Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013


The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is an Act of Indian Parliament that regulates land acquisition and lays down the procedure and rules for granting compensation, rehabilitation and resettlement to the affected persons in India. The Act has provisions regarding fair compensation to those whose land is being acquired, brings transparency to the process of acquisition of land to set up factories or buildings, infrastructural projects and assures rehabilitation of those affected. The Act replaced the Land Acquisition Act, 1894 enacted during British rule.
The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 was introduced in the Lok Sabha on 7 September 2011, which was passed by it on 29 August 2013 and by the Rajya Sabha on 4 September 2013. The bill then received the assent of the President of India on 27 September 2013. The Act came into force from 1 January 2014.
In December 2014 the Land Acquisition Ordinance 2014 was issued. An amendment bill was then introduced in Parliament. The Lok Sabha passed the amendment bill but not the Rajya Sabha. On 30 May 2015, President of India promulgated the amendment as an ordinance for third time. The Supreme Court refused to stay the ordinance following a public interest litigation. The amendment bill was referred to a joint parliamentary committee. The committee was not able to attain a consensus. The amendment bill lapsed.

Background

History

The Land Acquisition Act, 1894 was a law passed by the Imperial Legislative Council, that governed the process of land acquisition in India until 2013 and continues to do so in Pakistan and Myanmar. It allows the acquisition of land for some public purpose by a government agency from individual landowners after paying a government-determined compensation to cover losses incurred by landowners from surrendering their land to the agency.

Need

The Government of India believed there was a heightened public concern on land acquisition issues in India. Of particular concern was that despite many amendments, over the years, to India's Land Acquisition Act of 1894, there was an absence of a cohesive national law that addressed fair compensation when private land is acquired for public use, and fair rehabilitation of land owners and those directly affected from loss of livelihoods. The Government of India believed that a combined law was necessary, one that legally requires rehabilitation and resettlement necessarily and simultaneously follow government acquisition of land for public purposes.
Forty-Fourth Amendment Act of 1978 omitted Art 19 with the net result being:-
  1. The right not to be deprived of one's property save by authority of law has since been no longer a fundamental right. "No person shall be deprived of his property saved by authority of law". The amendment ensured that the right to property‟ is no more a fundamental right but rather a constitutional/legal right/as a statutory right and in the event of breach, the remedy available to an aggrieved person is through the High Court under Article 226 of the Indian Constitution and not the Supreme Court under Article 32 of the Constitution..
  2. Moreover, no one can challenge the reasonableness of the restriction imposed by any law the legislature made to deprive the person of his property.
State must pay compensation at the market value for such land, building or structure acquired, the same can be found in the earlier rulings when property right was a fundamental right. Elsewhere, Justice O Chinnappa Reddy ruled that the fundamental right to property has been abolished because of its incompatibility with the goals of "justice" social, economic and political and "equality of status and of opportunity" and with the establishment of "a socialist democratic republic, as contemplated by the Constitution. There is no reason why a new concept of property should be introduced in the place of the old so as to bring in its wake the vestiges of the doctrine of Laissez Faire and create, in the name of efficiency, a new oligarchy. Efficiency has many facets and one is yet to discover an infallible test of efficiency to suit the widely differing needs of a developing society such as ours" .
The Land Acquisition, Rehabilitation and Resettlement Bill, 2011 was introduced in Lok Sabha. Two bills on similar lines were introduced in Lok Sabha in 2007. These Bills lapsed with the dissolution of the 14th Lok Sabha.

Discussion of bill

Provisions

Definition of public purpose

Section 2 of the Act defines the following as public purpose for land acquisition within India:
When government declares public purpose and shall control the land directly, consent of the land owner shall not be required. However, when the government acquires the land for private companies, the consent of at least 80% of the project affected families shall be obtained through a prior informed process before government uses its power under the Act to acquire the remaining land for public good, and in case of a public-private project at least 70% of the affected families should consent to the acquisition process.
The Act includes an urgency clause for expedited land acquisition. The urgency clause may only be invoked for national defense, security and in the event of rehabilitation of affected people from natural disasters or emergencies.

