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The salient features of The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which repeals the Land Acquisition Act, 1894 are as follows (Please click here  to access):

• Payment of compensation upto four times the market value in rural areas and two times the market value in urban areas.

• Rehabilitation and Resettlement is an integral part of the land acquisition. No family will be displaced before rehabilitation.

• A social impact assessment study to be done compulsorily in all cases of land acquisition irrespective of extent of area.

• The definition of ‘affected families’ has been extended to include not only the land owners but also others dependent on land for their livelihoods like agricultural labourers, tenants.

• To ensure transparency and participation, the Act provides for consent of at least eighty and seventy percent of the land owners in the cases of land acquisition for Private and Public Private Partnership Projects respectively.

• In Scheduled Areas consent of the Gram Sabhas/ Panchayats / Autonomous District Councils is mandatory in all cases of land acquisition.

• To safeguard food security and to prevent arbitrary acquisition, the Act directs the States to impose limits on the multi cropped irrigated land that can be acquired.

• In case, land remains unutilized after acquisition, the new Act empowers States to return the land either to the owner or to the State Land Bank. 
In order to access the Draft National Land Reforms Policy (dated 18 July, 2013), prepared by Ministry of Rural Development, please click here.

The report by the Standing Committee on Rural Development pertaining to Land Acquisition, Rehabilitation and Resettlement (LARR) Bill 2011 was tabled in the Lok Sabha on 17 May, 2012. As per the Standing Committee Report 2012, the salient features of the LARR Bill 2011 (now renamed as Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill) are as follows:

(1) New integrated legislation dealing with land acquisition and rehabilitation & resettlement while repealing the Land Acquisition Act, 1894.

(2) Exemption to 16 Central Acts specified in Fourth Schedule from the ambit of the Bill.

(3) Defining the term affected family, which includes both the land losers and livelihood losers.

(4) Provision of R & R benefits in case of specified private purchase of land equal to or more than 100 acres in rural areas and equal to or more than 50 acre in urban areas

(5) Provides Social Impact Assessment (SIA) study in all cases where the Government intends to acquire land for a public purpose.

(6) Provides for formation of a Committee under the Chief Secretary for examining proposals of land acquisition where land sought to be acquired is equal to or more than 100 acres.

(7) Putting limitations on acquisition of multi-crop land for safeguarding the food security.

(8) Institutional mechanism for R&R in the form of institutions of Administrator for Rehabilitation and Resettlement, Commissioner for Rehabilitation and Resettlement, Rehabilitation and Resettlement Committee at project level, the Land Acquisition, Rehabilitation & Resettlement Authority at State level and National Monitoring Committee at Central level.

(9) Provisions of consent of the 80 per-cent affected families for land acquisition for certain projects.

(10) Provision for enhanced compensation to the land owners and rehabilitation and resettlement entitlements.

(11) Provision of 25 per-cent on shares as part of compensation in cases where the Requiring Body offers its shares to the owners of land whose land has been acquired.

(12) Restricting the ‘urgency clause’ for land acquisition for Defence of India or National Security or for any other emergency out of natural calamities.

(13) Specified timelines for payment of compensation and provision of rehabilitation and resettlement entitlements.

Recommendations of the Parliamentary Standing Committee on LARR 2011 Bill

It has been noted by the Parliamentary Standing Committee on LARR 2011 Bill that despite the Government having more than two years time for wider consultations with all stakeholders i.e. between the constitution of Fifteenth Lok Sabha 01.06.2009 and introduction of the LARR Bill, 2011 in September, 2011, it initiated the process of consultation only on 29 July, 2011 when the Draft Bill was put on Department of Land Resources (DOLR, http://dolr.nic.in/) "website" for consultations and the comments thereon were sought by 31 August 2011. The Cabinet approved the Draft Bill on 5 September, 2011 and the Bill was introduced in Lok Sabha on 7 September 2011, leaving little time at the disposal of the Government to seriously consider the suggestions received from various stakeholders.

Although the Government was late by over two years in bringing the LARR Bill again they gave little time to the stakeholders, including Central Ministries and State Governments concerned to submit their views and also to consider the same. Consultation by the Standing Committee with the State Governments, some of the Central Ministries concerned like Ministries of Urban Development, Panchayati Raj, Tribal Affairs etc. revealed that that their views are at variance with the DoLR in respect of contents of the Bill. This compelled the Standing Committee to invite suggestions from the general public, industry, farmers, NGO's, experts, Central Ministries, State Governments etc.

