Why was the Land Acqusition Ordinance promulgated in the first place -

The 1894 Land Act was archaic and exploitative. The new Land Acquisition Act in 2013 (LARR Act-2013) was enacted with provisions for social impact assessment, fair compensation, dispute settlement and others. LARR-2013 Act became effective from 1st January 2014. But, LARR Act-2013 brought in an extremely complex and impractical land acquisition process. Added to that the following factors made it worse for starting new projects
1.Role of NGOs – NGOs would instigate 20-25% of the affected families to stage a holdout, promising them it would fetch them even higher prices, thus misusing the 70-80% consent requirement to ensure that the project would never kickoff. Given that many NGOs are under the Government scanner for questionable activities, this opposition to projects is of concern.
2.Litigation: Most agricultural land owners don’t possess or maintain proper land records causing problems related to red tape, land valuation and litigation, which in turn raised acquisition and project costs. Combined with Environment-activism and policy paralysis of UPA regime, entrepreneurs were deterred from starting new projects. The result was that the NDA Government inherited a weak economy and a low GDP.
3. Fair compensation under 13 statutes: The LARR Act-2013 provisions did not apply to 13 statutes listed in the Fourth Schedule. For e.g. if land was acquired under Railways Act or Atomic Energy Act, then Social-impact assessment, market-rate compensation etc. were not applicable. The government, however, had the power to notify that a portion of the provisions of the law (such as those in relation to compensation and Rehabilitation & Resettlement) may apply to any of these thirteen statutes within one year from the date of commencement of this Act. Therefore, any amendment was possible before 1st January 2015, by which time, the Government needed to amend those 13 statutes to provide fair compensation and R&R to people affected by these projects. But due to frequent disruptions during the Winter session of 2014 and lack of majority in the Rajya Sabha, it was not possible to amend these 13 statutes.

As Mr.Arun Jaitley said, a larger public interest always prevails over private interest. Moreover, the land that will be acquired for development will be only a very small fraction of the entire agricultural land. It will only increase the land value in surrounding rural areas while providing social and other infrastructure.

The highlights of the Ordinance are -

-The Rehabilitation and Resettlement has been extended to 13 other laws which were exempted in the 2013 Act
-Land ordinance makes it easier to acquire land for 5 project categories (exempt from mandatory clauses for approval) -
A.Rural infrastructure, including electrification, is an exempted purpose. Roads, highways, flyover, electrification and irrigation will all add to the value of the farmer’s lands. This exemption is in the interest of rural India.
B.Affordable housing and housing for poor is an exempted purpose. Migration from rural areas to urban and sub-urban centers where employment opportunities are available, is a reality. It is the migrants from rural areas who would benefit from this exception.
C.Industrial corridors which run for a narrow distance alongwith various highways, give a fillip to the entire development of those rural areas.There could not be a greater opportunity for the rural areas than an industrial corridor running close to agricultural lands. This would generate employment opportunities and enhance the value of the land itself.
D.Infrastructure and social infrastructure projects, including those under public private partnership, where ownership of the land vests with the Governments. This is bound to benefit the entire country, particularly the people in rural areas where infrastructure and social infrastructure is inadequate.
E. Defence projects

Almost all the exempted purposes benefit rural India. They would enhance the value of land, create employment and provide rural areas with better infrastructure and social infrastructure. This is in addition to the enhanced compensation and R&R provisions being expanded to the thirteen exempted acts.

Compensation is 4 times of existing rate for rural areas and 2 times in urban areas, making compensation fair.

Another point to be noted is that the land that will be acquired for development will be a very small fraction of the entire agricultural land in India.

The Land Act 2013 and the subsequent Ordinance have gone a long way in terms of fair compensation and rehabilitation & resettlement from the Colonial era Act of 1894.

The decision of the Modi Government to revisit the Ordinance during the Budget session shows its commitment to consider the concerns of all sections while developing/ enacting legislation.

PS: Information for above sourced from the legislation and Ordinance drafts, FM’s blog, other sources available online

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