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A do-gooder Land Bill for all

A do-gooder Land Bill for all
Highlights

The Land Acquisition, Rehabilitation and Resettlement Bill, 2012 (LARR) just passed by the Parliament aims to replace the Law enacted by the...

Despite some reservations in the industrial and realty sectors, the new Land Bill passed by the Parliament is generally hailed as a path-breaking measure that will remove several bottle-necks in land acquisition process while assuring unprecedented compensation packages for the land owners

Mixed reactions of India Inc

CII said it has always emphasised on the need to streamline the land acquisition process to boost manufacturing and promote job creation in the industry. ”But the industry has serious concerns on some of the provisions of the Bill as it is expected to increase the cost of land acquisition by 3-3.5 times, making industrial projects unviable and raising costs in the overall Indian economy,” CII President S Gopalakrishnan said.

Sharing similar views, Assocham Secretary General D S Rawat said: “…the industry feels that the cost of acquiring land for the industrial projects and the realty sector will go sky-high which is something not desirable and the Indian industry is battling a severe slowdown.” In addition to land acquisition, the Resettlement & Rehabilitation (R&R) cost is also likely to go up by about 3 times, the industry circles fear.

“We have always maintained that land acquisition mechanism in the country should balance the interests of affected families with industry affordability,” CII said in a statement. Another major cause of concern in the Bill is restriction on acquisition of multi-cropped land that would affect projects such as mineral extraction whose location cannot be chosen, the chamber said.

“The provision calling for return of unutilised land after five years would affect the expansion plans of industries that grow in phases. It also provides for leasing of land which, besides introducing inherent uncertainties regarding renewals particularly for short time periods, is also bound to impact mergers and acquisitions,” it said.

However, some analysts believed that the Bill will bring the much needed reforms. For instance, Venugopal Dhoot of Videocon Industries was positive about the Bill and its retrospective effect as stalled projects could see a silver lining if it is passed. The industry should be happy on lesser hurdles to projects.

Opportunities to acquirers, just compensation for owners

The Bill aims to provide fair compensation to those whose land is taken away, brings transparency to the process of acquisition of land to set up factories or buildings and assures rehabilitation of those affected

The Land Acquisition, Rehabilitation and Resettlement Bill, 2012 (LARR) just passed by the Parliament aims to replace the Law enacted by the British in 1894. It has been eagerly sought by both industry and those who live off the land.

The Bill aims to provide fair compensation to those whose land is taken away, brings transparency to the process of acquisition of land to set up factories or buildings and assures rehabilitation of those affected.

Purpose: Government may acquire land for its own use, hold and control. It may acquire with the ultimate purpose to transfer it for the use of private companies for stated public purpose. The purpose includes public-private-partnership projects, but excludes land acquired for state or national highway projects. The scope includes all land acquisition whether it is done by the Centre or any state government, except Jammu & Kashmir.

Need: Despite many amendments to the Act of 1894, there is an absence of a cohesive national law that addresses fair compensation when private land is acquired and fair rehabilitation of land owners and those directly affected from loss of livelihoods.

44th Amendment Act of 1978 omitted Art 19(1) (f) with the net result being:

1. The right not to be deprived of one’s property save by authority of law has since been no longer a fundamental right. Thus, if government issues a fiat to take away the property of a person, that person has no right to move the Supreme Court under Art 32.

2. Moreover, no one can challenge the reasonableness of the restriction imposed by any law the legislature made to deprive the person of his property.

The 25th Amendment Act, 1971 replaced the requirement of ‘compensation’ by ‘an amount’, the adequacy of which cannot be challenged in any court. Then the 44th Amendment Act, 1978 omitted the Art 31 along with Art 19(1) (f). Thus individual’s right to compensation for loss of property was also lost.

In recent times, there have been multiple incidents where farmers were protesting against the Government as it took away the land from them without paying the adequate compensation and against the wishes of many farmers. The whole debate about Right to Property needs to be re-initiated under this background. The Right to Property, which was enshrined in the original Constitution of India, as Fundamental Right should be re-instated by voiding the changes made by 44th Amendment Act of 1978 in this respect.