The following key issues having relevance to the provisions of the LARR Bill 2011 came up during discussions held with various stakeholders:

A. Doctrine of Eminent Domain and Acquisition as 'Public Purpose' for private corporations, Public Private Partnerships (PPPs).

B. Powers of the Central Government vis-à-vis State Governments in legislation for sale/purchase of land and R & R provisions

C. Role of Institutions of self government-established by Parts IX & IX A of the Constitution in land acquisition and R&R

D. Applicability of LARR Bill, 2011 in Scheduled Areas (Schedules V and VI of the Constitution)

E. Special provisions to safeguard Food Security (Clause 10)

F. Exemption of 16 Central Acts from purview of the Bill (Clause 98 & Fourth Schedule)

The Standing Committee report on LARR 2011 has provided the detailed discussion on these above-mentioned issues. The suggestions given by the Committee regarding these issues are being provided here.

A. Doctrine of Eminent Domain and Acquisition as “Public Purpose” for Private Corporations, Public-Private Partnerships

Amendment done to section 4 of the original Land Acquisition Act 1894 in 1984 by inserting the words “or for a Company” after “any public purpose” extinguished any differentiation between acquisition for a State purpose and “acquisition for a private enterprise” or “State enterprise”. What the Courts could interpret from this amendment is that any notification of acquisition issued under section 4 need not specify whether the acquisition is for a “public purpose” or for “a Company”. This move led to massive acquisition of land by the State for Companies.

The Standing Committee report has alleged that the LARR Bill, 2011 “seeks to permit, and even facilitate, the acquisition of land by the Government for private companies”. By agreeing with the Government of India appointed Expert Group Report (under the Chairmanship of D. Bandyopadhyay) on Development Challenges in Extremist Affected Areas, the Committee report has mentioned that displacement of people happened due to large scale acquisitions. The Standing Committee has suggested that “instead of reverting to the classical concept of Eminent Domain or diluting it, the present 2011 Bill extinguishes the distinction in the original 1894 Act between acquisition by the State for a State purpose from purchase of land by a Company for a private purpose by including “Public Private Partnership projects” and “private companies” in the definition given in clause 2(1)(b) and (c), as well as 3(za)(vi)(B) and 3(za)(vii) respectively, subject only to their producing “public goods or the provision of public services” and “the provision of land in the public interest”, it being entirely left to the executive to determine what is the “public interest” or “public goods” or “public services”.”

The Standing Committee has recommended that land acquisition should not be for use by PPPs and private companies. Public purpose should be limited to state sponsored projects as defined in Clause 3(za)(i) to (vi)(A). The Committee has asked for deleting the provisions relating to acquisition of land for private companies and PPPs [(Clause 3(za)(vi)(B) and (vii)]. The Committee has recommended that Clause 3 (o) (v) which gives wide discretion to the government to define infrastructure projects should be deleted. The Committee has suggested that infrastructure projects should be included in the definition of public purpose.

The Committee has rejected those sub-clauses of Clauses 2 and 3 that place wide discretion in the hands of the executive to define “public purpose” and “infrastructure projects” for for-profit enterprises. It, therefore, has asked for deletion of Clauses 2(1)(b) & (c), 2(2)(b), 3(o)(v), 3(za)vi)(B) and (vii). It has recommended that all cases of land acquisition must entail obligations for adequate compensation, rehabilitation and resettlement to all land losers and other affected persons.

While questioning the role of Indian State in carrying out land acquisition for Companies in the name of “public purpose”, the Standing Committee has given the example of countries like USA, Japan, Canada, EU, Australia etc. where private purchase of land and not State acquisition, is the standard. In most developed countries, there is no provision in the laws for State acquisition of privately held land for profit-making private enterprises or for public-private enterprises, the Committee report argued.

B. Powers of the Central Government vis-vis State Governments in legislation for sale/purchase of land and R&R provisions

Clause 2 (2) (a) of the LARR Bill 2011 provides that R&R provisions are mandatory for all private purchases if the land purchased is over 100 acres in rural areas and 50 acres in urban areas. However, the Standing Committee has recommended that since sale and purchase of land is a State subject, State legislatures have the discretion and flexibility on whether there should be R&R and if so prescribe a threshold for R&R provisions. The Committee report said: "State legislatures, bearing in mind the provisions of this Act, may by law provide for R&R provisions on sale/purchase of land. Limits/ceiling for the purpose shall be fixed by respective States keeping in view the availability of the land and density of the population."

