Towards a Pragmatic Land AcquisitionPolicy for Industrial Use

Main Philosophy behind Land Acquisition Act, 1894

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The fourth aspect of the underlying philosophy is that money can compensate for all losses and once people are paid adequate compensation they can go on to have a wonderful life

The third aspect is that compensation is payable only to the owner of the land or a legally recognized tenant. Everybody else who is dependent on the land are to be ignored.

The second aspect of the philosophy be- hind the Act is that it is constructed around an individual whose land is acquired.

The fifth aspect of this philosophy is

that there is only one way of

development and that is to

industrialize and industrialize even

more and that this will benefit

everybody.

This is the main philosophy behind this Act. The State may directly own lands through acquisition, purchase or by default. That means all lands which are not privately owned are owned by the State. But even in respect of privately owned lands the State has the power of eminent domain.

Industrialization = development

Compensation

Individual centric

Ignore other dependents

State of eminent domain

Process of acquisition under Land Acquisition Act,

1894

01Under Section 4, if the State is satisfied that land in a given locality is required for public

purpose then a public notice to this effect will be put up in the locality. After this the survey of

the land can be carried out.

Hereafter, under Section 5A, any person with a claim in the compensation for the land to be

acquired can raise an objection with the collector within 30 days who will in turn give a

personal hearing.

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The next step is the Section 6, A declaration which has to be issued by the government after

taking into account the objections. This notification is required to set out the details of the the

public purpose for which it is to be acquired. It will be treated as conclusive and after this the

government can proceed to acquire the land.

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After this, a public notice is given under Section 9, asking that claims of compensation be

made to the collector before a notified day.

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The next step is the enquiry by the collector who will decide the value of the land. Section 23

provides that the authority shall take into account the market value of the property on the date

of the Section 4 notification and an additional payment of 15% of the market value . Section

24 says that any increase in the value of the land acquired owing to the use to which it is

likely to be put is to be ignored.

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Section 17 is the urgency clause which permits the collector to take possession of

land in the event of an urgency within 15 days of the Section 9 notice.

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Impediments to Industry Legal Controversies

The main legal controversies are the following:A. What constitutes public purpose for which the

lands are to be acquired and who determines this?B. Is the government obliged to take into account the

kinds of lands it can acquire for instance agricultural as against fallow lands, etc?

C. Who is entitled to compensation under the act? Only the landowners or those dependent on land such as landless labourers, artisans, etc?

D. What is meant by compensation? Does it include only monetary compensation and if so how much?

Impediments to Industry Defining Public Purpose

Firstly, The definition of public purpose under the act is totally vague and the section is much litigated.

Secondly, the courts have also held that if a land is acquired for a particular public purpose and is subsequently used for another public purpose there is nothing wrong with it.

Thirdly, the courts have held that even if a portion of the land is not put to public use but becomes surplus for the use it cannot revert back to the owner because the land has already been vested in the government.

Fourth, while the landowner can challenge the acquisition order such a challenge can only be on the limited ground of quantum of compensation or its apportionment and not on the issue of public purpose unless of course mala fides are proved.

Land Acquired For Yamua Expessway Challenged: The two most important grounds were that1. apart from acquiring lands for the expressway itself, there were other lands being

acquired for amusement parks, etc, which could not be held to be acquired for a public purpose.

2. The second ground was that the land was being acquired and handed over to a private developer.

Impediments- Compensation- How, to whom and How Much

According to the Land Acquisition Act 1894, only monetary compensation will suffice

They were given no rehabilitation, no land for land no jobs, no shares

In Korba, the villagers were protesting against the planned expansion of a 1320 MW power plant set up by LancoAmarkantak

Earlier, we gave our land willingly on the condition that the company would provide us with jobs, said LaharamMurao, a village leader from Imilibhata

To begin with, only those persons are entitled to compensation who have aninterest in the land.

Landless labourers who may have worked on the lands for decades are not to be given any compensation.

If a substantial part of a village is acquired,the artisans on whom the landownersor tenants may be dependant do not have to be provided any compensation.

If common village grazing land is taken over, no compensation will be payable to anybody and if an entire village is acquired the fisherfolk who may be dependent on the river for their livelihood will not get any compensation for loss of livelihood.

How ?

Who ?

Impediments- Compensation- How, to whom and How Much

Firstly, This has to be paid as per the market value of the property. The market value can be determined by looking at amounts received in respect of similar lands in the neighbourhood in the recent past. This can be highly misleading.

In virtually every sale deal a cash component is involved (sometimes very large) which would not be reflected in the sale deed. Moreover, there may not be any sale of lands in the nearby area in the recent past which gives a completely arbitrary power to the authorities to Decide the market value

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How Much ?

