Land Acquisition: An overview of proposed amendments to the 2013 Act

On March 10, Lok Sabha passed a Bill to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.  The Bill is now pending in Rajya Sabha.  This blog briefly outlines the major changes the Bill, as passed by Lok Sabha, seeks to make to the Act.

Context

Land acquisition, unlike the purchase of land, is the forcible take-over of privately owned land by the government.  Land is acquired for projects which serve a ‘public purpose’.  These include government projects, public-private partnership projects, and private projects.  Currently, what qualifies as ‘public purpose’ has been defined to include defence projects, infrastructure projects, and projects related to housing for the poor, among others.

Till 2014, the Land Acquisition Act, 1894 regulated the process of land acquisition.  While the 1894 Act provided compensation to land owners, it did not provide for rehabilitation and resettlement (R&R) to displaced families.  These were some of the reasons provided by the government to justify the need for a new legislation to regulate the process of land acquisition.  Additionally, the Supreme Court had also pointed out issues with determination of fair compensation, and what constitutes public purpose, etc., in the 1894 Act.  To this end, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was passed by Parliament, in 2013.

II. Current legislative framework for land acquisition: major shifts from the 1894 Act

The 2013 Act brought in several changes to the process of land acquisition in the country.   Firstly, it increased the compensation provided to land owners, from 1.3 times the price of land to 2 times the price of land in urban areas, and 2-4 times the price of land in rural areas.  Secondly, unlike the earlier Act which did not provide rehabilitation and resettlement, the 2013 Act provided R&R to land owners as well as those families which did not own land, but were dependent on the land for their livelihood.  The Act permits states to provide higher compensation and R&R.

Thirdly, unlike the previous Act, it mandated that a Social Impact Assessment be conducted for all projects, except those for which land was required urgently.  An SIA assesses certain aspects of the acquisition such as whether the project serves a public purpose, whether the minimum area that is required is being acquired, and the social impact of the acquisition.  Fourthly, it also mandated that the consent of 80% of land owners be obtained for private projects, and the consent of 70% of land owners be obtained for public-private partnership projects.  However, consent of land owners is not required for government projects.   The 2013 Act also made certain other changes to the process of land acquisition, including prohibiting the acquisition of irrigated multi-cropped land, except in certain cases where the limit may be specified by the government.

In addition to the 2013 Act, there are certain other laws which govern land acquisition in particular sectors, such as the National Highways Act, 1956 and the Railways Act, 1989.  The 2013 Act required that the compensation and R&R provisions of 13 such laws be brought in consonance with it, within a year of its enactment, (that is, by January 1, 2015) through a notification.  Since this was not done by the required date, the government issued an Ordinance (as Parliament was not in session) to extend the compensation and R&R provisions of the 2013 Act to these 13 laws.  However, the Ordinance also made other changes to the 2013 Act.

The Ordinance was promulgated on December 31, 2014 and will lapse on April 5, 2015 if not passed as a law by Parliament.  Thus, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Bill, 2015 has been introduced in Parliament to replace the Ordinance.  The Bill has been passed by Lok Sabha, with certain changes, and is pending in Rajya Sabha.  The next section outlines the major changes the Bill (as passed by Lok Sabha) proposes to make to 2013 Act.

III. Changes proposed by the 2015 Bill to the 2013 Act

Some of the major changes proposed by the 2015 Bill (as passed by Lok Sabha) relate to provisions such as obtaining the consent of land owners; conducting an SIA; return of unutilised land; inclusion of private entities; and commission of offences by the government.

As mentioned above, the 2013 Act requires that the consent of 80% of land owners is obtained when land is acquired for private projects, and the consent of 70% of land owners is obtained when land is acquired for public-private partnership projects.  The Bill exempts five categories of projects from this provision of the 2013 Act.  These five categories are: (i) defence, (ii) rural infrastructure, (iii) affordable housing, (iv) industrial corridors (set up by the government/government undertakings, up to 1 km on either side of the road/railway), and (v) infrastructure projects.

The Bill also allows the government to exempt these five categories of projects from: (i) the requirement of a Social Impact Assessment, and (ii) the limits that apply for acquisition of irrigated multi-cropped land, through issuing a notification.  Before issuing this notification, the government must ensure that the extent of land being acquired is in keeping with the minimum land required for such a project.

The government has stated that these exemptions are being made in order to expedite the process of land acquisition in these specific areas.  However, the opponents of the Bill argue that since the five exempted categories cover a majority of projects for which land can be acquired, consent and Social Impact Assessment provisions will not apply to these projects.

Secondly, the Bill changes the time period after which unutilised, acquired land must be returned.  The 2013 Act states that if land acquired under it remains unutilised for five years, it must be returned to the original owners or the land bank.  The Bill changes this to state that the period after which unutilised land will need to be returned will be the later of: (i) five years, or (ii) any period specified at the time of setting up the project.

Under the 2013 Act, as mentioned above, land can be acquired for the government, a public-private partnership, or a private company, if the acquisition serves a public purpose.  The third major change the Bill seeks to make is that it changes the term ‘private company’ to ‘private entity’.  This implies that land may now be acquired for a proprietorship, partnership, corporation, non-profit organisation, or other entity, in addition to a private company, if the project serves a public purpose.

Finally, under the 2013 Act, if an offence is committed by a government department, the head of the department will be held guilty unless he can show that he had exercised due diligence to prevent the commission of the offence.  The Bill removes this section.  It adds a provision to state that if an offence is committed by a government employee, he can be prosecuted only with the prior sanction of the government.

For more details on the 2015 Bill, see the PRS Bill page, here.via PRS blog

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