If anyone has been reading the newspapers or going online to check for latest happenings in India, one cannot miss out reading about a certain ordinance issued by the Government of India which enables “land acquisition” for infrastructure projects which fall under several categories. Primary infrastructure – roads, rails, ports, dams, bridges and defense installations; secondary infrastructure like public schools, hospitals, cold storage chains, warehouses which can be built by private players by having the Government as a stakeholder and tertiary infrastructure – private schools, private hospitals, golf courses, townships etc. which are wholly owned by private corporates with no Government stake involved. In each of these cases, Government would now be a land broker acquiring the land from owners by paying the owners under a “R&R package” – which stands for remuneration and rehabilitation of those who will have to be resettled owing to the land acquisition. This ordinance has hit rough weather due to opposition from political parties in the Rajya Sabha (Indian Senate). Although, a defeat on this bill would mean loss of face for the Government internationally and weaken industry sentiments, in India defeating this bill or blocking it via pocket veto is of immense necessity for the benefit of farming community. I must confess upfront that I am not a stakeholder in this discussion because I am neither of the affected parties – land holders or land acquirer, I am involved however, for the larger goal of analysis of policy prescriptions and making necessary suggestions. Please make your own assessment after going through the salient features of the ordinance vis-à-vis the existing bill. I must state emphatically that I am neither a povertarian (a term coined by the political right in India) meaning someone who benefits from sustained poverty in India nor am I an out-and-out capitalist. In fact my political leanings do not matter on this subject. I would however ask to be simply judged on the arguments I place and also on basic human values.
1894 was the year when the Raj (British occupied India) legislated a “Land acquisition” bill used mainly to help the Government forcibly acquire land from owners by paying a set price known as the “circle price”, which is essentially the cost of purchasing agricultural land and then change the ‘use of land’ which means converting agricultural land to commercial land by the stroke of a pen and then use the land to build basic infrastructure like roads, rails, dams, schools etc. In those days, Government was the only entity investing in building infrastructure and this “act of acquisition” was dubbed as nation building. The 1894 act stayed on the Indian statute (like all other British laws, including sedition laws) after Independence and all the land acquisition for “nation building” was being done by enforcing a law that had “colonial mindset”. The first task to be performed by India’s Parliament in 1952 should have been repealing all the colonial laws and replace them with “democratic” laws. The government of the day did repeal many laws from the statute but let several laws stay on- like the land acquisition laws, the sedition law, the unnatural sex (section 377 in CrPC) to name a few. The idea was that these laws will soon become obsolete and future Governments would replace them with more democratic inclusive laws. Little did our first Prime Minister know that having a vision for India will pass with him and all future Governments will govern with aim to get reelected rather than to propagate their vision for India. Somewhere in the seventies and more so in the eighties (1970s and 80s) private players (Industrial houses) of India started getting involved in land purchase for expansion of business by using the Government machinery for land acquisition as it would mean easier access to cheap land without going through the hassles of purchasing land from the land market. Government on its part let the industry abuse the land acquisition law as they provided the much needed funds to political parties for election expenses. Consequently, until very recently Government of India and the various state governments acted like as a glorified land broker for industry.
One argument for the Government to get involved in land acquisition process is because of the land titles in India are not clear because of the hangovers of the “zamindari” (land lord) system and the existence of land mafia. Purchasing any land from the market is hazardous for the private parties as India does not have a database of land titles and relies on the rudimentary method of producing a sales deed as proof of land holding. The land mafia got involved and started producing fake sales deeds to harass the parties involved in a land deal and extort money. This lucrative business of the land mafia could only be stopped if Government took control of the land forcibly and then handed it over to the business for development purposes. This saved the industry from lengthy trial processes over fake claims or settling with the “claimants” of the land by paying them off. In each case the industry lost out because the delays caused and excess money spent. Ideally, the Government should have stepped in and cleaned up the process of land purchase, spend a few years and clean up land titles and create a state wise database of land titles and underwrite these titles. Instead, the Government chose the easier route of acting as a broker on behalf of private players by misusing the provisions of land acquisition law. The land owners (in most cases farmers) and small time agriculturist we paid pittance and their land was forcibly acquired in the name of development and in many cases these farmers lost their livelihood and had to relocate to other villages and work as landless laborers or go to cities and live in slums and work as day laborers. Over a period of time this caused a lot of stress on the cities whose infrastructures were not equipped to bear influx of people in such large numbers. So instead of solving one problem fully, the Government helped create many new problems.
