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(Article) CSM - December 2012: The Land Acquisition and Rehabilitation Resettlements (LARR) Bill 2011

The Land Acquisition and Rehabilitation Resettlements (LARR) Bill 2011

The Indian economy has traditionally been an agrarian economy, where 70% of the population is dependent on agriculture as their primary source of livelihood. Significantly, land is also the most essential asset for the development and growth of any nation, particularly in the infrastructure sector. To fulfill this said objective, the Government has to acquire land under the Land Acquisition Act, 1894 and 18 other special Acts, which are applicable to various other sectors including Highways, Railways and Ports.

Land acquisition and compensation have always been an emotional and highly contentious issue between the Government and landowners. Recent agitations and protests by farmers and land owners against the Government for unfair compensation and forcible acquisition of land in Singur and Nandigram (W.Bengal), Jaitapur (Maharashtra) and Greater Noida (U.P) have been witnessed by the world.

After three rounds of vigorous debate, a Group of Ministers has approved the controversial Land Acquisition Bill, with few changes from the version presented to the Union Cabinet last month. This paves the way for the Bill to be introduced in Parliament in the winter session. Land acquisition is the process by which the government forcibly acquires private property for public purpose without the consent of the land-owner. It is thus different from a land purchase, in which the sale is made by a willing seller. Though land is a state subject, “acquisition and requisitioning of property” is in the concurrent list. Both Parliament and state legislatures can make laws on this subject. The government had introduced a Bill to amend this Act in 2007. That Bill lapsed in 2009 at the time of the general elections. The government enacted a new bill in 2011.

In a history spanning 117 years of pre and post Independence India, for the first time an honest attempt has been made by the Government of India to outline an enactment for rehabilitation and resettlement of the landowners and farmers, whose land is to be acquired under the new draft bill ‘The Land Acquisition and Rehabilitation Resettlements (LARR) Bill 2011’. The said bill seeks to strike a fine balance between the need for facilitating land acquisition for various public purposes, including infrastructure development, industrialization and urbanization, while at the same time eloquently addressing the apprehensions and fears of the landowners and farmers and those whose livelihoods are dependent on the land being acquired, by providing a transparent and legal framework aimed at adequately compensating people for the loss of their land as well as ensuring the suitable rehabilitation of those who have been displaced.

The preamble to the Bill says ‘A Draft Bill to balance the need for facilitating land acquisition for industrialisation, development of essential infrastructure facilities and urbanisation, while at the same time to meaningfully address the concerns of farmers and those whose livelihoods are dependent on the land being acquired’. While the ultimate end of land use here is specified as a matter of public purpose the present function of the land as meeting the public purpose of food security is diluted to highlight it merely as a social concern of the farmers. The issue is dealt as a case that can be solved through monetary compensation. Only the social security aspect of the farmers is focused here, though not completely, while the ecological and food security aspects remain in the dark.

The preamble also claims that the draft bill aims to mitigate the adverse impacts on habitats and is sensitive to the natural resource base. But the claim is not reflected in the clauses that follow. It also speaks about ensuring a humane, participatory, informed, consultative and transparent process of land acquisition and the realization of a stage in which the affected persons become partners in development. It is true that the draft policy does have indications of being more humane, participatory, consultative and transparent compared to the existing law.

The issues raised here is to highlight how much more humane, participatory, consultative and transparent it can aspire to be.

While appreciating the concept of partnership in development, the note also attempts to highlight the nature of development envisaged by the policy makers and the extent of partnership offered to the stakeholders concerned.


Despite sharp divisions over the consent requirements, sources at the GoM indicated that the final draft says only two-thirds of landowners will have to agree before land can be acquired for private sector projects as well as joint private-public partnerships. The original Bill had called for 80 per cent consent from both landowners as well as those who stood to lose their livelihood. Industry lobbyists had pushed for this requirement to be diluted. It is not clear what has been decided on the other controversial issue of retrospective effect. The original Bill had stipulated that its compensation and rehabilitation provisions would apply retrospectively to ongoing acquisitions which had not yet completed the process of land transfer under the old Land Acquisition Act, 1894. Sources say this clause has been removed and instead, a cut-off date — to be decided later — will be set for the new Act’s provisions to come into force. “The Bill is finalised. We have finalised the draft,” Agriculture Minister Sharad Pawar, who chaired the GoM, told journalists after the meeting. “On each and every issue where there were different views, we succeeded in bringing [about] some understanding.” The Bill, now named The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Bill, was originally introduced in Parliament in September 2011. Thereafter, it was referred to a Standing Committee. The Cabinet, which considered a revised draft last month, referred the Bill to the GoM after several Ministers objected to provisions that were seen as hurdles to infrastructure development and investor sentiment.

