The Land Act: Exercising Caution to Allay Social Unrest

Next to killing a man, the worst you can do is to displace him.

- Thayer Scudder

A study released by a US-based think-tank, Rights and Resources Initiative and Society for Promotion of Wastelands Development, studied Supreme Court and High Court judgments from the past 10 years on land disputes and found that land conflicts affect one-fourth of India's 610 districts and most of the pockets coincide with the conflict zones, symbolizing the so called ‘red corridor’ and its fringes. The left wing extremists exploit this fact by taking up the cause of the deprived against the state.

The UPA government passed the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act2013, replacing the Land Acquisition Act, 1894, which had more or less become synonymous with land grabbing. The salient features of LARR Act 2013, were–reasonable compensation, Rehabilitation & Resettlement (R&R) entitlements, safeguards against indiscriminate acquisition, no involuntary displacement without completion of R&R etc. Consent clause was formalised, warranting consent of 80 per cent of landowners for acquiring land for private projects and of 70 per cent landowners for public-private projects. However the 2013 Act was understood to be disabling insofar as acquisition of land for development was concerned.

On 31 December 2014, the government promulgated an ordinance making significant changes in the LARR Act 2013, to include removal of ‘consent’ clause for acquiring land for five areas (industrial corridors, PPP projects, rural infrastructure, affordable housing and defence), without touching the compensation and R&R packages as guaranteed in the LARR Act 2013. As per other amendments, R&R and compensation provisions of the LARR Act, 2013 will be applicable for the 13 existing central pieces of legislation, which were kept beyond the purview of LAAR Act, 2013. The Act required that, within a year from its commencement, the government may allow the provisions of rehabilitation to apply even in acquisitions under the 13 laws that are currently exempt, subject to Parliament’s approval.[1] This made the government opt for the ordinance route for current promulgation. The present amendments, as per the Honourable Finance Minister (FM), have been incorporated keeping the landowners’ interests in mind.[2]

In an effort to make the changes evolve for the better, it is warranted that they are analysed critically, since the battle continues for finalisation of the proposed amendments by the legislature in the ensuing budget session.

It is felt that waiving off the consent clause, applicable to five categories, is unfair to the farmers who will be affected. After all, they cannot be disadvantaged merely for the reasons that their respective lands get identified for the ‘high priority’ projects. This want of a level playing field may/will lead to further dissatisfaction. In addition, several aspects included in the amendment can be construed to be attempts to entice investments at cost of landholders’ interests. Such facets are flagged in succeeding paras.

The SEZ, along with private health and educational institutions, are in the broad category of public-private social infrastructure projects now exempt from the consent clause.[3] The list of the category of projects that fall within the government's definition of "infrastructure" and "social infrastructure" are wide and subjective, which will become vague without any oversight or monitoring mechanism, on which the amendments are silent.

The government has loosened the provision that required unused acquired lands to be returned to the original owners. The LAAR Act, 2013provided that the land be returned if it remained unused for the original purpose for five years. The ordinance now has amended the original law. If the government has fixed a time period for the setting up of a project and the land remains unused for this entire period, the land need not be returned to the original owner, even if such project periods are longer than five years. This has been justified by the FM, on grounds that big projects like that of ‘smart cities’, defence manufacturing hub and SEZ, have a longer gestation period, and even take to the tune of 40 years or so.[4]Given the context by the minister, a social unrest, which in case ensues in light of neglect of consent of the affected people; the price could be very heavy to pay with obvious ripple effects, and the same cannot be offset by potential smart cities.

The Ordinance also replaces the term ’private company’ with ‘private entity’, meaning while earlier acquisitions for private purposes were limited to companies registered under the Company Act, it can now be extended to any private entity.[5]

The land ordinance does little to check the real bottlenecks posed by cronyism, lack of accountability or arbitrariness in the decision-making processes. A "reform" such as this may fail to check social conflict with little improvement in vital infrastructure. There have been numerous grey areas that require focus of the government and in order to upstage itself from ideation to implementation, following challenges deserve attention-

• Attempts in past to notify rural areas as urban, to keep them out of PESA coverage.
• The PPP model has been a backdoor method of tribal land alienation, in several instances.
• Government agencies in the past have acquired land for “public purpose” but later transferred it to private companies at throwaway prices.
• Government has in the past signed MoUs with companies and government officials acted as “dealers and negotiators” of tribal land; thus offsetting “neutrality of the State”.
• Institutional advisory mechanism to affected people towards sound investments of compensation package that they receive from the governments.
• Utilising the opportunity (emanating from LARR Act) to strengthen the legal regime governing land titles in states. Knowledge asymmetry and an active land mafia lead to the purchase of land being a risky proposition (and hence making acquisition more attractive).[6]

The opportunity to introduce amendments could have done something more towards compensation, in the sense that, value of land is calculated on its present status and not as in ‘end use’ status, post acquisition. The land, when used for agricultural purposes, has low value, so four times low value will still be low value. The value of the land soars once it becomes designated for industrial use. And therefore, the only way to give farmers a fair deal is by pricing the land after its end-use is determined. Another aspect, as noted in the Economic Times, (also debated during consultations prior to passage of LARR Act during the UPA regime) was that the government needs to consider a lease model that gives money to the landowner over time, depending on increase in the value of the land.[7] This would incorporate stake-holdership for the land-losers and thereby empower them.

It is unlikely that much activity will take place under this law while it is still to be ratified by the Parliament. The legislature, shedding its bipartisanship, would do well to voice aspirations of the landholders. Provisions need to be refined so as to make the ensuing law, more balanced by ironing out dichotomies. These laws do not only belong to the government in power but to the ‘Nation’.

Displacement is the flip side of development and as people move out of their homelands paving way for development; their future generations face an uncertain future. The march of development has different kinds of impact on different sections of people, It tends to widen the inequalities and create new ones…..A great socialist leader had once said that a great man in a hurry to change the world who knocks down a child, commits a crime.[8]

The author is Senior Fellow at CLAWS. Views expressed are personal.