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The New Land Acquisition Draft: A Critique
Niranjan Sahoo
15 September 2011

Land remains at the centre of many of India's current predicaments. From Nandigram and Singur to recent protests in Bhatta-Parsual of Uttar Pradesh and Jagatsinghpur of Orissa (POSCO project), land acquisition issues continue reverberating the national attentions. With industrialisation and urbanisation accelerating in a gigantic pace and hunger for land increasing manifold, rarely a day is passed in India without some protests or violent agitations around land acquisition.

In responding to rising tides of resistance and protests against the present practices of land acquisition, governments both at the Centre and at the provincial levels are seen announcing all kinds of sweetener including an attractive compensation package, variety of rehabilitation schemes including jobs, annuity, equity participation, developed plots and so on. Many of Indian states that never bothered to amend their land acquisition laws to enhance benefits for land owners, are competing today with one another by offering more attractive packages and host of other benefits to make land acquisition a hassle free affair. Starting with Haryana, several states such as Orissa, Karnataka, and in recent times the current Uttar Pradesh (UP) government under Ms. Mayawati have come out with very competitive compensation and R&R policy to woo the farmers and other landholders. States like Haryana and UP not only promise a very attractive compensation package (UP now promises to pay farmers at market rate, floor price determined), they have gone to the extent of paying annuity for 20 years (i.e., UP will give Rs. 23,000 per acres for 33 years compared to Haryana's Rs. 20,000 for 33 years), job to one of the members of the family by the private party. In short, it is raining goodies for once sidelined farmers and other land owners.

Joining the game in handing out goodies to the farmers and other land owners is the Centre which enjoys an upper hand over its provincial rivals (Uttar Pradesh in particular). Belatedly though, the Ministry of Rural Development (MoRD) introduced a comprehensive legislation named "The National Land Acquisition and Rehabilitation & Resettlement (LARR) Bill 2011" on September 7, 2011 in the Lok Sabha. If passed in its current form, the bill would usher a new era in the method and manner of land acquisition by addressing many of the controversial aspects of antiquated 1894 Act. By combining both compensations and rehabilitation and resettlement into a single bill, the government finally has made genuine recognition of often neglected components of land acquisition which are key reasons for protests and opposition by farmers and other land owners. The overarching legislation would also give a head start to several contentious issues such as method of acquiring private land, compensation including R&R and means and methods of settling disputes and grievances. Besides, if passed in its present shape, the bill would significantly lessen the chances of involuntary acquisition as prevails currently. It has restricted the most misused 'urgency' clause to national security and natural calamities. But more importantly, for the first time the land bill has unequivocally recognized the role of Gram Sabha in land acquisition process. This has been done to comply with other laws particularly the Panchayat (Extension to the Scheduled Areas), Act, 1996 and the Forest (Dwellers) Rights Act, 2006. Last but not the least, the bill for the first time recognizes claims for compensation of those (agricultural and non-agricultural labourers, rural artisan or self-employed persons, landless labourers, etc) affected by land acquisition.

Although the bill in every sense is a massive improvement over the colonial 1894 legislation, it still suffers from many shortcomings and policy ambivalence that need close attention from the draftsmen. First, despite all its claims, the bill fails to address the most vexed issue of "public purpose". Defining public purpose as "the provision of land for infrastructure, industrialization and urbanization projects of appropriate government, where benefits largely accrue to the general public", can be interpreted vaguely. In effect, the bill does not clarify how private and public purpose in a private sector led project will be evaluated. Therefore, the bill misses the chances to take cognizance of a major pitfall of current land laws which has not defined public purpose narrowly enough thereby contributing to all kinds of mess in land acquisition. In leaving public purpose too vague and porous, it would ensure that land acquisition will remain hostage to politics and all kinds of contestations.

Second, while a blanket prohibition on acquiring irrigated multi-crop land might be echoing the voices with regard to food security and other genuine agrarian concerns including the loss of livelihood, this would have serious negative consequences for the country. Such a blanket ban would create havoc for country's urbanization plan as it would affect spatial urban spread. But more importantly, such a ban on irrigated multi-crop land would put those interested farmers in disadvantaged position as it would block their chances to exit out of agriculture for other vocations. Although the bill in the last minute made some compromise in term of allowing 5% of such land on condition that state develops same quantity of waste land for agriculture use, this would not address the challenges that would arise out of the ban. In other words, the bill has been drafted in response to 'agrarian populism' than the practical considerations. While all care should be taken to stop indiscriminate acquisition of fertile agriculture land for pure commercial ventures, the bill needs to take cognizance of India's fast changing demography and its economy and society. Fact of the matter is India's growing young population is desperately seeking their futures in non-agricultural occupations. According to recent McKinsey Report, with rapid changing demography and 'youth bulge" that the country would have by 2030, some 40% of Indians will be living in cities. And needless to say vast majority of the employment has to be generated outside agricultural sector. There would be heavy pressure on land in general and given India's very low land-man ratio (which would be 0.2 hectares by 2020), the country has little choice but to use even multi-cropped land wherever feasible. Therefore, rather than having blanket ban, it would be prudent to lay down stringent conditions under which such land can be acquired along with effective institutional safeguards and mechanisms to ensure its effective implementation. Fact of the matter is much of the contentions over land acquisitions have been due to an absence of governance which is reliable and sensitive to the interests of land owners.

Third, there are procedural and governance issues that the bill has not adequately addressed. For instance, despite provisions for National Land Acquisition Dispute Settlement Authority and State Land Acquisition Rehabilitation and Resettlement Dispute Settlement Authority this would not be adequate to address post-acquisition pangs and delays that result from subsequent court battles. What the new law needs to appropriately consider or missing is an empowered and independent regulator both at central and state levels to oversee and monitor or regulate the land acquisition process with the given framework. This can great check judicial delays and political interferences.

Finally, there are number of other issues that the proposed draft bill needs to address. For instance, under Section 21 (1), the proposed Bill continues its faith on the judgment of District Collector to determine the 'market value of land'. According to past experiences, this is one institution which lies at the centre of many land controversies. Stories are abound about District Collector organizing fake Gram Sabha meetings or coercing ill-informed and disempowered villagers into submission with regard to land acquisitions. Similarly, the provision of a Committee under the chairmanship of Chief Secretary with regard to compensation and rehabilitation issues again puts the onus on same old and unreliable bureaucracy.

To conclude, notwithstanding certain areas of confusions and its share of shortcomings some of them being very serious in nature, the bill is a long overdue and must move quickly with doses of amendments to see the daylight. While everyone hopes that the bill would lead to a stronger and effective legislation, given its sensitive nature and competing interests that the land issues has been attracting in the recent times, some surprise outcome cannot be entirely unexpected in the end. For example, while the original bill (cleared in 29 July 2011) had promised that the new land law will have "primacy" over 16 other Central laws such as the Land Acquisition (Mines)Act, 1885, the Special economic Zones Act, 2005, the Coal Bearing Areas Acquisition and Development Act, 1957 among others have been deleted. This compromise as publicly confessed by Mr. Jairam Ramesh was made to obtain smooth Cabinet clearance. Similarly, there have been some vital compromises made on "multi-cropped agricultural land", compensation amount (i.e., 6 times for rural area was reduced to 4 times) and 5 years non-use was extended to 10 years. In other words, the latest draft is a diluted version and is based on pragmatic political considerations than public interest, fairness or efficiency that any model legislation ideally takes into account.

(Niranjan Sahoo is a Senior Fellow at Observer Research Foundation, New Delhi. He can be contacted at niranjansahoo@orfonline.org)