Some Revolutionary Features of this Bill Impacting Urban and Rural Areas:

  • It mandates that the awarded compensation amount is not less than twice that of the market value determined, whereas in the rural areas it will be not less than six times the original market value.
  • It also proposes that the consent of 80% of the project-affected families will be mandatory, if the Government proposes to acquire land for the use by private companies for stated public purpose or PPP projects other than that for national highways.

  • The draft bill further suggests that under no circumstances should multi-cropped, irrigated land be acquired and most of such land lies in the Indo-Genetic plains covering Punjab, Haryana, Uttar Pradesh, West Bengal and Bihar.

  • The draft bill also gives some relief to the landowners by creating a provision that it will not be acquiring land for private companies for their ‘private purpose’.

Steering clear of the debate regarding the Government’s role in land acquisition, the draft bill offers land owners a bigger share of the rewards of industrialization and urbanization over and above the liberal compensation and huge award package for land owners that includes a subsistence allowance of INR.3,000/- per family per month for a year, INR 50,000 for transportation, an annuity of INR.2,000/- per family per month for 20 years, 20% of the appreciation in value of land during each transaction for 10 years, and mandatory employment besides the payment of 100% solatium against 30% solatium of the existing Act. The bill also considers the pain of the homeless (including landless) landowners and hence proposes a free of cost constructed house on 150 square metres of a housing site in rural areas or 50 sq meters in urban areas. The bill further provides that where land is acquired for urbanization, 20% of the developed land will be reserved and offered to land owners, in proportion to their land acquired.

Positive elements of the Draft policy at a glance

  • Drive towards a national law to provide for the resettlement, rehabilitation and compensation towards loss of livelihoods
  • Combining R&R and Land acquisition laws than treating them separately as different entities
  • Public purpose once stated cannot be changed in the case of private companies
  • Urgency clause initiated only for strategic purposes and cases of natural calamity and in ‘rarest of rare’ instances which is a good attempt though the term still appears to be vague
  • Offer of various resettlement and rehabilitation benefits and monetary compensation for the land lost
  • The policy advocates that about 25 infrastructural amenities should be provided in the resettlement area which include Schools and playgrounds, Health Centres, Roads, electric connections and drainage, Irrigation and transportation facilities, Sanitation facilities, Assured sources of safe drinking water for each family and cattle, Anganwady, Places of worship and burial and/or cremation ground, Fair price shops and seed-cum-fertilizer storage facilities, Grazing land, One community centre for every 100 families etc
  • Compliance with laws like The Panchayats (Extension to the Scheduled Areas) Act, 1996, The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006, Land Transfer Regulations in Schedule V Areas which ensure that the local Panchayat and the Tribal population have their say in matters regarding land acquisition. The only question is whether the Grama Panchayats in general areas will have a stake in the land acquisition process.
  • Formation of LA&RR Dispute settlement authority in the National and state level; Formation of State Commissioner for RR and RR committee at the project level – The institutional setup highlights the increased significance of RR
  • Return of land to original owner if not used in 5 years for the purpose for which it is acquired with one-fourth of the award amount for the land acquired
  • The questions sought in the SIA like, whether extent of land proposed for acquisition is the absolute bare-minimum extent needed for the project; whether less or non-displacing alternatives not technically or geographically available significant in the process of land acquisition
  • Multidisciplinary expert group to assess the SIA and public purpose, consisting of two nonofficial social scientists, two experts on rehabilitation and a technical expert related to the project
  • Collector of the district, where the acquisition of land is proposed, should explore the possibilities of utilising waste, degraded, barren lands and that the agricultural land, especially land under assured irrigation is being acquired only as a last resort
  • No notification shall be issued unless the concerned Gram Sabha at the village level and equivalent forum in Urban Local Bodies, as the case may be, or Autonomous Councils in the Sixth Schedule Areas have been consulted in all cases of land acquisition
  • If a Notification is not issued within six months from the date of appraisal of the Social Impact Assessment report by the Expert Committee then the same shall be deemed to have lapsed and a fresh Social Impact Assessment will have to be undertaken
  • Acquisition would not be done in part of the house or building if owner desires that the whole of the building is acquired. On the other hand, like every

act or bill there are pros and cons. Developers and analysts feel the draft bill will not only make land acquisition difficult for industrialization and urbanization, but will also add to the already high costs of private parties. The definition of ‘public purpose’ which has been provided is obscure and ambiguous; which might become the focus for future litigations in court due to its interpretation and actual meaning during the practical implementation of the bill. The leader of the National Alliance of People’s Movement, Medha Patkar showed her disagreement with the Bill as it is riddled with contradictions and suggested that “the adequate compensation could be “land for land” and not cash as compensation. For a farmer the land is his livelihood and no amount of cash can compensate him or her when land is acquired for any public cause.” The Constitution of India guarantees the ‘Right to Equality’ and does not permit inequality among its citizens; hence unless and until every land acquisition is compensated for in the same way, the Bill cannot do justice to those who really need help. The same issue of inequality may also be racked up in the land acquisition made under 18 other special Acts, wherein the benefits of ‘Rehabilitation & Resettlement’ is not provided; the time for passing awards within the stipulated 2 years could also frustrate and be contradictory to the very purpose of this bill. Another major drawback of this Bill is that the compensation or value of the land is determined in excess of estimated market value, which is totally unfeasible.

