Land acquisition and the 2013 act

The British who ruled India for about 200 years have taken up a number of projects of public importance, like linking up the country with railway network.  To facilitate execution of such projects, there was a requirement of land and, accordingly, the British formulated the Land Acquisition Act of 1894.    Till the 2013 Act was enacted, the total land acquisition needs in the country were met by acquisitions under the 1894 Act which stood the test of time for almost all more than 100 years.

The process of acquiring land for public purpose is based upon the principle of eminent domain.  The principle of eminent domain empowers the government to take private property for public use following the payment of just compensation to the owner of the property. In a sense, it has three components: first, power of the government to take private property; secondly, payment of just compensation; and, thirdly, the use should be public use. The 1894 Land Acquisition Act which was continued even after Independence did not face much of a criticism, nor there was an opposition to land acquisition as long as the land acquisition was done exclusively for public purpose.  

Wherever the acquisition was linear in nature like for roads or canals, where a farmer would lose a small portion of the land, there was not much of opposition to the land acquisition.  Wherever the land acquisition was done for major factories, whether in government sector or otherwise, it has resulted in large number of people losing their livelihoods and since the Act did not provide for proper relief and rehabilitation package, people in large numbers became the victims of land acquisition of huge projects taken up in both public as well as private sector under this 1894 Act.  

From 1980s onwards, the governments both at Centre and in States, committed to welfare of the people, have started taking up land acquisition on a large scale for different public purposes.  Simultaneously, land acquisition was also started on a large scale for private companies by giving a much wider definition for the word ‘public purpose.’  With this in the administrative decisions, political interference has become more and more, and in a large number of cases land acquisition was done for questionable public purpose detrimental to the interests of land owners. 

Once the land acquisition Act was used for questionable public purpose and the administrative discretionary power  became political discretionary power coupled with large scale land acquisition for private companies, land acquisition being done by both Central and State governments, more so by State governments, have become controversial.  The issue came to national focus with the land acquisition process at Singur for Tata Motors. With this, the requirement for bringing about fundamental changes in the 1894 Land Acquisition Act became important.  The 1894 Act has certain advantages in terms of being simple for acquisition of lands, and facilitates early completion of government projects by providing for acquisition in a short period of time without huge financial commitments.  

But it has serious drawbacks in terms of ensuring fair and just compensation to the landlords and also not providing for proper relief and rehabilitation provisions. Land acquisition done under this Act for private companies, as the French Economist, Frederic Bastiat mentioned, has become ‘legal plunder.’  Some such examples are the land acquisition for Vanpic project in Andhra Pradesh and the presently ongoing land acquisition for Machilipatnam Port Corridor (though it is not under the 1894 Act).

In the light of these criticisms, the government recognised the need for fundamental changes in the land acquisition Act and, accordingly, came out with a new Act in 2013.  Some of the salient features of the Act are wherever the projects are to be taken up under the public private partnership (PPP), for taking up land acquisition, there is need for consent of 70% of the landlords and if it is a private project there should be 80% of the consent from the landlords. While arriving at the compensation for the land acquisition in urban areas, a multiplier not exceeding two and in rural areas not exceeding four is required to arrive at the land compensation.  

Unlike the 1894 Act, this 2013 Act provides for an elaborate relief and rehabilitation process. Similarly, in the tribal areas for land acquisition, the consent of Grama Sabha is a must and also a proper place is given for the Panchayati Raj Institution in the land acquisition process.  It also provides for compensating the livelihoods of those dependent on land in other ways than ownership.  It also provides for restrictions on acquiring land where multi-crop is taken up. 

It also provides for giving land back to the owners if the land acquired is not put to use by the organisation on whose behalf the land is acquired. In this manner, this Act takes care of shortcomings of the 1894 Act and, especially, provides for fair compensation and a proper relief and rehabilitation programme and a check on administrative abuse in the tribal areas. 

The 2013 Land Acquisition Act on substantial issues has remedied the shortcomings in the 1894 Act, but has complicated the process of acquisition, virtually making it a long-drawn-out process. This process is going to be highly complicated since the Indian bureaucracy has tremendous capacity to complicate even the simplest of the Acts. If the Act itself is complicated, the capacities of the Indian bureaucracy are immense to interpret it in the most complicated manner.  

The new land acquisition law has remedied the issue of appropriate compensation to the land owners by bringing in the concept of multiplier point to the market value. Similarly, it has also substantially addressed the issue of resettlement and rehabilitation. What it fails to distinguish is that the 1894 Act is mostly misused when land acquisition is done in huge extents for projects or companies. When land acquisition is done for linear projects like canals or roads, it did not lead to major public dissatisfaction or misuse of the Act. Failure to distinguish between these different kinds of land acquisitions and coming up with one-fit-for-all legislation is a major drawback of the new Act.