Definition of 'land owner'

The Act defines the following as land owner:

Limits on acquisition

The Act forbids land acquisition when such acquisition would include multi-crop irrigated area. However such acquisition may be permitted on demonstrable last resort, which will be subjected to an aggregated upper limit for all the projects in a District or State as notified by the State Government. In addition to the above condition, wherever multi-crop irrigated land is acquired an equivalent area of cultivable wasteland shall be developed by the state for agricultural purposes. In other type of agricultural land, the total acquisition shall not exceed the limit for all the projects in a District or State as notified by the Appropriate Authority. These limits shall not apply to linear projects which includes projects for railways, highways, major district roads, power lines, and irrigation canals.

Compensation

Compensation under this Act provides for resettlement and rehabilitation of people affected by displacement and acquisition of land under the act.

Rehabilitation and resettlement

For land owners, the Bill provides:
  • an additional subsistence allowance of ₹38,000 for the first year - may be
  • an additional entitlement of a job to the family member, or a payment of ₹5,00,000 up front, or a monthly annuity totaling ₹24,000 per year for 20 years with adjustment for inflation – the option from these three choices shall be the legal right of the affected land owner family, not the land acquirer
  • an additional upfront compensation of ₹50,000 for transportation
  • an additional upfront resettlement allowance of ₹50,000
  • if the land owner loses a home in a rural area, then an additional entitlement of a house with no less than 50 square meters in plinth area
  • if the land is acquired for urbanization, 20% of the developed land will be reserved and offered to land owning families, in proportion to their land acquired and at a price equal to cost of acquisition plus cost of subsequent development
  • if acquired land is resold without development, 20% of the appreciated land value shall be mandatorily shared with the original owner whose land was acquired
In addition to the above compensation and entitlements under the proposed LARR 2011, scheduled caste and schedule tribe families will be entitled to several other additional benefits per Schedule II of the proposed bill. India has over 250 million people protected and classified as SC/ST, about 22% of its total population. The proposed additional benefits to these families include:
  • an additional land grant of 2.5 acres per affected family
  • an additional assistance of ₹50,000
  • free land for community and social gatherings, and special Schedule V and VI benefits
Schedule III of LARR 2011 proposes additional amenities over and beyond those outlined above. Schedule III proposes that the land acquirer shall provide 25 additional services to families affected by the land acquisition. Some examples of the 25 additional services include schools, health centres, roads, safe drinking water, child support services, places of worship, burial and cremation grounds, post offices, fair price shops, and storage facilities.
LARR Bill 2011 proposes that Schedule II through VI shall apply even when private companies willingly buy land from willing sellers, without any involvement of the government.
The Bill as drafted mandates compensation and entitlements without limit to number of claimants. Thus, for clarity and as an example, if 1000 acres of rural land is to be acquired for a project, with market price of ₹2,25,000 per acre, 100 families claim to be land owners, and 5 families per acre claim their rights as livelihood losers under the proposed LARR 2011 Bill, the total cost to acquire the 1000 acre would be
  • Land compensation = ₹90,00,00,000
  • Land owner entitlements = ₹6,30,00,000 + 100 replacement homes
  • Livelihood loser entitlements = ₹365,00,00,000 + 5000 replacement homes
The average effective cost of land, in the above example will be at least ₹41,00,000 per acre plus replacement homes and additional services per Schedule III to VI of the proposed bill. Even if the pre-acquisition average market price for land were just ₹22,500 per acre in the above example, the proposed R&R, other entitlements and Schedule III to VI would raise the effective cost of land to at least ₹33,03,000 per acre.
The LARR Bill of 2011 proposes the above benchmarks as minimum. The state governments of India, or private companies, may choose to set and implement a policy that pays more than the minimum proposed by LARR 2011.
For context purposes, the proposed land prices because of compensation and R&R LARR 2011 may be compared with land prices elsewhere in the world:
A 2010 report by the Government of India, on labour whose livelihood depends on agricultural land, claims that, per 2009 data collected across all states in India, the all-India annual average daily wage rates in agricultural occupations ranged between ₹53 and 117 per day for men working in farms, and between ₹41 and 72 per day for women working in farms. This wage rate in rural India study included the following agricultural operations common in India: ploughing, sowing, weeding, transplanting, harvesting, winnowing, threshing, picking, herdsmen, tractor driver, unskilled help, mason, etc.