The Bill seeks to calculate the market value as the average costs quoted over three years in various sale deeds. In actuality the rates of the property in India are always underwritten in sale deeds and are totally unrealizable, hence the deprived landowner/farmer shall never get the actual market rate. In respect of 80% consent for acquisition of land by Government for private parties to fulfill the ‘public purpose’, there are possibilities that the actual land owners may be coerced (by local goons, touts or by the local leaders) who force them to give their consent, as has been evident in various cases under the ‘Slum Rehabilitation Act in Mumbai wherein slum-dwellers were forced to give their consents, so that builder could construct buildings.

The draft Bill portrays a rosy picture of ‘public welfare’ and also guarantees a number of benefits to those who are willing to sell their lands; however, there is no perfect mechanisms to make certain that the affected people undeniably get their rightful benefits. With so much of concern for the poor farmers or small land owners, the draft Bill is still a buyer’s Bill, not a seller’s rights document. Hence, the bill must provide a comprehensive and balanced mechanism, which includes a fair and transparent procedure for land acquisition and adequate welfare measures to protect the rights of the deprived landowners and poor farmers, so that they could also voluntarily contribute to the growth of the nation instead of causing obstructions by agitating and protesting. Such an objective is only possible, if the landowners and farmers are adequately compensated, their livelihood is secured and that their families are rehabilitated; only then will this bill fulfill the true objective of a ‘Welfare Nation’ built by the people of India for the people of India.

However, the ambiguity of the term ‘public purpose’ continues to exist in the present draft policy. Or rather it is exactly this ambiguity which is made use of by the State as a weapon to justify any act of land acquisition. The following categories are considered as public purpose – Strategic purposes, Infrastructure and Industry, Land acquired for R&R purposes, Development of village or urban sites for residential, health and education purposes, Land for private companies for public purpose and needs arising from natural calamities. Out of this, categories like Infrastructure and Industry and land for private companies for public purpose can be really misused. These are often passed off as public purpose initiatives by offering employment opportunities to the locals and highlighting regional development. But cases like Cochin International Airport Ltd with very low state Government share, where Golf course and multiplexes are being built in the agricultural land acquired in the name of the airport and the Smart City in Cochin (IT park) where only 50 % of acquired land need to be used for industrial purposes show how land acquired in the name of public purpose and with public money is exploited for private interests. In the present ambit anything and everything can be defined as public purpose and it is very much possible that private firms would make undue gain out of the situation.

The draft bill states that the land acquisition can take place only if 80 % of the project affected families give consent to the proposed acquisition. Though it is an appreciable and revolutionary decision if implemented genuinely, fact is that this is applicable only for those acquisitions where land is being acquired for private companies for immediate use or end use. The consent of the project affected families doesn’t count when Government acquires land for its own use, hold and control. This decision  is in complete negation of the people’s right to informed consent when the situation is that majority of the land acquisitions still take place for state sponsored projects, especially in Kerala.

The draft policy mandates that Social Impact Assessment should be done by the appropriate Government in the Pre-notification stage and should be examined by independent multi-disciplinary expert group. Also the legitimacy of the ‘public purpose’ and the SIA have to be approved by the Government approved committee. The R&R scheme has to be finalized within 6 months of the preliminary notification. But public hearing comes only in the Notification stage after Preliminary notification is published. After which the Draft Declaration and R&R scheme is published and Awards given. Though the process do have positive elements like checking the legitimacy of the public purpose given and conducting the SIA, it would no less terminate or reduce the issues that is generated during a land acquisition process today.

The main flaw in the process is the reduction of the concept of land to a social entity devoid of its ecological and productive properties. Though the draft says that the environmental costs, benefits and impacts are to be included in the report the focus of the SIA as detailed in the policy has its focus on socioeconomic and institutional impacts. The draft says that the SIA report will be made available when EIA is conducted in a later stage. What calls for is a multi-impact assessment, including environmental impacts, food security impacts, livelihood impacts, institutional impacts and other social impacts in the context of large scale acquisition of agricultural lands, wetlands and forest lands happening in the country. The significance of Environment impact assessment before acquiring a wetland in Kerala is not negligible considering the aspects of water conservation, food security and ecological balance. But as per the present laws of the state, EIA is not mandatory before land acquisition and need to be conducted only once the land is acquired and reclaimed and is made fit for industry. The issue here is of reducing a larger ecological concern of wetland destruction to cases of air and water pollution that any industry may bring about. The Pollution Control Board which comes to the scene in a later stage of the play acts merely as a licensing agency for the industry to function.

Manjeet Singh