Breaking the impasse on Land Acquisition Bill

cover story sept 2015

  • Bappaditya Chatterjee

Call it a Land Ordinance V4.0! The Centre indicated that it might promulgate a land ordinance for the fourth time to keep its “continuity” as it failed to pass it in the monsoon session of Parliament. The Land Ordinance lapsed on August 31. The Centre could not take a unilateral decision to prevent this because it does not have a majority in the Rajya Sabha.

All eyes will be on the winter session of Parliament when the Joint Committee of Parliament on land headed by the Bharatiya Janata Party (BJP) MP S.S. Ahluwalia submit its report. S.S. Ahluwalia told BE, “I would not like to go into the details of the issues raised by the members of the committee. We have looked into all the concerns related to the land bill. We have evolved a consensus on some key issues but there are differences on some others. The committee has decided to give its report by the winter session of Parliament.”

Nevertheless, the Ordinance has become a bone of contention at a time when Prime Minister Narendra Modi and his “Team India” are pitching hard for industrialization. Historically, the issue of land acquisition is long pending. Until 2013, land acquisition in India was governed by the Land Acquisition Act, 1894. This law was introduced during British rule and it managed to survive for more than 65 years after India attained independence from the British in 1947. Subsequently, a 1984 amendment to the 1894 Act allowed the government to acquire land for a ‘public purpose’ or for a ‘private company’. Jairam Ramesh and Muhammed Ali Khan have stated in Legislating for Justice—The Making of the 2013 Land Acquisition Law, “The 1894 Act was a comparatively short legislation that left much to the discretion of the acquiring authorities.” So, as per the 1894 Act, the government could acquire land even for a private company. This clause was at the heart of the nexus that evolved between builders and politicians over the years.

In 2013, the UPA government passed the Right to Fair Compensation and Transparency in Land Acquisition, Resettlement and Rehabilitation Act, 2013, to replace the 19th century Act. Jairam Ramesh, an economist and politician belonging to the Congress party, had told BE earlier, “The UPA Act was aimed at ensuring the land is acquired strictly for public welfare projects and landowners are adequately compensated and rehabilitated.” The protests and outrage began after the Narendra Modi-led NDA government decided to bring amendments to the RFCTLARR Act (LARR 2013 in short).

What prompted the PM to bring amendments to the LARR Act, 2013?

Narendra Modi was being sounded by industrialists that the Land Acquisition Act of 2013 was one of the key reasons holding back investment. In fact, the latest Economic Survey released in February, 2015, highlighted that “land acquisition” was a top reason for 161 stalled government projects. The survey also said, “India’s recent PPP (public-private partnership) experience has demonstrated that given weak institutions, the private sector taking on project implementation risks involves costs (delays in land acquisition, environmental clearances, variability of input supplies, etc.).”

Arvind Panagariya, the vice-chairman of the NITI Aayog said in a recent public speech, “The Land Act, 2013, is an onerous Act under which, by all calculations, it will take up to five years for acquiring land assuming that all steps progress smoothly.” In fact, Narendra Modi perhaps realized, if this is the case, his pet project-‘Make in India’ would suffer a lot. The NDA government thus proposed amendments to the Act of 2013.

Opposition’s position

The Opposition led by the Congress and some of its allies raised strong objections to the new amendments saying that the new bill is anti-farmer. “By December 31, 2014, the LARR 2013 stood amended through an Ordinance. By any standards, the amendments are regressive and anti-people, anti-farmer, and anti-agriculture. All in all, the amendments in the Ordinance 2014 make the LAA (Land Acquisition Act) 1894 look benign in comparison,” said a study by Persis Ginwalla, an activist with Jameen Adhikar Andolan Gujarat (JAAG), and Sagar Rabari, an activist associated with the land rights struggles and the Secretary of Khedut Samaj. Arguing against the Ordinance, activist Aruna Roy told BE, “The problem is that they are tampering with the consent clause and they are also dealing negatively with the social impact assessment. I think what they are doing now is really going back and reneging on all their promises.”

Arvind Panagariya, the vice-chairman of the NITI Aayog said in a recent public speech, “The Land Act, 2013, is an onerous Act under which, by all calculations, it will take up to five years for acquiring land assuming that all steps progress smoothly.”

cover story sept 2015 1

However favouring the Ordinance, Union Finance Minister Arun Jaitley said it was aimed at speeding up development in five areas: development of industrial corridors, social infrastructure such as education, rural infrastructure such as roads and power, housing for the poor, and the country’s defence capabilities. The ordinance makes land acquisition easier in these areas by exempting them from several provisions of the LARR 2013.

LARR 2013 vs Ordinance 2014

Out of the total 15 amendments in the NDA bill, nine key amendments have been opposed by the Congress and a number of opposition parties.