Secondly, at no stage is the future price of the property to be considered. An agricultural property would be worth much less than commercial property. Similarly property acquired for constructing a special economic zone (SEZ) would subsequently be valued much higher. But the Act itself provides that the use to which the Property will be put to in the future is not to be considered.

Thirdly, the history of such displacement has shown that poor people often do not know how to invest money, can be easily misled or misguided and ultimately be left with

nothing.

Singur Case The size of plots acquired were non-negligible The majority of those affected were marginal

landowners engaged in cultivation The governments compensation offers were

approximately equal to the reported market values of acquired plots on average, but the inability of the official land records to distinguish between plots of heterogeneous quality meant that a substantial fraction of farmers were under-compensated relative to market values

Those under-compensated were significantly more likely to refuse the compensation offers, as were those whose livelihoods were more dependent on agriculture;

Incomes and durable consumption of affected owners and tenants grew slower between 2005 and 2010 compared with unaffected owners and tenants earnings of affected workers fell faster than unaffected workers.

Land acquisition resulted

in substantial economic hardship

for large sections of

the rural population, for many of

whom compensation

offered was inadequate.

Stakeholder wise Analysis

The land chosen by the former Government

Was preferred for its availability of infrastructure

Renewal of lease every year

Demanded a huge compensation

TATA Motors

Forced to submit their land holdings details

Inadequate compensation

Delayed housing facilities

The land was the most fertile in West BengalFarmers

Was advised to maintain the status quo of land distribution

Cannot terminate the lease forcibly

Competition

Government

Major Criticisms

Designed by the British to serve their only purpose of taking-over land to serve their colonial interests, the law is too narrow and lacks humanitarian touch and sense of justice that any modern law should have.

Method of fixing the monetary compensation No consideration of rehabilitation

A lack of rehabilitation policy violates Right to Life under Article 21 and Right to Equality under Article 14 (interpreted as right against arbitrariness) of the Constitution of India.

Perversities in Compulsory Acquisition in India Unfair Process of Valuation Natural Resources and Intangibles

Contd.. No provision for dialogue with the affected people- a mockery of

democracy The objections will be valid on one or more of the following grounds:

That the purpose for which the land is proposed for acquisition is not a public purpose.

That the land is not or less suitable than another piece of land for the said purpose.

That the area under acquisition is excessive.

That the acquisition will destroy or impair historical or artistic monuments or will desecrate religious buildings, graveyards and the like.

Total silence about project affected landless people- Violation of traditional community right

Vague and wide Definition of Public Purpose- Lack of application of Section 4 and Section- 3(f) rules.

Key contentions against Land Acquisition Act, 1894 & Resolutions

Proposed

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The Act forbids land acquisition when such acquisition would include multi-crop irrigated area. Additionally, wherever multi-crop irrigated land is acquired an equivalent area of cultivable wasteland shall be developed by the state for agricultural purposes.

Definition of Affected Families has now been expanded to

include livelihood losers as well.

Attempts at providing alternate

livelihood or lifelong support is

attempted in the new Act

Public purpose now defined as,

For strategic purposes relating to

naval, military, air force, and

armed forces, infrastructure

projects

project for planned development or

the improvement of villags.

Rehabilitation and resettlement ignored

Compensation

Rights Of The Land Owners (Only)

Limits on acquisition

Ambiguity regarding Public Purpose

4 times the registered value will the compensation in rural areas and two times will be in case of urban areas

Key Elements of LARRA 2013

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8Return of Unutilizedland

Acquisition of multi-crop land

Consent

Displacement

Compensation

Provisionsfor SCs & STs

Resettlement & rehabilitation

Social impactassessment

Requires the consent of no less than 70% for PPP and 80% forprivate projects respectively.

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Time bound assessment to be done within six months.2

Safeguards food security and to prevent arbitrary acquisitionby directing states to impose limits on the area underagricultural cultivation that can be acquired

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Compensation to be four times the market value in rural areasand twice market value in urban areas

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No one shall be dispossessed until and unless all payments aremade. Multiple displacements of single owner are not allowed

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Development Plan has to be prepared for settling land rights,One-third compensation paid up front, Resettlement in thesame scheduled area, Approval from local bodies, fishing rightsand additional subsistence

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Affected families includes anyone whose livelihood is affected by the acquisition, Choice of employment or gratuity ,Employment in the project for which land is acquired (or) One-time grant of Rs.5 lakh per family (or) Annuity payment of Rs.2,000 per month per family for 20 years.

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States to return the land either to owner or to the State LandBank.

