endless litigation. We can surely look forward to more inept bureaucratic handling, more corruption and more of what the country excels at, i.e. more confusion and more garbled signals.
The author is social development specialist, MEPMA, Andhra Pradesh. These are his personal views