  • First deals with the ‘consent’ clause. As per the UPA law, land could be acquired only with approval of 70% of landowners for Public Private Partnership (PPP) projects and 80% for private companies. However, the amendment, brought in by the NDA removed this provision of ‘consent’ for acquiring lands for five purposes – Industrial corridors, PPP projects, Rural Infrastructure, Affordable Housing and Defence.
  • The Ordinance allows exemption for projects in these five categories from requiring Social Impact Assessment to identify those affected, and from the restrictions on the acquisition of irrigated multi-cropped land imposed by the LARR Act 2013.
  • The Ordinance changes acquisition of land for private companies mentioned in the LARR Act, 2013 to acquisition for ‘private entities’. A private entity could include companies, corporations, and non-profit organisations.
  • According to the Act 2013, if the land remains unutilised for five years, then it needs to be returned to the owner. But according to the Ordinance promulgated by the NDA, the period after which unutilised land needs to be returned will be five years or any period specified at the time of setting up the project.
  • As per the new law, if any government official commits an offence during the process of acquisition, he/she cannot be prosecuted without prior sanction from the government.
  • The amendments propose to include 13 legislations such as the National Highways Act and the Railways Act, etc. that were exempted under the purview of the LARR Act in the compensation, rehabilitation and resettlement provisions. This is, however, seen as a pro-farmer move as there was no uniform central policy of rehabilitation and resettlement.

The Opposition led by the Congress may have seemingly scored a victory by forcing the Narendra Modi-led NDAgovernment to dilute the provision relating to the consent clause in the land acquisition law, but the government has now come around to the view after consulting legal experts that there is actually no need for any drastic change to the 2013 law.

Analysis of Ordinance and LARR 2013

On the exclusion of the consent clause and Social Impact Assessment (SIA), activists said that prior and informed consent and SIA became mandatory elements for all projects not covered under the ‘public purpose’ category under the LARR Act. The Act of 1894 allowed the government to undertake land acquisitions without any form of discussion with the people who were to be displaced.

The UPA brought out the LARR Act and introduced the consent requirement albeit with a caveat. The consent requirement was necessary for PPPs where the ownership of land vested with the government and private companies with a public purpose. It was, however, not applicable to public sector undertakings and for ‘public purpose’. “Gram sabha’s consent was also introduced for the first time in the 2013 (land) Act, along with the introduction of a category called ‘affected families’, i.e. consent, not only of land owners only, but all such families that derived their sources of livelihood/income, directly or indirectly, from the said land. In other words, the participation of the people and their voice in ‘development’ was legislated in the LARR Act, 2013,” Persis Ginwalla, an activist with Jameen Adhikar Andolan, told BE.

The SIA clause takes care of people residing on land, and the extent of livelihood generation for the local population who are displaced from land-based occupations.

“The ‘consent’ of the farmers is the prime condition not only because of economic aspect but because of self respect of the farmers. Consent should be made mandatory. The Land Ordinance is pro- corporate and there is no substantial gain for the farmers,” Vikas Baliyan, Spokesman, Rashtriya Kisan Mazdur Sangathan, Uttar Pradesh told BE.

He also said, “At least 1/10th part of the acquired land should be returned to the concerned farmer after the said land is fully developed. In addition, one person should be given government job in one unit of family. If the affected family is belongs to a joint one, accordingly jobs should be ensured unit wise.”

Two of the most crucial elements of the Act stands amended by the Ordinance. “Amendment 3(i) of the Ordinance does away with both these requirements i.e. consent and SIA, for “private hospitals and private educational institutions” (which were earlier not exempt from these provisions). 3(ii) exempts projects listed in section 10 A, which has been newly introduced. Section 10A is part of a new chapter, III A, which is essentially a listing of projects, which will be exempted from the provisions of consent and SIA over and above those contained within the definition of ‘public purpose’,” as stated in the study of Persis Ginwalla and Sagar Rabari. The list of projects, which are covered by the ‘consent’ and SIA requirement, would be shorter than the one exempting projects from them, Rabari said.

Exclusion of consent clause and SIA is a regressive step and dangerous in its implications – for livelihoods, for farm-displaced and low or semi-skilled workers, for foodgrain production and food security, claimed activists. Historian P. T. Nair told BE, “It poses a serious threat to the socio-economic matrix of the country. Land /private property have not been granted the status of a fundamental right. Eminent dmain powers offered by 1894 Act were a colonial imposition for the exploitative use of land by the colonial power. The LARR 2013 was thus a correction of a wrong and the Ordinance is reversing towards the Act of 1894.”

On the other hand, economist Aditya Parajapati who favours the Land Ordinance told BE, “About 13 million Indians are entering the job market every year. Creation of new jobs should be one of the top priorities of the government. What also needs to kept in mind is that the average holding size of agricultural land has come down over the years. As per the Agriculture Census 2010-11, small and marginal holdings of less than two hectares account for 85% of the total operational holdings and 44% of the total operated area. This could have only got worse since 2010-11. And what this means is that people need to be moved away from agriculture into other areas where they can make a living.” An important part of building a vibrant manufacturing sector is the ease with which land can be acquired.

The Ordinance has substituted the words ‘private company’ in the Act with ‘private entity’. The ‘private entity’ is “any entity other than a Government entity or undertaking and includes a proprietorship, partnership, company, corporation, non-profit organisation or other entity under any law for the time being in force”. The government’s power to acquire land was restricted earlier to companies registered under the Companies Act. This amendment removes this restriction and empowers the government to acquire it for anyone or anything as per its will, choice or discretion, including an individual.