Restrictions: The land acquired for purposes relating to the armed forces , national security or defence, police, safety of the people; land for railways, highways, ports, power and irrigation purposes for use by government or by government controlled corporations; for planned development or improvement of village or urban sites or for residential purpose to weaker sections of society in rural or urban areas; for government administered educational, agricultural, health and research schemes or institutions; for persons residing in areas affected by natural calamities; for resettlement of affected people for any of the above government projects; for public-private-partnership projects for the production of public goods or the provision of public services; for private companies for the production of public goods or provision of public services should be used within five years.

If not, the land should be back to original land owners. When government declares public purpose and shall control the land directly, consent of the land owner shall not be required. However, when the government acquires the land on behalf of public sector companies or for private companies, the Bill proposes that the consent of at least 80% of the affected families shall be obtained through a prior informed process.

LARR includes an urgency clause for expedited land acquisition. It may only be invoked for national defense, security and in the event of rehabilitation of affected people from natural disasters or emergencies.

LARR defines the following as land owners: Family whose land or other immovable property is to be acquired; family who was assigned land by the government under any of its social development initiatives; family who hold rights under India's The Scheduled Tribes and Other Traditional Forest Dwellers Act, 2006.

LARR defines the following as livelihood losers: Any family whose livelihood was primarily dependent on the land being acquired, including agriculture labourers, tenants or sharecroppers; any family whose livelihood was primarily dependent on forests or water bodies being acquired-- including forest gatherers, hunters, fisher folk and boatmen; any family whose livelihood was dependent primarily on the land being acquired in the urban areas; any family who was residing on the land being acquired in the urban areas.

Limits on acquisition: Bill 2011 forbids land acquisition when such acquisition would: Cumulatively exceed 5% of multi-crop irrigated area or cumulatively exceed 10% of single-crop net sown area, if the net sown area in that district was less than 50% of the total area of the district.

These limits shall not apply to railways, highways, major district roads, power lines, and irrigation canals.

Compensation: The Bill proposes the total minimum compensation be at least 4 times the market value for land in rural areas; at least 2 times in urban areas.

In addition to above compensation, the Bill proposes a wide range of rehabilitation and resettlement entitlements to land owners and livelihood losers from the land acquirer.

For land owners: An additional subsistence allowance of Rs.36,000 for the first year, an additional entitlement of a job to the family member, or a payment of Rs.5,00,000 up front, or a monthly annuity totaling Rs.24,000 per year for 20 years with adjustment for inflation – the option from these three choices shall be the legal right of the affected land owner family, not the land acquirer. There are a few additional provisions also.

In addition to this, if the land owner loses a home in a rural area, then an additional entitlement of a house with no less than 50 square meters in plinth area, if the land is acquired for urbanization, 20% of the developed land will be reserved and offered to land owning families so on and so forth. And SCs and STs will get other benefits.

Bill proposes additional amenities over and beyond those outlined above. Those 25 additional services include schools, health centres, roads, safe drinking water, child support services, places of worship, burial and cremation grounds etc.

Bill proposes that rehabilitation proposals shall apply even when private companies willingly buy land from willing sellers, without any involvement of the government.

