Bill Analysis : Land Acquisition, Rehabilitation and Resettlement Bill 2011

IMF, in a recent survey conducted in Jan 2011, identified that India needs to spend $500 billion in the five years ending 2011/12 and $1 trillion in the following half a decade, on improving the infrastructural requirements, if it has to sustain the current growth rates and move into double digit growth rates. “India Infrastructure Report 2009”, brought out by IDFC identified availability of land and process of land acquisition as the most important structural constraints to the development of infrastructure. Land acquisition for infrastructure faces several obstacles today, like availability of financing, multiple clearances, capacity constraints, and governance deficit issues. At the same time another worrying statistic is the reduction in the total area under food-grain production. In the year 2007 -08, it went down by 0.7% compared to the previous year. This poses multiple questions in front of us. 

1.       Do we have adequate land for development?

2.       Who pays for development and how do we ensure fairness in land acquisition?

3.       How do we ensure that the twin objectives of development and food security?

In India the right of a citizen for owning property is recognized as a legal right as per article 300A of the Constitution which states that “No person shall be deprived of his property save by authority of law.” However Government is empowered to acquire private person’s land for infrastructure needs or for other public needs, with or without his or her consent, after paying compensation through the authority of  various laws, the most prominent one being ‘The Land Acquisition Act’ which was promulgated on the first day of March, 1894. These laws, which were drafted in 1894 during the heights of British Raj and amended multiple times in the years 1919, 1921, 1923, 1962, 1967 and 1984, have been criticized for being draconian and land acquisition in India has always been fraught with controversies.

While the purpose of such “eminent domain” powers were given to government for creating public facilities which delivers public goods, in India these powers have been used for years for acquiring land for private investments. Since the land holding in India was highly distributed, it suited the private parties, to take the help of government’s eminent domain powers as it reduced the transaction costs to a great extent. The primary complaints and disputes in land acquisitions in India were around the poor compensations paid to land owners, forceful evictions of farmers from their lands using the emergency clauses, which allowed governments to acquire land without giving landowners the right to a hearing, lack of transparency and acquiring fertile multi crop land and handing the same over to builders/industrialists. In fact the politician – bureaucrat – builder nexus in land acquisition had forced Supreme Court to come out strongly, terming that “the state was the biggest land grabber, depriving farmers of their livelihood for generations. And by taking advantage of the land acquisition law, the state was helping the builders.”

The Land Acquisition (Amendment) Bill, 2007 attempted to correct some of these anomalies and it was passed by the Lok Sabha on 25th February 2009 (the last day of the session) but the bill lapsed with the dissolution of the 14th Lok Sabha. The current draft attempts to go beyond the contours of land acquisition by coming out with a comprehensive legislation by repealing Land Acquisition Act 1894 and the two Bills : Land Acquisition (Amendment) Bill 2011 (LAA 2011) and Resettlement and Rehabilitation Bill, 2009 (R&R 2009) consolidated under the title Land Acquisition, Rehabilitation & Resettlement Bill of 2011. Combining the provisions of rehabilitation and resettlement along with land acquisition will remove some of the internal contradictions, confusions in implementation & delays, and therefore avoidable distress and suffering for the people. In the words of  Jairam Ramesh, Minister of Rural Development “This draft Bill seeks to balance the need for facilitating land acquisition for various public purposes including infrastructure development, industrialization and urbanization, while at the same time meaningfully addressing the concerns of farmers and those whose livelihoods are dependent on the land being acquired.”

The draft bill has been introduced in Parliament on 7th September 2011 and has been referred to the Standing Committee for scrutiny.  Chief Ministers will take up LA&RR 2011 Bill for discussion in the National Development Council meeting slated for 15th October 2011 and their feedback will be incorporated in the bill. Once passed and  implemented, the bill will replace the Land Acquisition Act of 1894 and supersede all legislations on land acquisition, will not supersede 16 of the specialized items of legislation on land acquisition, including those for special economic zones and for  linear projects like Highways, canals  and the Railways. States will also continue to have their own land acquisition laws, but the new Bill will provide a minimum compensation and R&R package.

A high level analysis of the “LARR 2011” bill is given in the table below.

