The UPA’s Land Acquisition, Rehabilitation and Resettlement (LARR) Act 2013—a bad law that the present NDA government tried to change, but didn’t succeed—has become too heavy a cross for infrastructure development to carry. As per a report in The Indian Express (IE), land acquisition costs have shot up 300%, from `0.8 crore in FY13 to Rs 3.2 crore in the first nine months of FY18. Thanks to the steep increase, highway projects as well as other infra-development projects, including airport expansion, have been affected. The IE report notes that while land costs have been rising since 2012-13, the increase after the LARR Act came into force in 2015 has been steep. The average daily rate of construction of highways has fallen from 22.5 km in 2016-17 to 20.7 km in 2017-18 (till Q3). The pace of land acquisition has also come down, with compensation for land acquisition for projects reaching over `19,600 crore in FY17, up from `9,000 crore in FY15. Also, adding to the land woes is the fact that many states charge a percentage of the acquisition costs as administrative charges for acquiring the land, and with acquisition costs shooting up, so have the administrative charges—Bihar, for instance, charges a hefty 20.5% of the compensation amount as administrative costs, while Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Gujarat and West Bengal charge 10%.
Unrealised economic gains, thanks to projects getting hobbled by the exorbitant land costs, compound the retarding effect of the bad law. Given land is a state subject, there is very little the Union government can hope to achieve if states don’t cooperate. To that end, the Specific Relief Amendment Bill, 2018, that has been passed by the Lok Sabha and now awaits Rajya Sabha approval, should provide some succour. Section 20A (1) of the amendment Bill debars the granting of injunctions that are used to thwart land acquisition “in suits involving a contract relating to an infrastructure project specified in the Schedule, where granting injunction would cause impediment or delay in the progress or completion of such infrastructure project.” However, in the long run, it would be amending/scrapping the land acquisition law that will help.