LARR 2013

"The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013, the historic legislation provide just and fair compensation to farmers while ensuring that no land could be acquired forcibly. The new law stipulates 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. The bill was brought as the archaic Act of 1894 suffered from various shortcomings including silence on the issue of resettlement and rehabilitation of those displaced by acquisition of land.

Why is there a need for a new Bill?
There is unanimity of opinion across the social and political spectrum that the current Law (The Land Acquisition Act 1894) suffers from various shortcomings. Some of these include:

  • Forced Acquisitions: Under the 1894 legislation once the acquiring authority has formed the intention to acquire a particular plot of land then then it can carry out the acquisition regardless of how the person whose land is sought to be acquired is affected.
  • No Safeguards: There is no real appeal mechanism to stop the process of the acquisition. A hearing (under section 5A) is prescribed but this is not a discussion or negotiation. The views expressed are not required to be taken on board by the officer conducting the hearing.
  • Silent on Resettlement & Rehabilitation of those displaced: There are absolutely no provisions in the Bill relating to the resettlement and rehabilitation of those displaced by the acquisition.
  • Urgency Clause: This is the most criticised section of the Law. The clause never truly defines what constitutes an urgent need and leaves it to the discretion of the acquiring authority. As a result almost all acquisitions under the Act invoke the urgency clause. This results in the complete dispossession of the land without even the token satisfaction of the processes listed under the Act.
  • Low Rates of Compensation: The rates paid for the land acquired are the prevailing circle rates in the area which are notorious for being outdated and hence not even remotely indicative of the actual rates prevailing in the area.
  • Litigations: Even where acquisition has been carried out the same has been challenged in litigations. This results in the stalling of legitimate infrastructural projects.
  • Recent Observations by the Supreme Court: The Court has observed, in the wake of repeated violations that have come to light over the last few months, that the Land Acquisition Act 1894 has "become a fraud". He further observed that the law seems to have been drafted with "scant regard for the welfare of the common man".

The Act does not provide for rehabilitation of persons displaced from their land although by such compulsory acquisition, their livelihood gets affected …To say the least, the Act became outdated and needs to be replaced at the earliest by fair, reasonable and rational enactment in tune with the constitutional provisions, particularly, Article 300A of the Constitution.

What are the Highlights of The Act?

  • Compensation: Given the inaccurate nature of circle rates, the Bill proposes the payment of compensations that is up to 4 times the market value in rural areas and 2 times the market value in urban areas.
  • R&R: This is the very first law that links land acquisition and the accompanying obligations for resettlement and rehabilitation. Over five chapters and two entire Schedules have been dedicated to outlining elaborate processes (and entitlements) for resettlement and rehabilitation. The Second Schedule in particular outlines the benefits (such as land for land, housing, employment and annuities) that shall accrue in addition to the one-time cash payments.
  • Retrospective Operation: To address historical injustice the Bill applies retrospectively to cases where no land acquisition award has been made. Also in cases where the land was acquired five years ago but no compensation has been paid or no possession has taken place then the land acquisition process will be started afresh in accordance with the provisions of this act.
  • Multiple Checks and Balances: A comprehensive, participative and meaningful process (involving the participation of local Panchayati Raj Institutions) has been put in place prior to the start of any acquisition proceedings. Monitoring Committees at the National and State Level to ensure that R&R obligations are met have also been established.
  • Special Safeguards for Tribal Communities and other disadvantaged groups: No law can be acquired in Scheduled Areas without the consent of the Gram Sabhas. The Law also ensures that all rights guaranteed under such legislations as the Panchayat (Extension to Scheduled Areas) Act 1996 and the Forest Rights Act 2006 are taken care of. It has special enhanced benefits (outlined in a dedicated chapter) for those belonging to the Scheduled Castes and Scheduled Tribes.
  • Safeguards against displacement: The law provides that no one shall be dispossessed until and unless all payments are made AND alternative sites for the resettlement and rehabilitation have been prepared. The act even lists the infrastructural amenities that have to be provided to those that have been displaced.
  • Compensation for livelihood losers: In addition to those losing land, the Bill provides compensation to those who are dependent on the land being acquired for their livelihood.
  • Consent: In cases where PPP projects are involved or acquisition is taking place for private companies, the Bill requires the consent of no less than 70% and    80% respectively (in both cases) of those whose land is sought to be acquired. This ensures that no forcible acquisition can take place.
  • Caps on Acquisition of Multi-Crop and Agricultural Land: To safeguard food security and to prevent arbitrary acquisition, The Bill directs States to impose limits on the area under agricultural cultivation that can be acquired.
  • Return of Unutilised Land: In case land remains unutilised after acquisition, the new Bill empowers states to return the land either to the owner or to the State Land Bank.
  • Exemption from Income Tax and Stamp Duty: No income tax shall be levied and no stamp duty shall be charged on any amount that accrues to an individual as a result of the provisions of the new law.
  • Share in appreciated land value: Where acquired land is sold to a third party for a higher price then 40 per cent of the appreciated land value (or profit) will be shared with the original owners.

