India: Update On Land Acquisition Laws In India

Last Updated: 2 October 2013
Article by Madhu

Introduction

Rapid urbanization and industrial growth in almost all major cities has forced government to acquire land for executing infrastructure projects. Due to inadequacy of proper legal regime on compensation and rehabilitation part, such land acquisitions has faced a considerable opposition from landowners and farmers, which finally resulted in delayed execution of projects.

Striking a harmonious balance between the interest of landowners and industrialization growth of country is the need of the day, which Land acquisition Act, 1984 was failed to address. Considering the scenario, two bills "The Land Acquisition (Amendment) Bill 2007 and "The Rehabilitation and Resettlement Bill, 2007" were introduced in Lok Sabha in 2007, but got lapsed on dissolution of 14th Lok Sabha.

Again on 7th September 2011, "The Land Acquisition, Rehabilitation and Resettlement Bill, 2011" was introduced in Lok Sabha, which was finally approved by Indian Parliament on 5th September 2013 with some amendments under the name of "The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013" (hereinafter referred to as "Land Acquisition Bill"/"The Bill").

Land Acquisition Bill aims to provide a central legislation for families affected by land acquisition. The bill will repeal and replace age old Land Acquisition Act, 1984.

Main aim of the enactments is to ensure and adopt humane, participatory informed consultative and transparent process for land acquisition for industrialization and urbanization with the least disturbance to the owners of the land and other affected families; and to provide just and fair compensation to the affected families. The bill further seeks to ensure that the cumulative outcome of compulsory acquisition should be that affected persons become partners in development. The Bill seeks to provide for:

  • Land acquisition process
  • Rights of people displaced by acquisition
  • Method of calculating compensation
  • Requirement of rehabilitation & resettlement,

Land Acquisition Bill aims to be a central legislation, and will apply to all the land acquisition done by central government/ state government except Jammu & Kashmir:

Highlights of the Bill

Major Highlights of the Bill are discussed hereunder:

Applicability

As specified earlier also, the bill is a central legislation and will apply to all land acquisitions done by government (both Central and State Government) except Jammu & Kashmir in following public purpose:

  • Strategic purposes relating to naval, military, air force, and armed forces, any work vital to national security or defence of India or State police, safety of the people;
  • For infrastructure projects including agroprocessing, warehousing, cold storage facilities, marketing infrastructure for agriculture and allied activities such as dairy, fisheries, and meat processing, industrial corridors or mining activities, national investment and manufacturing zones, water harvesting and water conservation structures, sanitation, Government aided educational and research schemes or institutions, Project for sports, heath care, tourism, transportation of space programme;
  • Project for project affected families;
  • Project for housing,
  • Project for planned development or the improvement of village sites or any site in the urban areas or provision of land for residential purposes for the weaker sections;
  • Project for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities

Provision of Bill will apply when government acquires land for

  • Public private partnership projects, where the ownership of the land continues to vest with the government, for public purpose
  • Private companies for public purpose

Consent of Project Affected people for land acquisition

The bill makes mandatory provision for obtaining consent of atleast 80% project affected families in case of acquisition for private companies and consent of 70% project affected families in case of acquisition for public private partnership projects.

This clearly specifies that when the government acquires land directly for declared public purpose, consent of project affected people is not required but when land is acquired for public private partnership project or for private company for production of public goods/ services, consent of 70%/80% project affected people is required to be obtained.

Further land transfer laws applicable in schedules areas shall be complied with before acquiring land in scheduled areas.

The bill provides that provision for rehabilitation and resettlement shall be made when private company acquires land exceeding the limit proscribed by government through private negotiations or private company requests government for partial acquisition of land for public purpose.

Provisions for compensation and rehabilitation and resettlement has been made for landowners, whose land is proposed to be acquired and landless also, whose livelihood is likely to be affected by the said acquisition such as agricultural labourers, tenants, fisherman, hunters, boatmen etc.

Social Impact Assessment Study

Before acquiring land, the Government shall carry out social impact assessment study in consultation with Gram Sabha or equivalent authority in affected area covering following:

  • Nature of public interest involved
  • Estimation of affected families
  • Study of socio economic impact upon families residing in affected area
  • Extent of land, public , private houses, other common properties likely to be affected by such proposed acquisition;
  • Whether land acquisition at alternate place has been considered and was found not feasible
  • Study of social impact from project, nature & cost of addressing them, including environmental cost.