Section 24 (2) stipulated that in cases where land had been acquired under the provisions of LAA 1894 but physical possession had not been taken or compensation had not been paid, then the proceedings were to be deemed to have lapsed and the matter would have to be started afresh under the provisions of this Act. The Ordinance amends this provision by adding another provision, which essentially says that any delay on account of litigation (court mandated stay or injunction), or where the compensation amount lies unclaimed in the court, then such period will not be factored into the computation of the period of limitation.

Ginwalla said that Section 101 of LAAR 2013 stipulated that any land acquired but remaining unutilised for a period of five years from the date of possession would revert back to the original owner/s or their heirs or to the Land Bank of the government. The amendment has substituted the words “a period of 5 years” by the words “a period specified for setting up of any project or for five years, whichever is later”. This is another major concession to the corporate lobby.

The amendment again brings arbitrariness into acquisition and holding. The project proponent may stipulate a longer duration (say 10 or 20 years) for setting up of a project and retain the land (most often for speculation), explained Ginwalla. However, after facing criticism from all fronts, the Centre indicated that the government may continue with the status-quo of LARR 2013.

Was Land Ordinance necessary?

Interestingly, legal experts presented before the Modi government that the LARR Act 2013 did not make ‘consent’ mandatory for private purposes. A. Banerjee, a legal expert practicing in Calcutta High Court, told BE, ” Fresh legal opinion is related to what is contained in section 2(1) of the 2013 Act. It explains land acquisition, compensation, rehabilitation and resettlement but clearly skips the word ‘consent’, which is mentioned in section 2.2.”

It is reported that the government feels land can be acquired under this provision for all infrastructure sectors notified by the department of economic affairs not covering private hospitals, hotels, and educational institutions. Thus, land required for agro- processing industries, projects for industrial corridors, national investment and manufacturing zones and housing can be acquired without prior consent, as per the government’s latest interpretation of the 2013 Act.

The fresh legal assessment provides a leeway. Arun Kumar Saraf, President, MCC Chamber of Commerce & Industry told BE, “Land issue should be bifurcated into two parts – one for the state government’s consideration and another for central government’s intervention. For all major infrastructure issues and projects of public interest such as – building of roads, metro rails, bridges, railways, national highways, dams, barrages, etc., which is built with financial assistance from the central government, the latter should arrange for acquisition of land within its powers by paying suitable compensation to the land owners. In case of industrial developments, the onus should be left to the state governments.”

However, a multiplicity of laws may evolve across states. As an alternative to contentious land acquisition, Saraf said, “One of the alternative proposals to land acquisition is leasing the land from landowners for a certain lease period. Leasing land may also support sustainable project development since the lands need to be returned to the landowners at the end of the lease period in a condition similar to its original form without considerable environmental degradation.” When the land is leased then anybody who has to otherwise give up land or livelihood will be compensated for its growing valuation over time. In this model, the landowner lends his land to the government for a steadily-increasing rent or through an annuity-based system. Some industries already follow the model of leasing lands instead of acquiring it. Energy development projects such as oil and gas extraction, renewable energy projects such as wind power farms and bio-fuel projects often lease the land from land owners instead of trying to acquire the land, which could make the projects prohibitively expensive.


History of Land Acquisition Bill in India

l 1824: For the first time, land acquisition legislation was enacted in India by the British government in Bengal. It was known as Bengal Resolution I of 1824.

l 1839: Bombay President Act, which was similar to Bengal Resolution,was introduced in Maharashtra Karnataka and Gujarat.

l 1850: Land acquisition to build the railway network was introduced under Act XLII of 1850.

l 1852: Land acquisition forpublic purposes was introduced under Act XX of 1952 in Madras Presidency in the states like Tamil Nadu, Andhra Pradesh,parts of Karnataka, Kerala,Odisha and Lakshadeep.

l 1857: Under a uniform Land Acquisition Law the entire British ruled India. Act VI of 1957replaced all previous land laws. The collector was given the authority to fix the compensation. Disputes were sent to arbitrators and their decisions were final.

l 1894: Land acquisition Act of 1894 was passed, which allowed the government to forcefully acquire a land from private land holder for public purpose. The government decided the price.

l 1948: After independence, India adopted the Land Acquisition Act 1894.

l 2007: The Congress-led UPA government proposed amendments, which included social impact assessment, pay for loss and damage, and compensation as per market price.

l 2009: The Land Acquisition (Amendment) Bill, 2009, passed in LokSabha but failed in the RajyaSabha

l 2011: The UPA-II government introduced the Land Acquisition Rehabilitation and Resettlement (LARR) Bill 2011. According to this, a land can be acquired if 80% of the affected farmers agree to give up land, and in PPP projects, 70% farmers are willing to do so.

l 2013: The LARR bill was passed.

l 2014: The LARR bill came into effect.

l 2015: The BJP-led NDA governmentintroduced six major amendments but is facing mass protest.