Amount of land that was acquired by government would often be more than the project needed and hence over a period of time, Governments effectively created land banks which it held on to instead of returning it to its owners. After the change of “land use” from agriculture to commercial, the land price soared from 10 times the original up to 100 times the original price depending on the project it was being chosen for. Elected politicians pawned of the excess land held by the Government to favorable parties who in-turn benefitted from change of land use (legitimately or illegitimately) and became millionaires overnight. All this continued unabated and unchecked for a good 25 years when thousands of farmers lost their land and became landless laborers while a handful of people made millions out of this deal. Effectively, the government which was mandated to protect the interests of the governed (farmers included) was reduced to a broker who was abusing its powers to help a few chosen ones make quick bucks at the cost of others. In the year 2010, farmers from all over India laid a siege on New Delhi. The immediate irritant was the events in Bhatta-Parsaul, villages in Uttar Pradesh where the state had to deploy police to evict farmers who refused to give up land to the Government and instead squatted on the lands and dared the state to evict them forcibly. What ensued shook the conscience of the nation. The Police brutally assaulted the villagers, shot rounds killing many of them and injuring scores of them. In a few cases, the women of the village were sexually assaulted. The people who were killed were piled up in a heap and their carcass burned. A land acquisition exercise had turned into a mass murder by the state of its subjects. This prompted several farmer associations to lay siege on New Delhi and force the hand of the Government to repeal the land acquisition law and legislate a new modern law which is fair to the farmers as well as the buyers.
After two and half years of consultation with NGOs, farmers associations, land owners, industry and other affected parties, the Government of the day came up with LARR (land acquisition, rehabilitation and resettlement) act of 2013. The legislation was discussed threadbare in both houses of the Parliament and several amendments moved and accommodated. Finally in October 2013, India had, a sort of modern, sort of fair and sort of compromise deal on land acquisition legislation which was meant to undo the wrongs of the past and make sure that future land acquisitions were done in a fair manner. I will highlight the salient features of the LARR 2013 which were well meaning and also the shortcomings of the law.
Consent: this was a major win for the farmers and other land owners. The land was being acquired forcibly thus far in the name of development and national interest. Going forward, land owners consent would be mandatory (up to 80% for public-private partnerships and up to 70% for infrastructure projects). Meaning, at the very least 2/3rd of the land owners will have to consent for a land to be acquired for projects. Of course there were emergency clauses put in where consent would be waived – mainly for defense installation and nuclear reactors etc. but this clause was largely seen as a win for the land owners.
Remuneration: apart from forcible acquisition, the biggest issue that the land owners had with 1894 act was the lack of proper remuneration. The Government changed the land use post acquisition and helped industry make millions while the original land owners were paid market rate (pre land use change) which were peanuts considering the profits the users of the land made. This gulf brought about a sense of disgust where small time land owners lost the land, lost their livelihood for meagre remuneration while the land users made millions by merely changing land use. LARR 2013 was expected to provide post land use change remuneration but did not go as far; it fell short but was not as bad and unfair as the 1894 act. LARR 2013 provides for 2 times the market rate for urban land and 4 times the market rate for rural land which was sort of a mid-way between both extremes. Another clause added was to make original land owners a shareholder in the new enterprise that was to come up on their land so that they have some share of the profits generated by the enterprise built over land (exceptions include defense installations, nuclear plants, dams etc.) The percentage of shareholding pattern would be agreed upon in between land owners and buyers.
Rehabilitation: apart from the remuneration to the land owners and giving them a share in the windfall profits that change of land use would bring, the daily laborers who work on the piece of land which is being sold also lose their source of livelihood and hence were made a stakeholder under the new law. The bill encourages the enterprise set up on the land to provide a job to one member of each family who is being displaced by the land acquisition. Also, the people have to be relocated to so a similar location which could provide access to purchase land at comparable rates. It is not the ideal like to like displacement but the legislation encourages the Government to relocate the displaced masses to appropriate areas with comparable standard of living.
Multi crop land and forest land: the legislation prohibits acquisition of multi crop land and forest land for purpose of infrastructure building (except as a last resort). In case of the forest land, there is an exception where tribal people will have a say on the land acquisition and will also get a stake or a job in the enterprise that is being put up on forest land. These safeguard were put in because the 1894 bill did not recognize tribal rights and hence caused a constant rift between Government and the tribal who saw this exercise as a trespass on their land.
Social impact assessment: the social impact assessment clause was added to win the confidence of locals. Over the period of 65 years of independence, Governments had lost the confidence of land owners by acting in the interest of industry and by not representing the land owners / farmers adequately. The Governments would acquire land many times more than required and hold it as land banks. This caused a loss to the land owners and gave windfall profits to government cronies. Proper social impact assessment will ensure the locals are explained the benefits of project and also ensure that no extra land is acquired by the Government.
Retrospective clause and land return: The retrospective clause was added to ensure that if land has been acquired many years ago and has been lying unutilized and is part of Government land bank it will be returned to the original land owners and re-acquired under the new law if the need for the land exists. Likewise prospectively if any new land acquired that remains unused for a period of 5 years will lapse and should be returned to the original land owners.
