Land Acquisition Bill: Debate Between Development and Fair Compensation

With the new government making clear its intention that it is keen to bring some crucial amendments to the Land Acquisition Act of 2013, Indian industry including the realty sector has heaved a collective sigh of relief. However, associations of farmers and social activists are concerned that diluting the 2013 law might cause a return to the volatile situation that prompted the UPA government to promulgate a tough land acquisition policy.

A Quick Recap “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013,” was campaigned post the West Bengal TATA Nano case and the agitation of the farmers in the Bhatta Parsaul village, in Noida. In both the scenarios the land was acquired from farmers based on the outdated acquisition bill, and the compensation offered was not adequate.

In this context, the 2013 Act made it immensely tough for the industry to acquire land. The Act restricted the government's power to obtain land for use in private projects. It also made acquisition transparent, while adding some strict norms regarding compensation and rehabilitation of the land sellers. It aimed at giving the land sellers their due, but left the industry wallahs, builders and developers in a tough situation.

The development trade off Developers felt the Act lengthened the land acquiring process, put several obstacles in the way of acquiring land, and in some cases made it next to impossible to obtain land. Vital among the 'contentious' clauses was the 'consent' clause, that made it mandatory for the private companies acquiring land to obtain the consent of 70% of the land owners, whose land is to be acquired.

The social impact assessment (SIA) clause, which obligated a social impact assessment of the affected families to be conducted within six months for public private partnership (PPP) project, was another section that negatively affected the industry. Being a time taking process, it inflates the cost of small projects, and developers felt that it should be conducted for very large projects only. The industry also wanted the government to revisit the definition of 'affected families' as it also includes people who lose their livelihoods because of the acquisition, making the bracket too huge to be sustainable.

Another worrying factor for the developers and other sections of the industry was the compensation clause which mandated rehabilitation within three months, and monetary compensation within six months. This was practically not possible to achieve in a number of cases.

Though the bill aimed at creating transparency and ensuring appropriate compensation to the farmers, it was criticized for being heavily anti-industry. The Confederation of Real Estate Developers' Associations of India (CREDAI), had raised concerns stating that the bill was not well thought out as it stalls the process of development. Planned development of communities in cities is not possible, and it kills the entire purpose of development.

Need for development In an agriculture-dominated country like India, development is a major trade-off between the interests of two sides – farmers and industry. Land acquisition is an inevitable necessity if industries have to be set up, urban areas have to be expanded, new employment opportunities created and housing facilities increased. If the Narendra Modi led new government aims at speeding up economic growth, land acquisition policies will have to be eased.

Photo Credit: Annadatha/ Flickr

Land acquisition is also a legitimate need for building public infrastructure projects like roads, schools, universities and hospitals. All such initiatives need a conducive land acquisition policy.

Faster clearances and flexible SIA is something that the present government should improve on as this would largely reduce the time of approvals and facilitate the implementation of the affordable homes schemes. Developers also hope that government will reduce the consent percentage for PPP projects.

While the indications have been positive, it remains to be seen exactly what kind of amendments the new government will bring in the Land Acquisition Act of 2013.

Is the government right in contemplating easing of land acquisition restrictions? Let us know your views.