Due process is assured
The following are some of the relevant features of the AP Land Acquisition Act:
  • Act empowers acquisition of private land for public purpose or for assignment to landless poor for house sites. Objections of persons interested are heard and disposed off. The Social Welfare Department purchases lands for its purposes when Government Lands are not available.
  • Urgency Provision: In cases of urgency, the provisions u/s 17 of the Act are to be invoked in the notification to dispense with the enquiry.
  • Objections of the persons interested are to be heard and disposed off. The persons interested are entitled to file objections within 30 days from the date of publication of the notification.
  • Preliminary Valuation Proposals: The land value is to be based on the similar land sales in the village during the crucial period.
  • In case of Acquisition of lands for Social Welfare Schemes, Divisional Officers may approve the P.V of the land if the total value does not exceed Rs.20,000. In other cases, the P.V. proposals are to be approved by the Joint Collector irrespective of the total value of the lands. What is to be considered is:
Market value of the land; damages sustained, if any, by the person interested; value of structures, trees; additional market value at 12% per annum from the date of the publication of the to the date of award or the date of taking possession of the land, whichever is earlier. Solatium at 30% on the market value; and interest on the compensation at 9% for the 1st year, and 15% per annum for the subsequent period from the date of taking possession of land to the date of passing of award.
Sec. 18(1) says, any person interested who has not accepted the award may, by written application to the collector, require that the matter be referred by the collector for the determination of the court.
Reconveyance: Govt. may alone are competent to reconvey the lands acquired. The Government have a right to utilise the lands acquired for one purpose to any other public purpose other than the one stated. When once the original acquisition is valid for a public purpose, the title is vested with the Government. How it uses the excess land is no concern of the original owner.
Land may get costlier
Expressing concern over the Bill, Maharashtra Chief Minister Prithviraj Chavan said that it might push up land acquisition costs. “We need to see how this Bill impacts domestic projects in state," he observed. He said that land acquisition is a major hurdle for the state to implement projects at the ground level. -
Prithviraj Chavan, CM
Only for public utility: Nitish
Lands of farmers in Bihar should be acquired only for public utility and interests and not for the private sector, Chief Minister Nitish Kumar said. “In no case for the private sector", he added. Emphasising on compensating land losers, he said land in the state was not acquired for the private sector though there were legal provisions for it.
Owner is duly compensated
The following are some of the relevant features of the Tamilnad Act of 1997:
  • 'Industrial purpose' includes the starting of a new industry, expansion of an existing industry.
  • 'land' includes benefits arising out of land and things attached to the earth.
  • 'owner' includes any person, entitled to receive the rent of any land or building.
  • Power to acquire land:-the Government shall call upon the owner and any other person, to show cause why the land should not be acquired. Land acquired to vest in Government free from all encumbrances.
  • If any person refuses or fails to comply with an order the Collector may take possession of the land, and may use force.
Payment of Amount:
Where the amount has been determined by agreement between the Government, and the person to whom the amount has to be paid, it shall be paid in accordance with such agreement.
Where no such agreement can be reached, the Government shall refer the case to Collector for determination of the amount to be paid.
Before finally determining the amount, the Collector shall give an opportunity to every person to whom the amount has to be paid to state his case as to the amount. Any person aggrieved by the decision of the Collector requires that the matter be referred to the Court.
No force, through negotiations only
Land required for road construction and industry will be acquired through negotiation as far as possible with a human face, West Bengal Chief Minister Mamata Banerjee said while reiterating her government's stand that there will be no forced land acquisition. Banerjee said that nothing will be done by "firing at the people." She was alluding to the firing of people by the previous CPM government at Singur to facilitate TATA car factory.
Harms development
The much-awaited Land Acquisition, Rehabilitation and Resettlement Bill is intended to provide fair compensation to farmers and transparency to the process of land acquisition to set up factories or buildings.The Bill ignores the needs of poor Indians who need affordable housing, affordable hospitals, schools, and employment opportunities.The Bill does neither reduce the time of acquisition nor does consider the effect of excessive costs payable upfront loaded with expensive rehabilitation package payable over 20 years on the financial feasibility of large-scale, socially necessary infrastructure projects needed by 90%+ of Indians who are not landowners.
Another major weakness is that the Bill brings non-government transactions too under its purview. It severely curtails free market transactions between willing sellers and willing buyers.The Bill will limit private companies from developing affordable housing for millions of Indians, as it will be almost impossible to acquire 50-acre or 100-acre land at one place, and does not facilitate urbanization in an organized manner. People tend to be housed in disorganized housing developments such as slums with dire consequences. In the long run, even farmers will suffer as fringe development of urban centres will largely be in the form of unauthorized developments and they will not realize the true economic potential of their lands.
The compensation and rehabilitation payments to farmers are to be made upfront. Once the payment is made, one or more of the affected families may seek to delay the progress of the project to extract additional compensation. This will adversely affect long term employment of the affected families.The beneficiaries of the Bill, with guaranteed jobs for 20 years, will have no incentive to be productive. The Bill will guarantee neither social justice nor the efficient use of resources. The greatest challenge is to balance the needs of economic growth, equitable distribution and human rights.
(Views are purely personal)
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