Friday, June 17, 2011

India’s tryst with Land Acquisition legislation

Farmers need soil to grow crops. Soil is available when land is present and if land is snatched away, growing crops would be next to impossible. Thus, access to land guarantees food production and it also helps in ensuring livelihood security of tillers, farmers and peasants. However, economics is about trade-offs. Given that land to man ratio is relatively low in our country, an economist would argue, it would be rational if available scarce land is put to best possible use that guarantees better return than agriculture. In order to sustain high economic growth, land is needed to make highways, IT plus knowledge parks, SEZs, factories, dams, roads, irrigation canals, nuclear reactors. It is also true that value of land gets higher if it is developed well, is located near a town or city, when access to road, port or railways is easier from such a piece of land and water and electricity are available in the vicinity. A better quality of land would fetch a higher price to a land owner.

We are observing a trend recently when agricultural land is being converted for industrial purposes. There are success stories that tell us that farmers have become millionaires and bought land rovers by simply selling their ancestral land directly to corporates or builders. Other examples of land acquisition by the State for public purpose show that farmers’ agitations against forcible grabbing have been ruthlessly suppressed using police might, be it Singur, Nandigram, Niyamgiri, Kalinganagar, Jagatsinghpur, Jaitapur or Bhatta-Parsaul.

Suggestions for Compensation

Land is a symbol of social status and it has an emotional value attached to it. Land acquisition is subject to numerous complicated issues. Compensation is just one issue among several haunting the land owners during the process of land acquisition. But it is an important issue, which has been much neglected. In India, women, dalits and tribals traditionally do not have title to land. Traditional rights to cultivate are undermined by the modern laws. Without private property rights and land registration, marginalized sections suffer the most during land acquisition. In the absence of registration, small and marginal farmers fall prey to middlemen while selling their land and thus they seldom enjoy the full amount paid as compensation. Compensation can be paid in kind too. Some economists argue that imparting proper training to farmers who have lost their land would help them in getting absorbed in the industrial labour force (proletarianization). Since lump sum money received as compensation can be spent non-judiciously and hurriedly by the not so ‘prudent’ farmers, it is prescribed that long-term annuities are paid to them separately (also called as Haryana model).

The absentee land owners are found more willing to sell their land as they are less interested in cultivation. However, agricultural labourers and share croppers, working on those lands, are the ones who are completely at loss due to this. The National Advisory Council (NAC) has, therefore, rightly said that share-croppers, landless labourers, artisans et al should receive ten days’ minimum wage per month for thirty three years when land is acquired by the State for ‘public purposes’.

Getting the right and fair valuation of land and clearly defining the term ‘public purpose’ are remaining issues concerning land acquisition. Should the value of land be based on the average price of land in the past or it should be evaluated on the basis of its future value, which would be comparatively higher as a result of setting up of industry? In case the State is mediating in the sale and purchase of land, getting farmers the fair price of their land is the demand. The NAC has proposed that compensation for those who lose land will be six times the registered sale deed value including solatium.

Land Acquisition (Amendment) Bill 2007

The colonial Land Acquisition Act of 1894 has been termed as draconian since it allows the State to forcibly acquire land from private landholders for projects of public purpose. Under Section 4 (1) of the Land Acquisition Act, 1894, notification of acquisition has to be published in the official gazette and in two daily newspapers circulating in that locality of which one shall be in the regional language. A person gets only 30 days from the date of publication of preliminary notification to raise any objection to the acquisition. Special powers of urgency under Section 17 (1) allow a district collector to over-ride all objections and acquire private land after the expiry of 15 days from the publication of the notice.

Since a large number of old cases were pending in various courts, the Land Acquisition (Amendment) Bill was introduced in lieu of a new comprehensive legislation. Prior to 2007, the Land Acquisition Act was amended in 1962, 1967 and 1984 after Independence. The amendment proposed in the Land Acquisition Bill (2007) redefines ‘public purpose’ as land acquired for defence (strategic) purposes, infrastructure projects, or for any project useful to the general public where 70% of the land has already been purchased. Still there is a pitched battle on what should be included under the term ‘public purposes’. The clause 5(v)(f)(iii) of the Land Acquisition (Amendment) Bill, which includes acquisition of land for any other purpose useful to the general public has been considered as extremely vague by many legal experts. Provision of providing 30 per cent of land by the Government to the companies is expected to encourage the private sector to acquire more and more land. Once 70 per cent of the land required by a project is acquired by the private parties, the market value of the surrounding area is expected to rise. As a result the Government would acquire the rest 30 per cent of the land at a market price higher than the price at which 70 percent of the land was bought earlier. This would deprive the persons who had agreed to sell their land on a ‘willing seller-willing buyer’ basis. Those people who would sell their land to the Government later are likely to be benefited. In principle, the NAC disagrees with the 70:30 formula.