C. Role of Institutions of self government established by Parts IX & IX A of the Constitution in land acquisition and R & R

Criticizing the provision in the LARR Bill 2011, where the role of Gram Sabha is limited to consultation during the time of land acquisition, the Committee has suggested that the role of local institutions of self-government should be broadened so as to ensure centrality of these institutions in the planning and implementation of the Bill, with a view to making the entire process of land acquisition and R&R participative, transparent and pro-people in accordance with the letter and spirit of Articles 243G and 243W of Parts IX and IXA of the Constitution. Under Articles 243G and 243W of Parts IX and IXA of the Constitution, State legislation is required to specifically empower local institutions of self-government so as to undertake both planning and implementation of "economic development and social justice". “Beyond merely "consulting" Gram Sabhas, consensus or, at least, consent by the majority of Gram Sabha members (or equivalent body in urban areas where these have been constituted) should be obtained in all matters pertaining to LARR”, emphasized the Committee report. The decision making process regarding issues such as land acquisition, review of R&R schemes, determination of compensation, and any dispute regarding the compensation awarded should be entrusted on local elected authories. The Committee has recommended that the Expert Group evaluating the Social Impact Assessment (SIA) report should also have one or more members nominated from the affected Gram Sabha.

D. Applicability of LARR Bill, 2011 in Scheduled Areas

The Standing Committee report has found that the “provisions of the LARR Bill 2011 in respect of areas covered under Schedules V and VI of the Constitution have not been dealt with separately but through provisos to some of the clauses besides being mentioned in the Schedules of the Bill, particularly the Second Schedule”.

The Committee has recommended that alienation of land or land acquisition in Scheduled Areas should be avoided as far as possible. In case of unavoidable land acquisition for public purpose projects, “special provision should be made for increased compensation and resettlement and rehabilitation provisions that enforce stricter conditions such as relocation in a similar ecological location, with communities being mandatorily relocated together so as to preserve the economic opportunities, language, culture and community life of the tribal communities”. Consent or approval by majority of Gram Sabhas and Autonomous District Councils (ADCs) should be made mandatory in case of land acquisition. Independent and neutral persons should be present in order to watch the proceedings of discussions within the Gram Sabhas/ ADCs so as to ensure that the process of ‘consent seeking’ is transparent. It has been recommended that PESA provisions must be strictly observed and indicated in all related provisions in the LARR Bill, “particular care being taken to ensure that Panchayats at the appropriate level and the Gram Sabhas are specifically endowed with powers to prevent alienation of land and to take appropriate action to restore any unlawfully alienated land, as provided for in Section 4m (iii) of PESA”.

E. Special Provisions to safeguard Food Security (Clause 10)

Provisions under the Clause 10 of the LARR Bill want to protect irrigated and multi-cropped land from land acquisition so as to ensure food security. Only under exceptional circumstances a maximum of five per cent of irrigated multi-cropped land may be acquired in a district with certain conditions such as: “whenever multi-crop irrigated land is acquired under sub-section (2), an equivalent area of culturable wasteland shall be developed for agricultural purposes”. However, the Standing Committee on LARR Bill 2011 is of the opinion that food security is not confined to producing rice and wheat in irrigated land. Cultivation of nutritional coarse grains, pulses and oilseeds in dryland or rain-fed areas cannot be neglected. Hence the Committee has recommended that “in Chapter III, all provisions regarding “irrigated multi-cropped land” be replaced by “any land under agriculture cultivation” so as to ensure safeguard for food security in a full measure”.