The legislation had an important lacuna; it exempted 13 types of projects which require majority land acquisition from the ambit of the LARR as there were other laws guiding these projects. Parliament decided to revisit this legislation in a year to add a clause removing these exemptions after the other 13 laws were repealed via legislation.
A subsequent ordinance by the Government overturned most of these safeguards sans the remuneration clause in favor of ease of business but in the bargain it turned the clock back 125 years. The underlying assumption for the ordinance is land owners and farmers don’t bother about nation’s progress and hence their land needs to be taken forcibly by Governments in the name of progress. Debate is on in the Parliament and outside over this largesse to industry. We will soon know the future of land wars in India.
So long...
1894 was the year when the Raj (British occupied India) legislated a “Land acquisition” bill used mainly to help the Government forcibly acquire land from owners by paying a set price known as the “circle price”, which is essentially the cost of purchasing agricultural land and then change the ‘use of land’ which means converting agricultural land to commercial land by the stroke of a pen and then use the land to build basic infrastructure like roads, rails, dams, schools etc. In those days, Government was the only entity investing in building infrastructure and this “act of acquisition” was dubbed as nation building. The 1894 act stayed on the Indian statute (like all other British laws, including sedition laws) after Independence and all the land acquisition for “nation building” was being done by enforcing a law that had “colonial mindset”. The first task to be performed by India’s Parliament in 1952 should have been repealing all the colonial laws and replace them with “democratic” laws. The government of the day did repeal many laws from the statute but let several laws stay on- like the land acquisition laws, the sedition law, the unnatural sex (section 377 in CrPC) to name a few. The idea was that these laws will soon become obsolete and future Governments would replace them with more democratic inclusive laws. Little did our first Prime Minister know that having a vision for India will pass with him and all future Governments will govern with aim to get reelected rather than to propagate their vision for India. Somewhere in the seventies and more so in the eighties (1970s and 80s) private players (Industrial houses) of India started getting involved in land purchase for expansion of business by using the Government machinery for land acquisition as it would mean easier access to cheap land without going through the hassles of purchasing land from the land market. Government on its part let the industry abuse the land acquisition law as they provided the much needed funds to political parties for election expenses. Consequently, until very recently Government of India and the various state governments acted like as a glorified land broker for industry.
One argument for the Government to get involved in land acquisition process is because of the land titles in India are not clear because of the hangovers of the “zamindari” (land lord) system and the existence of land mafia. Purchasing any land from the market is hazardous for the private parties as India does not have a database of land titles and relies on the rudimentary method of producing a sales deed as proof of land holding. The land mafia got involved and started producing fake sales deeds to harass the parties involved in a land deal and extort money. This lucrative business of the land mafia could only be stopped if Government took control of the land forcibly and then handed it over to the business for development purposes. This saved the industry from lengthy trial processes over fake claims or settling with the “claimants” of the land by paying them off. In each case the industry lost out because the delays caused and excess money spent. Ideally, the Government should have stepped in and cleaned up the process of land purchase, spend a few years and clean up land titles and create a state wise database of land titles and underwrite these titles. Instead, the Government chose the easier route of acting as a broker on behalf of private players by misusing the provisions of land acquisition law. The land owners (in most cases farmers) and small time agriculturist we paid pittance and their land was forcibly acquired in the name of development and in many cases these farmers lost their livelihood and had to relocate to other villages and work as landless laborers or go to cities and live in slums and work as day laborers. Over a period of time this caused a lot of stress on the cities whose infrastructures were not equipped to bear influx of people in such large numbers. So instead of solving one problem fully, the Government helped create many new problems.
Amount of land that was acquired by government would often be more than the project needed and hence over a period of time, Governments effectively created land banks which it held on to instead of returning it to its owners. After the change of “land use” from agriculture to commercial, the land price soared from 10 times the original up to 100 times the original price depending on the project it was being chosen for. Elected politicians pawned of the excess land held by the Government to favorable parties who in-turn benefitted from change of land use (legitimately or illegitimately) and became millionaires overnight. All this continued unabated and unchecked for a good 25 years when thousands of farmers lost their land and became landless laborers while a handful of people made millions out of this deal. Effectively, the government which was mandated to protect the interests of the governed (farmers included) was reduced to a broker who was abusing its powers to help a few chosen ones make quick bucks at the cost of others. In the year 2010, farmers from all over India laid a siege on New Delhi. The immediate irritant was the events in Bhatta-Parsaul, villages in Uttar Pradesh where the state had to deploy police to evict farmers who refused to give up land to the Government and instead squatted on the lands and dared the state to evict them forcibly. What ensued shook the conscience of the nation. The Police brutally assaulted the villagers, shot rounds killing many of them and injuring scores of them. In a few cases, the women of the village were sexually assaulted. The people who were killed were piled up in a heap and their carcass burned. A land acquisition exercise had turned into a mass murder by the state of its subjects. This prompted several farmer associations to lay siege on New Delhi and force the hand of the Government to repeal the land acquisition law and legislate a new modern law which is fair to the farmers as well as the buyers.