Those siding with the corporate sector think that the State should not intervene when private parties acquire land. Private businesses and industrial houses can purchase directly from the farmers and this would be beneficial for both the parties. The Left, given its arch rivalry with capitalism, opposed the amendment sought in the Land Acquisition Bill (2007) that State intervention is allowed in acquiring 30 per cent of land for private developers provided they have acquired the remaining 70 per cent for setting up industrial and SEZ projects. The Left parties raised their objection to the 70:30 formula made by the amendment and instead asked for the land to be entirely acquired by the State. During that time when Mamata Banerjee was not the Chief Minister of West Bengal, she opposed this proposition and wanted the formula to be changed to 90:10. However, she now feels that State intervention in land acquisition done privately is justified. In the absence of State intervention it is possible that middlemen and touts of the industrial bodies enter the scenario and start exploiting the small and marginal farmers. State’s role is crucial for just land compensation made by the private parties. The NAC has recommended that it is upto the states to decide the extent of percentage of the total land to be acquired by them.

The Land Acquisition (Amendment) Bill, 2007 was passed by the Lok Sabha on 25th February 2009 but the bill lapsed with the dissolution of the 14th Lok Sabha. Both BJP and CPI (M) opposed the Land Acquisition Amendment Bill and the Relief & Rehabilitation Bill in the Rajya Sabha. The NAC has recently asked for consolidating the Land Acquisition (Amendment) Bill 2009 and Resettlement and Rehabilitation Bill, 2009 under the title Land Acquisition, Resettlement and Rehabilitation Act, 2011.

Food Security

This point could have appeared at the beginning itself: should land be acquired at all for industries? Those who are on the side of food security would say no but we know the answer coming from those who believe that country’s progress lies in industrialization. Agricultural land can be protected if a collector under Rule 4 (vi) of Land Acquisition (Companies) Rules, 1963 reports that a land proposed to be acquired is good agriculture land and that no alternate, suitable site can be found. The National Policy for Farmers 2007 talks about conserving prime farmland. NAC’s recent recommendation that acquisition of barren and less fertile land should be done first for industrial purposes is most welcome since it indirectly talks of conserving our valuable agricultural land under assured irrigation and multiple cropping for food production. But there is nothing new in this recommendation because according to the Ministry of Commerce and Industry the Board of approvals follow the general principle that in case of land acquisition for Special Economic Zones, first priority should be for acquisition of waste and barren land and if necessary single crop agricultural land could be acquired for the SEZs. For the sake of information, one must know that total cultivable land in India has decreased from 185.09 million hectares in 1980-81 to 182.57 million hectares in 2005-06 and total wasteland has decreased from 16.74 million hectares in 1980-81 to 13.16 million hectares during the year 2005-06. Acquired land non-performing for five years should be returned to original owners is another recommendation of NAC, which has been also well received.

Other Recommendations

Under the Panchayats (Extension to the Scheduled Areas) Act, 1996, gram sabhas are empowered to stop acquisition of private and public land, which is done illegally. They need to be consulted before public or private land is acquired in the panchayat as per Section 4 (i) of the PESA Act. Despite these provisions, the country has witnessed several cases of violation of the PESA legislation. Information regarding land acquisition is not passed to the gram sabhas or villages. Therefore, the NAC has made a bold recommendation that consent of 70 percent of the affected families in a gram sabha before acquisition is compulsory. A National Commission for Land Acquisition, Resettlement and Rehabilitation (NCLRR) should be established to assess extent of displacement based on Social Impact Assessment and urgency clause for land acquisition should be used for purposes such as defence, national security and safety of lives as per recommendations of the NAC. Others are saying that landowners in a village should be able to collectively negotiate land transfers and demand for either land-for-land exchange or other types of stake-holding and compensation so that the process becomes participatory.