Parameters	Land Acquisition, Rehabilitation & Resettlement bill 2011 – Main provisions	Kudos & Criticisms of the proposed bill
Applicability of Law	LA & RR provisions will apply when Govt acquires land for its own use and for the use of private companies for stated public purpose.  ·       Public purpose once stated, cannot be changed ·       80 % of the affected families need to give their consent to the proposed acquisition. Only RR provisions will apply when Private companies buy land, equal to or more than 100 acres, on their own or when they approach Government for partial acquisition for public purpose.	Kudos: ·       Cannot acquire any multi-crop irrigated land for public purposes under normal conditions and under exception conditions only 5% of the total multi cropped land in a district can be acquired and same amount of land will be developed for agriculture. ·       Govt cannot acquire land for private companies for private purposes. ·       RR provisions are extended even to private negotiations above a size. Criticisms :  ·       Who will determine whether some land is multi-crop or not? ·       Government is free from the consent clause can  use its "Eminent Domain" powers when it acquires land for its own use which is a major debate in case of land acquisition for projects for which there is a an opposition from the community - like Jatiapur Project ·       There exist the “asymmetry of power between those wanting to acquire the land and those whose lands are being acquired”, but the bill does not provide any mechanism to mitigate this in cases of private negotiations. ·       Even the R&R provisions will apply only when the land acquired through private negotiation is above 100 acres in rural area and above 50 acres in urban area.
Definition of Public Purpose	Public Purpose is defined as ·       Strategic Purposes — if land is needed for armed forces or for national security. ·       Infrastructure and Industry — where benefits largely reach the general public. ·       Residential purpose for the poor, and for educational and health schemes in both urban and rural areas. ·       Need arising from natural calamities.	Kudos: ·       An attempt is made to define “public purpose” so as to avoid misrepresentations and subsequent frauds. Criticisms : ·       The cost of land in Industrialization is ~ 3% -5% of the project cost and using eminent domain clauses will cause the agricultural class subsidizing infrastructure development and industrialization. ·       The bill leaves it to the bureaucracy to decide public purpose in cases like industry and infrastructure. For ex: Tourism falls under the definition of Industry and in the absence of clear definition even land acquired for a tourist resort can be termed as public purpose. ·       The definition of Residential purpose for the poor and educational and health schemes are left vague and can be exploited by vested interests.
Definition of Affected parties	Two types of affected parties : ·       Land Owners - those families who owned the land which is have been acquired, or who were assigned land by the Governments under various schemes or those families who hold rights under the Forest Rights Act, 2006. ·       Livelihood Losers  - may be agricultural laborers, tenants, share-croppers or artisans or may be working in affected area for 3 years prior to the acquisition of the land, , whose primary source of livelihood for 3 years prior to acquisition was dependent on forest or water bodies	Kudos: ·       Bill attempts to go beyond the age old definition of affected parties. Criticisms : ·       The definition of Landless family is vague and is broad - there is no effective mechanism to ascertain 3 years clause and will only result in massive, large scale and corruption and issue of false certificates.
Urgency Clause	Can be exercised only in “the rarest of rare cases” and can be invoked for ·       National defense and security purposes ·       R&R needs in the event of emergencies or natural calamities.	Kudos: ·       Bill attempts to go beyond the age old definition of affected parties. Many state governments had abused the urgency clause that led to flagrant violations of the power of eminent domain. The LARR 2011 clearly defines the scope of urgency clauses.
Proposal flow : Pre-notification	Pre-notification: ·       Starts off with a Social Impact assessment at panchayat / urban body level. SIA access public purpose, displacement impact, socio -economic impact on neighboring land, if acquisition is absolutely necessary and is the bare minimum needed. ·       Public hearing and further assessment of SIA by expert panel comprising of 2 non official social scientists, 2 experts on rehabilitation and 1 expert on project for which land is to be acquired. ·       Examination of proposal by committee constituted by Govt which has Chief sec, Sec of depts of finance, revenue, rural development, social justice, tribal welfare and panchayat raj and 3 nin off members from relevant fields. (If land acquired is less than 100 acre, committee can delegate its functions) ·       If notification doesn’t happen from 12 months of SIA appraisal by expert committee or if declaration doesn’t happen 12 months from notification, the report is lapsed.    