On the first day of 2014, India has rid itself of one of the last remnants of colonial land regulatory laws: from now on no piece of land can be acquired under the Land Acquisition Act, 1894. The government will acquire land under the Right to Fair Compensation, Transparency in Land Acquisition Rehabilitation and Resettlement Act that was passed in Parliament last year.
Even though the new law was initiated by the Congress-led United Progressive Alliance government, the its true architects are the thousands of people who have been protesting against the forcible acquisition of land across the country. The farmers' protest in BhattaParsaul in Western Uttar Pradesh and that of tribals in Niyamgiri, Orissa were critical landmarks in the struggle towards a just land acquisition law. The new is the victory of every farmer, every tribal, every share-cropper who has been protesting against the forcible acquisition of his or her land, or demanding fair compensation and rehabilitation.
The apprehensions that the new law is against industry, are misplaced. On the contrary, industry too stands to benefit from this Act. This was explained by Congress Vice-President Shri Gandhi during his interaction with captains of industry at FICCI on December 21. Responding to a question on the Act by former FICCI president Shri RV Kanoria, Shri Gandhi said, "The government has not abdicated its responsibility. There are large infrastructure spaces where acquisition is still possible. The real issue is that there is a cost for not having a land acquisition law. And I will give you two examples. India has become extremely politically competitive and people will mobilise around these issues. Take the Tata example in West Bengal, the absence of a law is what allowed a political mobilisation that cost Tata. It is a fact that we will have to resolve this issue. We have a Maoist corridor and the central issue over there, frankly, is land, it is the acquisition of land. So you are already bearing a cost of acquisition. With increased transparency, with the RTI, you will find that this law will protect you. It will protect you from hidden costs by creating a transparency outcome," he said.
"People who have actually read the Act in detail and some people who are also in the real estate business after reading the Bill have told me that this is not as bad a Bill as it is made out to be. In fact it is quite a well thought out Bill," he added.
Union Rural Development Minister ShriJairam Ramesh also assured industry that the Act was in its benefit. You want land? Go buy the land," Shri Ramesh said at a press conference on January 1 announcing that the new law has come into force.
He also said that the provisions and regulations of the law will be completely transparent, which has been a major concern for industry.
Industry was particularly concerned about the retrospective application of the Act on acquisitions that had taken place under the previous law.
Addressing their concerns, Shri Ramesh said that the retrospective clause in Act will apply in three circumstances. It will apply where Land Acquisition proceedings under the old Act has started and the award has not been announced.
The clause will also apply where the award has been announced for the acquired land five years ago but its physical possession has not taken place.
It will also apply where the acquisition started five years ago under the old Act but a majority of the farmers have not been paid the compensation.
The key features of the new law are:
- Social Impact Assessment and Environmental Impact Assessment: For a private entity or a PPP project, state has to conduct a social impact assessment (SIA) and an environmental impact assessment (EIA), to identify the families who would be affected if land was acquired. The private entity seeking land must then get the consent of 80 per cent of the affected families before it gets the government to acquire land for it. In the case of PPPs, the entity has to secure consent of 70 per cent of affected families. The third condition for getting possession of land acquired through state intervention is payment of compensation and fulfilling of R&R requirements.
- Compensation package: Up to four times the market value in rural areas and twice the market value in urban areas; the Bill provides compensation to those dependent on the land for livelihood; where acquired land is sold to a third party for a higher price, 40 per cent of the appreciated land value (or profit) will be shared with the original owners. This would be exempt from tax and stamp duty
- Rehabilitation and Resettlement: The definition of affected family includes farm labourers, tenants, sharecroppers and workers in the area for three years prior to acquisition. The compensation would be Rs 5 lakh or a job, if available, to the affected family; subsistence allowance of Rs 3,000 a month for one year; miscellaneous allowances of up to Rs 1.25 lakh for each family
- 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.
- Dispute authority: A Land Acquisition and Rehabilitation and Resettlement Authority to be established.
- Retrospective clause: 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.
- Lease option: The Bill allows industry to take land on lease, instead of buying. But the decision rests with the state rather than the landowner.
- 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 Third Schedule even lists the infrastructural amenities that have to be provided to those that have been displaced.
- 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 of land 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.