The bill imposes a duty on government to ensure Social Impact Assessment study shall be completed within 6 months from the date of commencement.

Bill also makes provision for open public hearing by the Government, widely publication of social impact assessment report and evaluation of report by independent multi disciplinary expert group appointed by government. If the Expert group is of opinion that project does not serve stated public purpose, or not in public interest at large or cost and other adverse impact will outweigh potential benefits, it shall make recommendation that project shall be abandoned immediately and no further steps will be initiated to acquire land.

Appraisal of Social Impact Assessment Study by expert Group

Social Impact Assessment Study shall be evaluated by an expert group constituted by government. Expert group shall make recommendation within 2 months from the date of its constitution.

The committee shall ensure that

  • There is legitimate & bona fide public purpose for proposed acquisition;
  • The said public purpose is on balance of convenience & in long run, will serve large public interest;
  • Only the minimum area of land required for project is proposed to be acquired;
  • There is no unutilized land, which has been previously acquired in the area.

Central government shall consider evaluation report of expert group before taking decision for acquisition of land.

Further Government may exempt social impact assessment study in case of urgency.

Restriction on acquisition of irrigated Land

Government shall not acquire irrigated multi cropped land. Such land may be acquired only in exceptional circumstances, but acquisition of irrigated land in aggregate for all projects in a district, shall not exceed the limit prescribed by government. Further, whenever irrigated land is acquired, an equivalent cultable wasteland shall be developed for agriculture purpose. Further linear projects such as railways, highways, road, and irrigation projects are exempt from these said restrictions.

For acquiring any land, government shall issue primary notification within 12 months from the date of social impact assessment report, other the same shall be treated as lapsed and a fresh social impact assessment report shall be required.

Rehabilitation & Resettlement

On publication of primary notification, administrator shall conduct a survey and prepare a rehabilitation and resettlement for project affected families. After public hearing, collector shall publish the Rehabilitation & resettlement scheme and government within 12 months from the date of preliminary notification shall public declaration for acquisition of land.

Special provision for Schedules Castes and Scheduled Tribes

Government shall not acquire any land in Scheduled area. In case of acquisition in scheduled area, prior consent of gram sabha shall be obtained.

Compensation

Minimum compensation package shall constitute of following:

  1. Market value of the land shall be the minimum land value, as specified in Indian Stamp Act, 1899 or average sale price of similar land situated in nearest areas, or consented compensation as agreed in case of acquisition of land for private companies or for public private partnership whichever is higher. Market value of land situated in rural areas shall be multiplied by factor of two;
  2. Value of assets attached to land or building as determined by collector;
  3. Solatium, equal to 100% of total compensation;
  4. The Company for whom land is being acquired may offer its shares upto 25% of the Compensation amount. In case the project affected family wishes to avail of this offer, an equivalent amount will be deducted from the land acquisition compensation package payable to it.

There is always a better compensation

  • Where any state law or state policy provides better & higher compensation than this act, affected person may avail such higher compensation, rehabilitation & resettlement under such state policy.
  • When any land acquired under this act remains unutilized for a period of five years from the date of taking possession, the same shall be returned to land owners or land bank of appropriate government.
  • When ownership of any land acquired under this act is transferred to any person for a consideration without any development having taken place on such land, 40% of appreciated land value shall be shared amongst from whom the land was acquired.
  • Provision of this Act shall not apply in case of obtaining land on lease.
  • Prior approval of government is required for change in ownership of acquired land.
  • Any award or agreement made under this act shall be exempt from income tax, stamp duty.

Procedural Timelines

Estimated timelines for acquisition of land as prescribed in the bill are discussed hereunder:

Conclusion

Land Acquisition Bill, no doubt has made an attempt to strike a balance between the interest of farmers and industrialists by giving a fair share to the landowners and making them partner in the growth history of India, but at the same time, it has also raised a wave of concern for the industries such as increased price for acquisition, excessive government intervention, which may actually slow down the acquisition process and might cause further delay in setting up important projects. By adopting an open minded, innovative, consultative and humanistic approach and making stakeholder a partner, all issues/ concerns can be solved easily, ultimately it's only the "approach to tackle the situations", which matters.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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