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Land Acquisition , Rehabilitation and Resettlement Act, 2013

ISSUE 1894 act 2013 act

Compensation Based on the market value

Market value doubled in rural areas but not in urban area

Market value Based on the current use of land. Explicitly prohibits using the intended use of land while computing market

Higher of: (a) value specified for stamp duty, and (b) average of the top 50% by recorded price of sale of land in the vicinity

Solatium 30% 100%

Profit sharing - If the acquired land is unused and is transferred, 20% of the profits shall be shared with the original land

Recent amendments made in the Act Modi government:

Removal of consent clause and Social Impact Assessment

including 13 so far excluded Acts under the Land Acquisition Act

multi-crop irrigated land can also be acquired for these purposes

mandatory condition for provision of job for those whose land is acquired for industrial corridorsOppositions view:

Congress has strongly opposed the ordinance saying anybody who is pro-farmer should raise their voice against it. But according to an Indian Expressreport, Haryana and Kerala wanted to remove the consent clause for PPP or bring it upto50%. States like Assam, Haryana and Himachal Pradesh felt that the definition of affected family is too broad.On social impact assessment, Karnataka, Kerala, Maharashtra and Manipur all demanded that the process be restricted to only

large projects.

Land Acquisition , Rehabilitation and Resettlement Act, 2013

Arguments against the ACT: No reference to adivasis who live in areas that are still not covered by the Fifth Schedule

ambiguous last resort principle

Heavily loaded in favour of land owners

arbitrary mark-up to the historical market price to determine compensation amounts

places no limit on total compensation or number of claimants

The beneficiaries of the Bill, with guaranteed jobs for 26 years, will have no incentive to be productive

Amartya Sen claims prohibiting the use of fertile agricultural land for industries is ultimately self-defeating

bill fails to adequately define "public purpose

Bill's sections 97, 98 and 99 are incongruous with other laws of India in details and intent

Does not mandate a process by which the time involved in land acquisition is reduced from current levels

Arguments favoring the ACT:

Comparative Analysis with Other Countries

Land Acquisition Principles

value to the owner

just compensation

reasonable compensation

most of the Commonwealth countries USA ChinaAustralia Philippines British ColumbiaHongkong Brazil

Cambodias

JapanSingapore & Philippines China, India,

New Zealand, Austria

compulsory procedures Consultative processes

Land Valuation Methods

Comparable sales

techniqueReplacement

value

Net value of income from

the land

Arriving at land values

through negotiation

Determining original land use value as set by the

state

Malaysia, China, the US, india Philippines Tanzania

Peru, Singapore,

Japan China

Process of Land Acquisition

Principle of Land Acquisition

Land Valuation Methods

Conclusion

The Land Acquisition Act 1894, from the colonial period till thechanges followed in 2015 by Modi government has tried toaddress the shortcoming of previous acts and Bills, but onlyfixing the compensation or reducing the indirect cost and timetaken for acquiring land will not lead to a point where the giantproblem of land acquisition will curtail .

So, learning from the countries abroad about the principle andprocess of land acquisition methods, valuation methods willcertainly help in better implementation of land acquisition bills.

For eg. Negotiation in valuation of land, value to the owner andconsultative procedure will help in conducive process of landacquisition, both for landowners and government.

References

Basu, P. K. (2007). Political economy of land grab. Economic and Political Weekly, 1281-1287.

Cernea, M. M. (2000). Risks, safeguards and reconstruction: a model for population displacement and resettlement. Economic and Political Weekly, 3659-3678.

Ghatak, M., Mitra, S., Mookherjee, D., & Nath, A. (2013). Land acquisition and compensation: what really happened in Singur?. Economic and Political Weekly, 48(21), 32-44.

Ghatak, M., & Ghosh, P. (2011). The land acquisition bill: a critique and a proposal. Economic and Political Weekly, 46(41), 65-72.

Morris, S. (2007). Towards reform of the land acquisition framework in India. Indian Institute of Management Working Paper, (2007-05), 04.

Mishra, B. (2013). The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) Comparative Presentation with LA Act 1894. Rehabilitation and Resettlement Act.

Rigg, J. (2006). Land, farming, livelihoods, and poverty: rethinking the links in the rural South. World Development, 34(1), 180-202.

Sampat, P. (2013). Limits to Absolute PowerEminent Domain and the Right to Land in India. Economic and Political Weekly.

Sau, R. (2007). Second Industrialisation in India: Land and the State. Economic and Political Weekly, 571-577.

Singh, R. (2012). Inefficiency and Abuse of Compulsory Land Acquisition: An Enquiry into the Way Forward (No. 209).

Sarkar, S. (2011). The impossibility of just land acquisition. Economic & Political Weekly, 46(41), 35-38.

https://www.youtube.com/watch?v=iG9xK3QNy3Q&t=0--Farmers sit with kerosene on pyres protesting land acquisition in Madhya Pradesh