The land acquisition process will continue to remain at a standstill

Aug 6, 2015

- By Vivek Kaul

Vivek Kaul
It seems we are going to go back to the Land Acquisition Act 2013, which was passed during the time when the Manmohan Singh led UPA government was in power.

The 2013 Act which replaced the 1894 Land Acquisition Act had made the entire process of acquisition of land extremely difficult and time taking. The 2013 Act is the exact antithesis of the 1894 Act, which given the fact that it had been introduced during the time the British ruled India, allowed the government to acquire land at a drop of a hat and very quickly.

The 1894 Act had something called as the "urgency" clause. As Jairam Ramesh and Muhammed Ali Khan write in Legislating for Justice-The Making of the 2013 Land Acquisition Law: "Section 17 of the Land Acquisition Act, 1894 was used to forcibly disposes people of their land in a frequent and brutal fashion by suspending the requirement for due process...Section 5A...allowed for a hearing of objections to be made but put no responsibility on the Collector to take those claims into consideration."

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What this meant was that people could complaint against the acquisition of land, but it was up to the Collector of the area where the land was being acquired whether to give them a hearing or not. Also, there was no clear definition of urgency. It was left "to the authority carrying out the acquisition."

This clause allowed the collector to "take possession of the land within fifteen days of giving notice". He could take possession of a building within 48 hours of giving notice. "The Outer Ring Road Project of Hyderabad and the Expressway in Uttar Pradesh are both striking (and recent) examples of acquisitions where large tracts fell pray to the urgency clause," write Ramesh and Khan.

Given this, it was only right that the 1894 Land Acquisition Act was done away with. In fact, it should have been done away with long before it finally was. The trouble is that the 2013 Act that replaced it, as I said was at the other extreme, and made the process of land acquisition next to impossible.

In fact, Ramesh and Khan even write: "The law was drafted with the intention to discourage land acquisition. It was drafted so that land acquisition would become a route of last resort." Ramesh was one of the key movers behind the 2013 Act. Economist Rajiv Kumar estimated that it could take more than four years to acquire land, if all the processes were followed.

The Modi government tried to dilute the provisions of the 2013 Act and brought in the Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014, which made a few changes to the 2013 Act. The ordinance was signed by President Pranab Mukherjee on December 31, 2014. It made some changes to the 2013 Act.

As Anand Ranganathan wrote in a column on "Projects relating to national security or defence, including preparation for defence, defence production; rural infrastructure including electrification; affordable housing and housing for the poor people; industrial corridors; infrastructure, social infrastructure and PPP projects where government holds the land, there is no longer any need to obtain prior consent of 80% (for private projects) or 70% (for PPP projects)."

This was a step in the right direction. In the months to come a lot of noise was made around how land would be taken away from farmers and be handed over to corporates. This was totally incorrect. As Rajiv Kumar pointed out in a column in The Economic Times: "As many as 59% of rural households do not own any land. Another 28% have land holdings of less than 0.5 hectares. Therefore, 87% of the rural population is desperate to end their dependence on agriculture. Only 0.5% of India's farmers have land holdings larger than 10 hectares and in the vicinity of urban centres. They are the only ones who could be adversely affected by the proposed amendments to [Land Acquisition Act]."

But this was a point that the government did not manage to communicate to the people of this country. Narendra Modi addressed the issue in one of his mann ki baat programmes but there never really any follow up to that. Finally, the rhetoric against the ordinance unleashed by the Congress party seems to have gained credibility.

This probably explains the decision of the Modi government to go back to the 2013 Law. Further, there is an assembly election scheduled in Bihar later this year and this could have become a huge issue. Bihar is very important for the Modi government given that it elects 16 members to the Rajya Sabha, where the Bhartiya Janata Party does not have a majority. And the only way to get partymen elected to the Rajya Sabha is to first win the assembly election. Also, the Bihar election will decide if the Modi magic still persists. Given these factors, the land acquisition ordinance will be given a burial, at least for the time being.

One of the face saving gestures that has been put forward is that the states can go in for their own land acquisition laws. But what needs to be kept in mind is the fact that a state law cannot go against the central law. If there is a conflict between the two laws, the central law prevails.

Also, states cannot dilute the provisions in the central law. As Jairam Ramesh told "For instance, if the central stipulates that consent of 80% of landowners be obtained, the states cannot reduce it to 70% but they can make it 90%...They can't even do away with the consent clause."

What this means is that the states cannot come up with a law which is radically different from the 2013 Land Acquisition Act. And this means that the land acquisition process for the setting up of industry and for building public infrastructure will continue to remain at a standstill.

Vivek Kaul is the Editor of the Diary and The Vivek Kaul Letter. Vivek is a writer who has worked at senior positions with the Daily News and Analysis (DNA) and The Economic Times, in the past. He is the author of the Easy Money trilogy. The latest book in the trilogy Easy Money: The Greatest Ponzi Scheme Ever and How It Is Set to Destroy the Global Financial System was published in March 2015. The books were bestsellers on Amazon. His writing has also appeared in The Times of India, The Hindu, The Hindu Business Line, Business World, Business Today, India Today, Business Standard, Forbes India, Deccan Chronicle, The Asian Age, Mutual Fund Insight, Wealth Insight, Swarajya, Bangalore Mirror among others.

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4 Responses to "The land acquisition process will continue to remain at a standstill"

Ram Mirchandaney

Aug 6, 2015

The Govt must go ahead with the Land Acquisition Bill after the Bihar Stae Elections & not get Stymied by the Opposition ,who want to Derail Economic Progress & Debelopment Pkans .The States must thereafter be able to go Ahead & make it easy for Investors of Infrastructure etc to Acuire Land ,without having to follow Draconian Proceedures of the 2013 Law.

Like (1)


Aug 6, 2015

Vivek seems to be spouting the received wisdom and doesnt even question the need for the acquisition of land and what alternatives are available.
Did you know that the government is the largest owner of land in India? The military has over 17 lakh acres, the railways over 1 lakh acres and public sector undertakings have huge reserves of land. A lot of this land is in prime urban areas that can be disposed off to purchase the required land for industry.

For eg: the port trust has huge tracts of unused land in Wadala and Sewri, which if released could ease the congestion problems and anable afforadble housing. Ordinary folks now live 60 kms away in Virar and Kalyan when huge amounts of unused land lie with the Bombay Port Trust.

Another eg: Take the case of Godrej's land in vikhroli and mahul. Huge areas that are supposed to be producing salt. Do these actually produce so much salt that they are indispensable for industry? The reality is not so. They are merely producing some salt and the authorities do not want to take over this land and provide convenient afforable housing to millions of bmbayites.

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Aug 6, 2015

The consent of the land oustee is a priority in acquiring the land and it is immaterial whether the person holds very small extent of land. Secondly, the LA Act can be made more explicit for acquiring the land for Government owned infrastructure and not for PPP projects which are run on commercial basis. Lastly, only non-arable land needs to be acquired for which some provision can be incorporated in the LA Act. to expedite the same. A economically productive land cannot be transformed into commercial or industrial or residential application.

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Aug 6, 2015

Not correct! The 70and 80% is applicble to projcts where private parties are going to benifitd at the cost of farmers. Who has no share in the profit. Also,many failed industries acauired lands at throw away prices have sold lands at market rates the farmers have got nothing

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