After two and half years of consultation with NGOs, farmers associations, land owners, industry and other affected parties, the Government of the day came up with LARR (land acquisition, rehabilitation and resettlement) act of 2013. The legislation was discussed threadbare in both houses of the Parliament and several amendments moved and accommodated. Finally in October 2013, India had, a sort of modern, sort of fair and sort of compromise deal on land acquisition legislation which was meant to undo the wrongs of the past and make sure that future land acquisitions were done in a fair manner. I will highlight the salient features of the LARR 2013 which were well meaning and also the shortcomings of the law.
Consent: this was a major win for the farmers and other land owners. The land was being acquired forcibly thus far in the name of development and national interest. Going forward, land owners consent would be mandatory (up to 80% for public-private partnerships and up to 70% for infrastructure projects). Meaning, at the very least 2/3rd of the land owners will have to consent for a land to be acquired for projects. Of course there were emergency clauses put in where consent would be waived – mainly for defense installation and nuclear reactors etc. but this clause was largely seen as a win for the land owners.
Remuneration: apart from forcible acquisition, the biggest issue that the land owners had with 1894 act was the lack of proper remuneration. The Government changed the land use post acquisition and helped industry make millions while the original land owners were paid market rate (pre land use change) which were peanuts considering the profits the users of the land made. This gulf brought about a sense of disgust where small time land owners lost the land, lost their livelihood for meagre remuneration while the land users made millions by merely changing land use. LARR 2013 was expected to provide post land use change remuneration but did not go as far; it fell short but was not as bad and unfair as the 1894 act. LARR 2013 provides for 2 times the market rate for urban land and 4 times the market rate for rural land which was sort of a mid-way between both extremes. Another clause added was to make original land owners a shareholder in the new enterprise that was to come up on their land so that they have some share of the profits generated by the enterprise built over land (exceptions include defense installations, nuclear plants, dams etc.) The percentage of shareholding pattern would be agreed upon in between land owners and buyers.
Rehabilitation: apart from the remuneration to the land owners and giving them a share in the windfall profits that change of land use would bring, the daily laborers who work on the piece of land which is being sold also lose their source of livelihood and hence were made a stakeholder under the new law. The bill encourages the enterprise set up on the land to provide a job to one member of each family who is being displaced by the land acquisition. Also, the people have to be relocated to so a similar location which could provide access to purchase land at comparable rates. It is not the ideal like to like displacement but the legislation encourages the Government to relocate the displaced masses to appropriate areas with comparable standard of living.
Multi crop land and forest land: the legislation prohibits acquisition of multi crop land and forest land for purpose of infrastructure building (except as a last resort). In case of the forest land, there is an exception where tribal people will have a say on the land acquisition and will also get a stake or a job in the enterprise that is being put up on forest land. These safeguard were put in because the 1894 bill did not recognize tribal rights and hence caused a constant rift between Government and the tribal who saw this exercise as a trespass on their land.
Social impact assessment: the social impact assessment clause was added to win the confidence of locals. Over the period of 65 years of independence, Governments had lost the confidence of land owners by acting in the interest of industry and by not representing the land owners / farmers adequately. The Governments would acquire land many times more than required and hold it as land banks. This caused a loss to the land owners and gave windfall profits to government cronies. Proper social impact assessment will ensure the locals are explained the benefits of project and also ensure that no extra land is acquired by the Government.
Retrospective clause and land return: The retrospective clause was added to ensure that if land has been acquired many years ago and has been lying unutilized and is part of Government land bank it will be returned to the original land owners and re-acquired under the new law if the need for the land exists. Likewise prospectively if any new land acquired that remains unused for a period of 5 years will lapse and should be returned to the original land owners.
The legislation had an important lacuna; it exempted 13 types of projects which require majority land acquisition from the ambit of the LARR as there were other laws guiding these projects. Parliament decided to revisit this legislation in a year to add a clause removing these exemptions after the other 13 laws were repealed via legislation.
A subsequent ordinance by the Government overturned most of these safeguards sans the remuneration clause in favor of ease of business but in the bargain it turned the clock back 125 years. The underlying assumption for the ordinance is land owners and farmers don’t bother about nation’s progress and hence their land needs to be taken forcibly by Governments in the name of progress. Debate is on in the Parliament and outside over this largesse to industry. We will soon know the future of land wars in India.
So long...
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