1. Land acquisition: Balancing growth with stakeholder concerns

Land acquisition: Balancing growth with stakeholder concerns

Instead of removing the applicability of SIA to the five categories of projects, the govt could explore a minimum threshold above which it would be mandatory

By: | Published: March 18, 2015 12:12 AM
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The Bill identifies five categories of projects that land is acquired for—defence, infrastructure, rural infrastructure including electrification, affordable housing, and industrial corridors.

The land acquisition ordinance that amends the Land Acquisition Act of 2013 is currently in force and is waiting for Parliamentary approval.

The ordinance was passed by the Lok Sabha with some changes last week, but its passage in the Rajya Sabha hangs precariously. If not passed this week, before Parliament breaks for a recess, the ordinance will lapse and the changes it brings will no longer be in effect. It is being reported that the government is now trying to facilitate the re-promulgation of the ordinance by proroguing Parliament.

For a long time, acquisition of land was governed by a law framed in 1894. There were several issues in the implementation of the 1894 law, including that of fair compensation, broad definition of ‘public purpose’, etc. About 120 years later, in 2013, the previous government passed major changes to the 1894 law, which substantially tightened norms relating to how and under what conditions the government can acquire land. To an extent, the new Bill loosens those norms once again.

The Bill identifies five categories of projects that land is acquired for—defence, infrastructure, rural infrastructure including electrification, affordable housing, and industrial corridors. These projects will not be subject to provisions of the 2013 Act dealing with (1) requirement of consent of landowners, (2) conducting a social impact assessment (SIA), and (3) limits on acquiring irrigated land.

Under the 1894 Act, consent of landowners was not required when the government wanted to acquire their land. The 2013 Act changes this position in law to require their consent. In fact, consent of 80% landowners was required for private projects and 70% of landowners for public-private projects. The Bill amends this provision to state that when the government acquires land for the above five categories of projects, then consent of landowners is not required.

The 2013 Act requires an SIA be conducted before land is acquired for any type of project. SIA involves an assessment of whether a project serves the stated public purpose, the benefits outweigh the costs and adverse impact, and is in larger public interest. The Bill allows the government to waive the conducting of an SIA for the five categories of projects.

Under the 2013 Act, agricultural land can be acquired only as a measure of last resort. The state government has to set a limit above which such land cannot be acquired. The Bill allows the government to not comply with the limits on acquisition of agricultural land if the project falls under the five categories.

The Lok Sabha added a provision that says that before exempting the project from the SIA or agricultural land requirement, the government should ensure that the land being acquired is the minimum amount needed.

The Bill makes some other changes to the 2013 Act. It brings the compensation and rehabilitation provisions of 13 other laws governing acquisition of land for highways, railways, etc, in line with the Act. The Bill tweaks the rehabilitation and resettlement award in the Act to specify that the mandatory employment for the members of an affected family will include employment to at least one member of an affected farm labour family. The Bill allows the government to acquire land for not only private companies but also non-profit organisations, trusts, etc. The Act requires that land which was acquired and remained unused for five years be returned. The Bill changes this to the later of (i) five years, or (ii) any period specified at the time of setting up the project.

According to the government, these changes are required as several states and ministries have reported difficulties in the implementation of the 2013 Act. The government has argued that national security and development projects need to be expedited and procedural difficulties in acquiring land for such projects must be addressed.

While the Bill does not make any changes to the definition of public purpose, one may question whether it is appropriate to carve out five categories of public purpose projects and exempt them from core norms laid down in the land acquisition law. Let us explain this. In contrast to the purchase of land where a seller is not compelled to part with his land, land acquisition is the forcible takeover of privately-owned land by the government in public interest. The government’s sovereign power to take over privately-owned land is expected to be limited for projects that serve the larger public good. In the law, this greater public good is articulated in terms of ‘public purpose’, i.e. a project for which public interest has a higher standing than private property rights.

In its implementation, the 1894 Act had a chequered history with regard to public purpose—defined in broad terms to include development of villages and towns, housing projects and other development activities such as education, health, etc. As a diverse range of projects could be classified within this broad definition of public purpose, there was no check on the government’s power to forcibly take away private land, thereby leading to misuse of the law. The 2013 Act attempted to limit the scope of such misuse by tightening this definition to include national security and defence, infrastructure, housing, certain income groups, etc. It also introduced the requirement of obtaining consent of a majority of landowners when land was acquired for private and public-private projects.

By creating these five broad categories and exempting them from the requirement of consent of landowners, the Bill may have reverted to loosening the norms for land acquisition. It could be argued that consent of landowners was introduced under the 2013 Act to create a safeguard against the misuse of the government’s power to acquire land for private interests as well as a give landowners a say in the acquisition process. The government will now have to exercise discretion in determining whether a said project can be classified as one of the five projects worthy of not requiring consent of landowners.

It could be anticipated that the 2013 Act’s requirement that an SIA study be conducted for every acquisition of land is not feasible. Instead of removing the applicability of SIA to the five categories of projects, the government could have explored whether a minimum threshold be specified above which SIA would be mandatory.

The Rajya Sabha is scheduled to examine the Bill and a careful consideration is required on how to strike a balance between the need for expediting growth through efficiency and the concerns of diverse stakeholders.

The author is head of Research, PRS Legislative Research

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