Towards a Pragmatic
At that time it was One of the most important
Land Acquisition
Policy for Industrial
Use
Section A, Group 6
Land Acquisition Act was first
enacted in India by British
Government in 1824. It used to be
called as Bengal Resolution I of
1824 and it enabled the
government to obtain land and
other immovable items at fair
valuation. British extended the
regulation through legislation, The
Act 1 of 1850. This law helped
British government to lay railway
tracks in India. After Independence,
India adopted Land Acquisition Act
1894. This article takes you
through the history of land
acquisition act in India. It will
briefly explain what the
impediments to industry before
LARRA, 2013 were. The major
elements of LAARA 2013, its pros
and cons and the amendments by
Modi government introduced in the
new act. At last pragmatic
solutions have been discussed.
Names:
Liji James (FPM 10/04/O)
Aditi Sharma (FPM 10/03/M)
Abhishek (FPM 10/02/Q)
Karan Kakkar (PGP/20/030)
Raj Nath (PGP/20/043)
Amit Prasad (PGP/20/008)
The history of Land
Acquisition Policy delves
deeper into 1824 when British
government implemented it in
India.
known as Bengal Resolution I
of 1824, and was applied only
to Bengal province. The law
enabled the government to
obtain, at a fair valuation, land
or other immovable property
required for roads, canals or
other public purposes.
This law came into effect on 1 st
March 1894 in all the states of
India except Jammu and
Kashmir. Basically the Act is
divided into 8 parts including
short title, commencement,
definitions and extent,
acquisitions, reference to court
Procedure, appointment of
compensation, Payment,
Temporary occupation of
Land, Acquisitions of Land for
Private Companies,
Miscellaneous
Part 7 was specially defined for
Acquisitions of Land for
Private Companies. No land
can be acquired for a company
unless and until there is a prior
consent of the appropriate
government and an agreement
in writing between the
company and the government.
Such acquisition can only be
for the following objectives;
the land should be used for
construction of dwelling
houses for the workmen of the
company, the work or
construction should serve the
public purpose
However above conditions
were not required if
government was obliged to
provide land to any company
under any agreement.
Impediments to Industry
before Enactment of LAAR
factor necessary for Industrial
and Infrastructure growth of
India is smooth acquisition of
land.
The major impediments to that
were:
Lack of clear definition of
"public purpose"- The
process of acquisition for
private companies will not
begin unless it is proved that it
is used for public purpose.
Due to a lack of clear
definition of "public
purpose", industrial projects
encountered problems time and
again. Many cases were filed
for it and various judgements
of Supreme Court expanded
the definition of public
purpose. This has given
discretionary power to state
decided the contours of public
purposes.
No proper mechanism to
choose land - Due to improper
choice of land promising
projects used to run into
difficulties. Fertile land being
chosen without any proper
choosing mechanism led to
friction between public and
government.
Problems due to long
procedures and
environmental clearance -
There were many major
projects in sectors like steel and
power, equivalent to Rs
244,815.5 crore, were stuck
due to procedures relating to
land acquisition and forest and
environmental clearances. The
major companies involved
were Arcelor POSCO, Tata
Steel and Jindal.
To sum up Indian policy
towards land acquisition was
quite inward looking and
against the private companies.
The Salient features of
LARRA Act 2013 and
Comparison with the Act
Prior to 2013
The 2013 Act LARRA has
brought major changes and has
almost re-visited the thought
process behind this law. A step
in the direction of transparency
and fair play was that the Act
provides for a pre-acquisition
assessment in the form of
Social Impact Assessment
Study, Social Impact
Management and Environment
Impact Management. These
studies take care of social,
environmental, financial,
cultural impact of the
acquisition with the help of
local self-government like
Gram Panchayats and LMCs.
Earlier this duty was entrusted
to Collector of the area who
also happened to be the tribunal
for deciding disputes regarding
the acquisition. In the earlier
law, the quantum of the
compensation of acquired land
was not fixed, the definition of
Public Purpose was very
clear but it was dependent upon
the discretion of the collector,
who used to fix the same with
the help of his sub-ordinates.
LARRA 2013 keeps the
quantum of compensation to 4
times of the circle rate in rural
area and two times in the urban
area. The old Act did not
recognise the rights of bona-
fide purchaser of the land,
contract farmers, tenants and
labours whose survival
depends upon their labour even
though they are not the owners
of property, LARRA 2013
provides for the Consent of
80% of the affected families in
rural and 70% in urban area.
Important restriction has been
imposed against acquisition of
Multi-Crop lands. The earlier
law did not provide for
rehabilitation and resettlement
of displaced persons, 2013
provides provision for one-
time payment of Rs. 5,00,000
or Rs.2000/- pm to the affected
families along with
appointment to one member for
26 years.
Industry Purview
The provisions of LARRA
2013 have not been received in
good taste by the industry
experts. The main opposition is
on the ground that the Act is
hugely oriented in favour of
farmers. The government has
introduced many litigants in
the form of bona-fide
purchaser of the land, contract
farmers, tenants and labours
etc. in the guise of stake-
holders. The industrialists also
claim that four or two times
compensation + solatium +
40% share in future
appreciation of land price (for
which there is no justification
because appreciation of price
of land takes place only when
huge cost is incurred by the
industry to make it usable) +
compulsory employment of a
family member is a burden for
the industry leaving the project
cost un-manageable. The
experts feel that the industry
would also become a tool of
arbitrariness at the hands of
government executives and
officers who may wield their
stick any day on any of the
above-mentioned issues.
Industry fears that employment
clause may lead to giving
employment to unskilled
labour and thus additional cost
on training. The industrialists
also claim that there is no
separate forum/Tribunal for
making decision on the
disputed issues and litigation.
However, the industrial experts
feel that exemption of 13
projects like National
Highways, Railways, Airports
etc. from the purview of
LARRA 2013 shall speed up
Infra-structural developments
and they want similar
concessions for PPP modules
and private projects.
Pros and Cons of LARRA
Arguments in favour of
LARRA
Increased
compensation: Compensations
that is up to 4 times the market
value in rural areas and 2 times
the market value in urban areas.
Consent: Consent of 70% and
80% of the affected families is
required for PPP and private
project respectively.
Return of unutilized land: Land
should be returned to original
owner or the State Land Bank
if not used in five years for the
purpose for which it is
acquired.
Exemption from income tax
and stamp duty: No income tax
and stamp duty will be charged
on any amount that accrues to
an individual as a result of the
provisions of the new law.
Compensation for livelihood
losers: The Bill also provides
compensation to those who are
dependent on the land being
acquired for their livelihood.
Amenities like schools, health
centres and civic infrastructure
in places where project-
affected people are resettled.
Arguments against LARRA
High cost of acquisition: Cost
of acquisition will increase 3
times thereby making the
projects unviable.
Delayed execution of projects:
Because of the mandatory
requirement of consent for
acquisition of land the project
will be delayed.
Loophole in the system: This
act applies only for a land
acquisition of more than 100
acres in rural areas or 50 acres
in urban areas so it can be
avoided by taking land in
multiple parcels instead of one-
time acquisition.
No job guarantee: No
guarantee of jobs for the
members of the family who are
giving away the land neither
any guaranteed return of
unused land.
Mandatory "consent" clause
and Social Impact
Assessment (SIA) will not be
applicable if the land is
acquired for national security,
defence, rural infrastructure
including electrification,
industrial corridors and
housing for the poor including
PPP where ownership of land
continues to be vested with the
government.
Whether the land is fertile or
not will also not be taken into
consideration while acquiring
it for these five specific sectors.
Social Infrastructure sector was
removed, it would have
enabled the acquisition of land
for private hospitals and
educational institutions.
Later on a new norm
introduced that one person in
every affected family be given
employment.
In August 2015, Centre had
urged states to go ahead with
their own land acquisition laws
for boosting infrastructure
development.
This has given rise to a set of
land acquisition models which
are innovative and at the same
time ensure easier acquisition
of land.
government (via auction or
returning it to owners)
By implementing auction
(particularly in rural and semi-
urban areas where price are
low) based system on
determining the monetary
value of the land (It will take
care of the amount demanded
by the farmers)
By giving displaced poor
appropriate training or Skill
Developments for
sustainability in future
The land to be acquired from
the land owners should be
acquired either on a long lease
or in the form of equity of the
proposed business
By giving state government
proper incentive to relax Land
Acquisition Criteria (if it is not
agricultural intensive land
area)
Whatever be the modality of
acquisition (lease, equity or
outright

