Production of any kind of goods and services requires land. However, delay in land acquisition, protests and resistance on the part of the displaced—as has been observed in Bengal and Odisha—have become central tailbacks for investments in the infrastructure sector. Land acquisition is becoming risky and uncertain in India. It has become a national issue around which much mobilisation and protest has taken place. Environmental clearance is another cause of delays, cost overruns and risks in infrastructure projects, which is linked intrinsically to land acquisition. The issue of displacement of inhabitants and the focus on environmental degradation activists in the country has become an opportunity for politicians to create an image of themselves in front of innocent citizens.
While many have observed the problems faced by the poor due to the land acquisition process, there has been little attempt to understand its current status and find solutions for the private sector. The problem has either been due to the bureaucratic way of working of the governmental machinery, which has brought out delays in land acquisition, or in terms of the monopoly of the governments in implementing a suitable land acquisition law benefiting both the entrepreneur and the farmer.
The government, on April 18, 2013, finalised a ‘broad consensus’ on the controversial land acquisition Bill, paving way for its consideration and passage in Parliament. The Bill had some differential impact on farmers and entrepreneurs. It proposed that for setting up private projects and for PPP projects, land could only be acquired through the consent of 80% and 70% of the families affected, respectively. The compensation was fixed four times more and two times more the market rate for rural and urban areas, respectively. The Bill was praised by some and the others reviled it as a complex piece of legislation.
With the BJP-led NDA government driven by the development agenda, there was a new initiative to introduce reforms in the land acquisition procedures. With a thrust on Make-in-India and infrastructure development, the government made necessary amendments during the December 2014 session. The Bill created five special categories of land use—defence, rural infrastructure, affordable housing for poor, industrial corridors and PPP projects—where the central government owns the land, and exempted them from the LARR Act, 2013, provision of 80% and 70% clause and the Social Impact Assessment (SIA). According to the government, the amendments were expected to promote the Make-in-India initiative which seeks to provide boost to domestic manufacturing. As compared to the LARR Act, 2013, which mentions the acquisition of land for private companies, the law passed by the BJP replaced the clause ‘private companies’ to ‘private entities’, which includes companies, corporations and non-profit organisations. They also removed the restrictions on acquisition of land for private hospitals and educational institutes. However, this version of the Bill tabled in Parliament recently suffered strong confrontation from both the Opposition and BJP’s allies who termed it as ‘anti-farmer’ and ‘anti-poor’ mainly because of the removal of consent clause and the SIA, which made the clearance of the Bill difficult.
After a much-heated debate and controversies that surrounded the right to fair compensation and transparency in land acquisition, on March 9, 2015, we saw a U-turn, when the Lok Sabha gave a nod to the new land acquisition law on the account of nine amendments introduced by the Union government. The new law removed exemptions for social infrastructure projects in PPP and clarified that the land acquired for industrial corridors will only be limited to 1 km on either side of the highways and railway lines. Land acquisition for private hospitals and educational institutes is no longer included in the definition of public purpose. The Bill introduced in December allowed the government to exempt the five special categories of land use from the SIA and limited the use of irrigated land through a notification. There has been further addition in the amendments that, before issuing the notification, the government needs to ensure that the extent of the land acquired is in keeping with the minimum land required for such a project. The new law has provided for compulsory employment to one member of the family affected and has proposed for a hassle-free grievance redressal mechanism for land losers, which includes district level complaints as well. Amendments have been made to ensure that, to acquire tribal land, there is consent from the panchayat. The term private entity has been replaced by private enterprise. These amendments will make it easier to acquire land for select projects and expedite pending infrastructure projects. These changes have moderated some of the restrictive provisions in the original law of 2013 and will be very helpful in promoting business as the new Bill would reduce the cost of the acquisition of land for industry that was as high as 40% of the total cost.
From the economy point of view, it is essential to ensure that the land acquisition Bill gets implemented at the earliest and the issue is not further politicised. An immediate reform in the land acquisition procedures was one of the first priority areas of the new government, riding high on the development agenda. Land acquisition is central to the government’s thrust on infrastructure development, and the government would find it difficult to execute its Make-in-India programme aimed at providing a boost to manufacturing and job creation with the objective of taking India back to high growth trajectory.
Geethanjali Nataraj is senior fellow, Observer Research Foundation, and policy lead, KPP, DFID-IPE Global. Richa Sekhani is a researcher at Observer Research Foundation