What are the Rehabilitation and Resettlement provisions for farmers, landless and livelihood losers?

  • Reduced Qualifying Criteria: To qualify for benefits under this Act the time period has been reduced to 3 years of dependence (on the acquired land) instead of 5.
  • Affected Family to include tenants: The definition of affected family includes agricultural labourers, tenants including any form of tenancy or holding of usufruct right, share-croppers or artisans who may be working in the affected area for 3 years prior to the acquisition, whose primary source of livelihood stand affected by the acquisition of land.
  • Houses for all affected families: All affected families are entitled to a house provided they have been residing in an area for 5 years or more and have been displaced. If they chose not to accept the house they are offered a one-time financial grant in lieu of the same.
  • Choice of annuity or employment: All affected families are given a choice of annuity or employment :
     i. If employment is not forthcoming they are entitled to a one time grant of 5 lakh rupees per family.
    ii. Alternatively they will provided with an annuity payment of Rupees 2000 per month per family for twenty years (this will be adjusted for inflation).
  • Subsistence Allowance: All affected families which are displaced from the land acquired shall be given a monthly subsistence allowance equivalent to rupees 3000 per month for a period of one year from the date of award.
  • Training and Skill Development: All affected families are also given training and skill development while being offered employment.
  • Miscellaneous Amounts: All affected families are given multiple monetary benefits such as transport allowance of rupees 50,000 and resettlement allowance of rupees 50,000.
  • One-Time Financial Assistance: Each affected family of an artisan, small trader or self-employed person shall get one-time financial assistance of such amount as the appropriate Government may, by notification, specify subject to a minimum of twenty-five thousand rupees.
  • R&R to be completed in all aspects for irrigation projects: In case of acquisition of land for irrigation or hydel project the rehabilitation and resettlement shall be completed six months prior to submergence of the lands proposed to be so acquired.
  • Possession upon fulfilment of conditions under Act: The Collector shall take possession of land only ensuring that full payment of compensation as well as rehabilitation and resettlement entitlements are paid or tendered to the entitled persons within a period of three months for the compensation and a period of six months for the monetary part of rehabilitation and resettlement entitlements commencing from the date of the award. However, families will not be displaced from this land till their alternative R&R sites are ready for occupation.
  • Time Limit for provision of R&R entitlements: The components of the Rehabilitation and Resettlement Package in the Second and Third Schedules that relate to infrastructural entitlements shall be provided within a period of eighteen months from the date of the award.

How are interests and concerns of farmers protected?

  • Retrospective Effect. Where awards are made but no compensation has been paid or possession has not been taken then compensation shall be paid at the rate prescribed under the new Act. Where the Award has not been made the entire process shall be considered to have lapsed. Also where acquisition has taken place five years prior to the commencement of the new law but no compensation/ possession has taken place then the proceedings shall be deemed to have lapsed.
  • Consent: shall be prior-consent required from 70 per cent of land losers and those working on government assigned lands only in the case of Public-Private Partnership projects and 80 per cent in the case of private companies. This consent also includes consent to the amount of compensation that shall be paid.
  • Return of Unutilised land: Land not used can now be returned to the original owners if the State so decides.
  • Share in Sale of Acquired Land Increased: The share that has to be distributed amongst farmers in the increased land value (when the acquired land is sold off to another party) has been set at 40%.
  • Income Tax Exemption: All amounts accruing under this act have been exempted from Income tax and from Stamp duty.
  • Strict Restrictions on Multi-Crop Acquisition: The acquisition of agricultural land and multi-crop land has to be carried out as a last resort. There will be definite restrictions on the extent of acquisition of such land in every state to be determined by the States concerned.
  • Safeguards to ensure fair price: Given the way in which market value is to be calculated and the imposition of a solatium of 100 per cent over and above the amount, the farmers are guaranteed a fair price for their land.
  • Acquisition only if necessary: The Collector has to make sure that no other unutilised lands are available before he moves to acquire farm land.
  • Damage to crops to be included in price: The final award has to include damage to any standing crops which might have been harmed due to the process of acquisition (including the preliminary inspection).
  • Share in Developed Land: In case their land is acquired for urbanisation purposes twenty per cent of the developed land will be reserved and offered to these farmers in proportion to the area of their land acquired and at a price equal to the cost of acquisition and the cost of development.
  • Fishing Rights: In the case of irrigation or hydel projects, affected families may be allowed fishing rights in the reservoirs, in such manner as may be prescribed by the appropriate Government.
  • Addtional R&R Benefits: Farmers are also entitled to the various rehabilitation and resettlement benefits which are enumerated in response to question 2.
  • Time Bound Social Impact Assessment: The Bill mandates a Social Impact Assessment of every project which must be completed within a period of six months.
Please call me back to discuss more