Notification      ·       Notification with public purpose, SIA report and land details to be published in gazette, two leading dailies one of which is in regional language , gov website, Collectorate, Teshil, Gram panchayat and Urban body ·       After notice, before declaration collector can update and complete land records ·       Objection to be raised to collector within 60 days on public purpose, area under acquisition and SIA report ·       Collector to issue notification     Rehabilitation & Resettlement Plan ·       Notification is issued administrator for rehabilitation and resettlement to conduct survey and census and prepare draft rehabilitation plan. ·       Public discussions on the report and RR Plan and is forwarded to collector with objections ·       Collector to submit RR plan to Commissioner RR. Award ·       Collector to take possession of the land and make award within 2 years  from date of publication of report  ·       Any interested person who has not accepted the award can  give his objection in writing on the measurement of land, amount of compensation, person to whom it is payable and rights under RR ·       Collector has to make reference of this within 15 days of receiving to the appropriate authority and if collector fails to make this reference, applicant can request the appropriate authority to direct the collector to make the reference within 30 days ·       Completion of acquisition is not mandatory but compensation needs to be provided when not completed	Kudos: ·       Bill attempts to go streamline the process required for land acquisition, rehabilitation and resettlement. ·       An integrated process flow will help in avoiding unnecessary delays, and heartburns Criticisms : ·          The position is not clear on what applies for acquisition below 100 acres. There is always a possibility that agencies acquiring land will acquire in piecemeal to avoid social impact assessment altogether ·          The qualification required for “social scientists” for SIA expert panel is not clear. This can lead to filling the post with cronies ·          Publication of Notice in three newspapers need to be in newspapers having “maximum Circulation” and there is potential space for defrauding and cheating by publishing the notice in newspapers with negligible publication ·          Bill restricts any transaction on land to be acquired from the date of publishing the preliminary notice. However there is a huge arbitrage opportunity for those who have information about impending acquisition which will be used by Land Mafia.
Minimum Compensation for Land	Full payment has to me made 3 months post the award ·       Market value (multiplied by 2 in care of rural area) ·       Market value determined as the higher of  minimum land value, for the registration of sale deeds in the area, where the land is situated; or the average of the sale price for similar type of land , ascertained from 50% of the sale deeds registered during the preceding three years ·       Value of assets attached to land / building ·        Solatium which is 100% of Market Value & Value of assets Total Compensation for Land ·       Market Value + Value of assets attached to land / building +  Solatium	Kudos : ·       Bill increases the compensation amount significantly compared to earlier versions. It also attempts to mitigate the issues of delays and has defined the interest to be paid in case of delays Criticisms: ·          Market value is defined as value shown in the registers of the state government or the stamp value which is fixed by the state government and not the realistic value. ·          The value of agricultural land multiplies by many folds when converted into land for commercial purposes. By not taking this into account, the agricultural class in India is actually subsidizing the industrialization and public good ·       There is no clarity in definition of “Rural Areas” and “Urban Areas” and since there is a clear economic advantage for rural  landholders when their land is acquired, lack of definition will only result in numerous court cases
Resettlement	·       Every displaced family shall be resettled in a resettlement area and 25 infrastructural amenities to be provided in the Resettlement area which are detailed in Schedule 3 of the bill ·       Every buyer who buys land more than 100 acres in rural area and more than 50 acres in urban area through private negotiations  will have to give an application to collector notifying him the intent to purchase, purpose of purchase and the land details. Collector will make the reference to the Commissioner RR and the provisions approved by him will apply in these individual cases.	Kudos : ·       Unlike the previous bill, LARR 2011 has a strong focus on resettlement. The amenities required at the resettled land are defined in detail.  Criticisms: ·       Corporate buyers will have to abide by them only when the size of the land acquired equals or exceeds 100 acres. There is no mechanism to enforce RR provisions when a corporate decides to acquire land in piece meals, through private negotiation. ·       Many of the 25 minimum civic amenities mandated by the government doesn’t exist in all parts of the country, which means Government is passing on its responsibility of providing the same to the private party when they negotiate for a public purpose, which has an economic impact on the viability of the public project.
