Land Acquisition Act: Pros and Cons of Amendments

By Deepak Parvatiyar

January 9, 2015

On December 29, the Narendra Modi government took the ordinance route to enforce changes in the Right to Fair Compensation and Transparency in the Land Acquisition, Rehabilitation and Resettlement Act, 2013.

This was the third time in about a week that the government had promulgated ordinances to push its development agenda. The earlier two such ordinances being for increasing the cap from present 26 per cent to 49 per cent on foreign investment in the insurance sector; and for facilitating auctioning of coal mining licenses.

Promulgating Ordinances is not a preferred practice in a Parliamentary Democracy

The National Democratic Alliance (NDA) government at the Centre has moved on to issue seven ordinances within a fortnight to circumvent the Parliamentary logjam during the winter session.

It may be mentioned that such executive orders are generally meant to become laws only in case of emergencies. Besides, such orders eventually require Parliament’s approval to remain as legislations.

Quite obviously, therefore, the issue of “Ordinance Raj” has raised many eyebrows. While the Opposition has been raising its concerns, President Pranab Mukherjee too in the recent past expressed his displeasure over the government’s frequent ordinances.

Land Acquisition: A Contentious Issue

On the ordinance amending the Land Acquisition Act of 2013, the President did ask the government to explain the urgency behind the move and was reportedly told by Finance Minister Arun Jaitley that certain provisions in the 2013 Act were actually blocking crucial infrastructure projects worth $300 billion.

It goes without saying that land acquisition has remained as contentious an issue as the “land grabbers” and “land sharks”. They all revolve around a larger debate over the issue of protecting the landowners’ interest. The 2013 Act passed by the Parliament in September 2013 to replace the obsolete Land Acquisition Act of 1894, had provided for mandatory consent of at least 70 per cent for acquiring land for Public Private Partnership (PPP) projects and 80 per cent for acquiring land for private companies. It had further provided for mandatory compensation up to four times the market value in rural areas and two times the market value in urban areas.

The Land Acquisition Act , 2013: New Provisions

However, the new ruling dispensation at the Centre has amended the 2013 Act so as to, what it claims, “ease the process of acquiring land”. At the same time, the government calls the changes “pro-farmers”.

The ordinance now provides inclusion of 13 central legislations used frequently for land acquisition within the purview of the Act, also to provide higher compensation and resettlement and rehabilitation (R&R) benefits to the affected families. Following the amendments, the R&R benefits would be applicable to the following laws: The Indian Tramways Act, 1886, the Damodar Valley Corporation Act, 1948, the Resettlement of Displaced Persons (Land Acquisition) Act, 1948, Requisitioning and Acquisition of Immovable Property Act, 1952, the Ancient Monuments and Archaeological Sites and Remains Act, 1958, the Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962, the Atomic Energy Act, 1962, the Metro Railways (Construction of Works) Act, 1978,  the Railways Act, 1989, and The Electricity Act, 2003.

The new provisions though now dilute the mandatory consent clause, impact on food security, and Social Impact Assessment (SIA) of the 2013 Act by creating five new categories of projects that would not at all require prior consent from affected families as well as SIA for the purpose of acquiring land. These categories are classified as national security, defence, rural infrastructure including electrification, industrial corridors and building social infrastructure including PPP where ownership of land continues to be vested with the government. As per the ordinance, even multi-crop irrigated land can be acquired for these purposes.

Opposition Critical of the Amendments to the Land Acquisition Act

Little surprise, therefore, that the Opposition has been vocal in criticising the move claiming the ordinance route was by itself “anti-democratic” as the new provisions in the law would encourage “forcible eviction”.

However, the Finance Minister has defended such changes on grounds that while these amendments would balance the “developmental needs of India, particularly rural India”, they still provide “enhanced compensation to the land owners”. He has further pointed out that the changes now offer more scope of compensation to the landowners in projects such as rail and highways where the government is involved.
The government further contends that the ordinance was necessary because the prolonged procedure for land acquisition while on one hand denied the farmer the “benefit”, it resulted in delay in completion of projects.

It is a fact that land disputes including legality involved in acquisition of land for commercial use has been a contentious issue for many years and needed immediate intervention to fast track reforms. One may see logic in Prime Minister Narendra Modi’s argument that the government is left with no other option than the ordinance route to implement its “growth and development agenda”. His government seems in a hurry to realise its “Make in India” goal that intends to boost Indian manufacturing.

Yet, an Ordinance could not be the best way to tackle the issue.