Inadequate compensation: the Proposed Solutions

market price is low particularly
in rural areas or semi-urban
areas, and so the compensation
amount may be too little for a
landowner/farmer who is
losing his/her livelihood.
Amendments proposed by
BJP-led government
There are many lapses which
are required to be corrected or
to be looked after following
could be changes incorporated
for better performance
By implementing policy and
measures for the usage of
unused lands left with the
References:

Ghatak, M., & Ghosh, P. (2011). The Land Acquisition Bill: A Critique and a Proposal. Economic & Political Weekly ,
65-72.
1) Jairam, R. (2016). Land Acquisition Law: Winking at the States . Delhi: The Hindu.
2) Rajiv, K. (2011). Land Bill will act as a drag on Industry. THe Hindu Business Line, 1-12.
3) Santosh, V. (2015). Subverting the Land Acquisition Act, 2013. Economic & Political Weekly, 18-21.
4) Land Acquision in India Retrieved from
https://en.wikipedia.org/wiki/Land_acquisition_in_India
5) Differences between land acquisition act of 1894 and 2013-act Retrieved from
http://www.careerride.com/view/differences-between-land-acquisition-act-of-1894-and-2013-act-20312.aspx
6) nationalland bill six facts you need to Retrieved from http://www.thehindu.com/newsknow/article6978832.ece

7) The evolution of the Land Acquisition Act from 1824 to 2015 Retrieved from
http://www.livemint.com/Politics/T2tN2OWzJIy9SuFgsGsmHN/
8) What is the difference between the 2015 and 2013 Land Acquisition bill Retrieved from
https://www.quora.com/