Minimum RR Entitlements for land owners	Monetary part of RR entitlement t be paid 6 months post award. They include ·       Subsistence allowance Rs. 3K / month / family for 1 year ·       Rs 2k / month / family as annuity for 20 years, with index for inflation ·       House of plinth area of 150 sq mts of house site in rural areas or 50 sq mts plinth area in urban area if house is lost ·       1 acre of land / family in the command area, if land is acquired for an irrigation project 5) Rs 50k for transportation & Rs 50k as one time settlement allowance ·       If land acquired is for urbanization, ; 20% of the developed land to land owners, in proportion to their land acquired ·       In every transfer of land within 10 years of the date of acquisition, 20% of the appreciated value shall be shared with the original owner ·       Mandatory employment for 1 member / affected family or Rs 2 lakh if employment is not offered and lastly Offer of shares up to 25% of the Compensation amount	Kudos : ·       Unlike the previous bill, LARR 2011 has a strong focus on resettlement. The minimum entitlements are elaborated in detail. Criticisms: ·       The principle of ‘land for land' has been abandoned. It figures only in the case of irrigation projects, and there the Bill envisages one acre per family instead of two acres as in many projects like the Sardar Sarovar Project. ·       The Minimum RR will have an economic impact on the project viability and when land is acquired for public purposes, Government should have mechanism to make sure that the entire burden is not  passed on to the private party .
Minimum RR Entitlements for livelihood losers - (with /  without Land)	Monetary part of RR entitlement to be paid 6 months post award. They include ·       Subsistence allowance Rs. 3K / month / family for 1 year ·       Rs 2k / month / family as annuity for 20 years, with index for inflation ·       House of plinth area of 150 sq mts of house site in rural areas or 50 sq mts plinth area in urban area for those residing in the area for 3 years before the date of notification ·       Rs 50k for transportation & Rs 50k as one time settlement allowance ·       Mandatory employment for 1 member / affected family or Rs 2 lakh if employment is not offered and lastly Offer of shares up to 25% of the Compensation amount	Kudos : ·       Unlike the previous bill, LARR 2011 has taken into account the resettlement and rehabilitation of the landless, who were dependent on the land which is to be acquired.  Criticisms: ·       No credible mechanism is defined to identify the livelihood losers.
Return of Land	·       When any land of part of land acquired remains unutilized for a period of 10 years from date of taking over the possession, the same is returned to the land bank of government ·       When ownership of any land acquired is transferred to any person, without development having taken place, 20% of the appreciated land value shall be shared amongst the persons from whom the land have been acquired, in proportion to their land acquired.	Criticisms : ·       There is no provision for reverting of land back to the owners even if the award is Quashed. This will only lead to massive frauds.
Rehabilitation & Resettlement – Institutional Structure	·       State Government to appoint an officer of the rank of Secretary of Government as Commissioner for Rehabilitation and Resettlement, who shall be responsible for supervising the formulation of rehabilitation and resettlement schemes or plans and their proper implementation. ·       Where ever there is involuntary displacement of persons due to acquisition of land, to appoint in respect of that project, an officer not below the rank of Jt  Collector or equivalent ranks to be the Administrator for Rehabilitation and Resettlement ·          Where more than or equal to 100 acres of land are to be acquired, Government shall constitute a Committee under the chairmanship of the Collector to be called the Rehabilitation and Resettlement Committee, to monitor and review the progress of implementation of the Rehabilitation and Resettlement scheme and to carry out post-implementation social audits in consultation with the village panchayat and urban bodies. ·          Apart from government officials the RR committee will have a representative of women representative,  representative each of the Scheduled Castes and the Scheduled residing in the affected area; a representative of a voluntary organization working in the area, a representative of a nationalised bank, Land Acquisition Officer of the project, Chairpersons of the panchayats or urban bodies located in the affected area, MP / MLA and MLC of the concerned area; and a representative of the requiring body with administrator for Rehabilitation and Resettlement as the Member-Convenor.	Kudos : ·       LARR 2011 gives a definite structure to the institutional mechanisms required for RR.
Rehabilitation & Resettlement –  Oversight	Dispute Redressal Institution ·       State Land Acquisition Rehabilitation and Resettlement Dispute Settlement Authority for land acquired by state ·       National Land Acquisition Rehabilitation and Resettlement Dispute Settlement Authority for land acquired by Centre Monitoring Institution ·       National Monitoring Committee for reviewing & monitoring the implementation of rehabilitation and resettlement schemes with representation of the concerned Ministries, Departments of the Central and State Governments and should have eminent experts from the relevant fields.	Kudos : ·       LARR 2011 gives a definite structure to the institutional mechanisms required for RR.