Apart from the NAC, the recommendations made by the Standing Committee Report on the Land Acquisition (Amendment) Bill 2007 sound rational and egalitarian. It recommended that the optimum size of land required for a project needs to be determined so that excessive acquisition of land doesn't take place. There should be some legislation like Forest Conservation Act 1980 so that agricultural land can be protected like forest land. There is an urgent need to develop wasteland where agricultural land is acquired. Since displacement leads to traumatic psychological and socio-cultural consequences, multiple displacements of affected families need to be avoided. States should declare the area where the tribals are rehabilitated as Scheduled Area. Land rights of tribals and forest dwellers should be recognized as per the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 so that they are compensated and rehabilitated during the process of land acquisition. The details of the property to be acquired viz. khasra numbers in rural areas and quarter number in urban areas should be identified and widely publicized through prominent local English, Hindi and regional language newspapers. There is a need to avoid complications arising due to inadequacy of communicating the intent of acquisition through notification especially in hilly, tribal and remote areas. In order to circulate notification on rehabilitation and resettlement, the Government should rely on newspapers in local vernacular. Affected persons should be provided 60 days from the date of publication of the notification to object to the acquisition of land. Social Impact Assessment study should be done for all projects that displace physically more than 400 families in plain and 200 families in hilly, tribal and scheduled areas (same as NAC recommendation). Highest price of sale deed as indicated in the sale deeds of the last three years plus 50 per cent of the said highest price should be the criteria for assessing and determining the market value of land. For tribal areas, the highest price of a sale deed of the adjoining non-tribal blocks/ village for the last three years plus 50 per cent should be the criteria for assessing and determining the market value of land. Non agricultural land having valuable mineral resources underneath should be properly evaluated for granting compensation. A share of the economic benefits earned due to setting up a project on a land, which is acquired should go to the affected families. Issue of shares and debentures as part of the compensation is impractical and as such issue of shares and debentures should be over and above the admissible compensation. The rate of solatium should be increased from thirty per centum on market value to sixty per centum on market value. (The NAC has, however, demanded for a solatium of hundred per centum). Land Acquisition Compensation Disputes Settlement Authorities (a kind of Ombudsman) at the Centre and State level should be created for the disposal of disputes, which remain pending in the courts of law. Record of large tracts of unutilized land available with various Ministries needs to be kept before further land acquisition.


Standing Committee Report on the Land Acquisition (Amendment) Bill 2007

Land Violence: Law not at fault by Manoj Pant, The Economic Times, 30 May, 2011,

Why We Must Oppose the Land Acquisition (Amendment) Bill of 2009 by D Bandyopadhyay, Mainstream, Vol XLVII, No 35, August 15, 2009,

Pranab Bardhan, The real issues behind land acquisition,

The vexed issue of land acquisition by Pranab Bardhan, The Business Standard, 23 September, 2009,

The ugly side of land acquisition in India,, 31 May, 2010,

Land acquisition, R&R Bills lapse by Sreelatha Menon, The Business Standard, 28 February, 2009

PESA: Government's sheathed weapon, The Economic Times, 20 May, 2010,

FAQ: Why is land acquisition so controversial? by MR Madhavan,, 12 May, 2011,

Provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996,

Madhya Pradesh Panchayat Raj and Gram Swaraj (Amendment) Act, 2004,,%202004.pdf

Report of the Committee formed by the Government of India, Ministry of Panchayat Raj, Raghav Chandra Report,

Report of the Sub Committee appointed by The Ministry of Panchayati Raj to draft Model Guide-Lines to vest Gram Sabhas with powers as envisaged in PESA,

Report of the Committee of Officers on Issues ralating to minor produce in PESA states, February2007,

Farmers' fury by TK Rajalakshmi, Frontline, Volume 27, Issue 20, 25 September-08 October, 2010,

Court slams U.P.'s land acquisition policy by J Venkatesan, The Hindu, 22 September, 2010,

Q+A - India confronts land grabs in industry push by CJ Kuncheria, Reuters, 15 September, 2010,

Govt to go slow on expressways after Sonia intervention by Nidhi Sharma, The Economic Times, 13 September, 2010,

Miners may’ve to share revenues with displaced by Subhash Narayan & Rohini Singh, The Economic Times, 13 September, 2010,

Naveen making false claims: agitators by Prafulla Das, The Hindu, 15 June, 2011,

Anti-Posco group slams Ramesh for clearance, IBN, 13 June, 2011,

NAC’s seven-point test for land acquisition bill, The Hindu, 10 June, 2011,

Let barren land be explored first: NAC by Smita Gupta, The Hindu, 10 June, 2011,

Land Acquisition: Government as a Facilitator is the Best Option by Diptendra Raychaudhuri, Mainstream Weekly, Vol XLIX, No 24, June 4, 2011,

The great land grab: India's war on farmers by Vandana Shiva,, 7 June, 2011,

Sound policy shift, The Hindu, 7 June, 2011,

Maya land policy is a good model, The Deccan Chronicle, 5 June, 2011,

New land Bill allows states to script own role by Saubhadra Chatterji, The Business Standard, 3 June, 2011,

Mayawati announces new Land Acquisition Policy by Atiq Khan, The Hindu, 3 June, 2011,

Maya announces new land acquisition policy by Ashish Tripathi, The Times of India, 2 June, 2011,

Ex gratia for Jaitapur villagers soon: Chavan, The Hindu, 2 June, 2011,

Success stories by Venkitesh Ramakrishnan, Frontline, Volume 28, Issue 12, 4-17 June, 2011,

The great land grab by Venkitesh Ramakrishnan, Frontline, Volume 28, Issue 12, 4-17 June, 2011,