F. Exemption of Central Acts from Provisions of the Bill [Clause 98 and Fourth Schedule]

Clause 98 of the LARR Bill 2011 made sure that the proposed Act shall not apply to the land acquisition processed under various Acts in the Fourth Schedule, which are listed below:

1. The Ancient Monuments and Archaeological Sites and Remains Act, 1958.
2. The Atomic Energy Act, 1962.
3. The Cantonments Act, 2006.
4. The Damodar Valley Corporation Act, 1948.
5. The Indian Tramways Act, 1886.
6. The Land Acquisition (Mines) Act, 1885.
7. The Metro Railways (Construction of Works) Act, 1978.
8. The National Highways Act, 1956.
9. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962.
10. The Requisitioning and Acquisition of Immovable Property Act, 1952.
11. The Resettlement of Displaced Persons (Land Acquisition) Act, 1948.
12. The Special Economic Zones Act, 2005.
13. The Coal Bearing Areas Acquisition and Development Act, 1957.
14. The Electricity Act, 2003.
15. The Railways Act, 1989.
16. The Works of Defence Act, 1903

It has been suggested by various organizations and State Governments during the consultation with the Standing Committee that “by keeping out the 16 Central Acts outside the purview of the Bill, under which Central Government acquires land for Central Projects, almost 95 percent of land acquisition would be outside the purview of the Bill”. Some of the State Governments complained that while Central Government sought to exempt all Central Acts from the purview of the Bill, they wanted to impose the same on the State Governments. Therefore the Standing Committee has recommended not exempting any of these Central Acts from the purview of LARR Bill. The Committee has suggested that necessary amendments should be brought in these Central Acts so as to bring them at par with the LARR Bill 2011.

Definition of "affected family"

Clause 3 (b) & (c) of the LARR Bill 2011 defined "affected family" to include (i) landowners; (ii) agricultural labourers, tenants who have been working in the affected area for three years prior to the acquisition; (iii) tribals and forest dwellers; (iv) families whose livelihood for the previous three years is dependent on the forests or water bodies; and (v) families who have been given land by the state or central government. The Standing Committee has recommended that within the definition of affected family:
* “Tribals” should be substituted by “Scheduled tribes”
* “Traditional rights” should be substituted by “forest rights”
* “Affected people” should be substituted with “affected family”
* “Three years” in the definition should become “three years or more”

Clause 3 (m) of the LARR Bill 2011 defined family includes a person, his or her spouse, minor children, minor brothers and sisters dependent on him. The Standing Committee has recommended that widows and divorcees and abandoned women should be considered a separate family.

R&R entitlements

R&R entitlements provided to displaced families under the LARR Bill 2011 include among other things: (i) land for a house as per the Indira Awas Yojana in rural areas or a constructed house of at least 50 square metres plinth area in urban areas; (ii) a one-time allowance of Rs 50,000 for affected families; and (iii) the option of choosing either mandatory employment in projects where jobs are being created or a one-time payment of Rs 5 lakh or an inflation adjusted annuity of Rs 2,000 per month per family for 20 years. The Standing Committee has recommended that the monetary components in the R&R entitlements given in Schedule II in the Bill should be indexed to inflation.

Under the LARR Bill 2011, every resettled area is to be provided with certain infrastructural facilities which include roads, drainage, provision for drinking water, grazing land, banks, post offices, public distribution outlets, etc. However, the Standing Committee has recommended that the infrastructure facilities should be decided on a case by case basis.

Unutilized land

Clause 95 on unutlized land of the LARR Bill said that if an acquired land is left unutilised for a period of 10 years from the date it was acquired, it shall be returned to the Land Bank or the appropriate government. The Standing Committee has recommended that this period should be reduced to five years and if left unutilised, the land should be returned to the land owners. The Committee has also asked for clearly defining the term Land Bank in the LARR Bill 2011.

Urgency provisions

The LARR Bill 2011 said that if land is acquired in urgency, an additional 75 percent compensation shall be provided. The Committee asked that in cases of urgency it should be clarified that the extra compensation would be 75 per cent of the total compensation package/ solatium calculated. Under the LARR Bill 2011, if a land is proposed to be acquired under the urgency provisions, a Social Impact Assessment (SIA) may not be conducted. The Committee has recommended that a notice should be issued if SIA is not conducted in an acquisition under the urgency provisions.

Compensation package

Under the LARR Bill 2011, compensation for the land acquired shall be based on the higher of (a) the minimum land value, specified in the Indian Stamp Act, 1899 for the registration of sale deeds; and (b) the average sale price of the higher priced 50% of all sale deeds registered in the previous 3 years for similar type of land situated in the vicinity. In rural areas, this amount would be doubled. The value of the assets (trees, plants, buildings etc) attached to the land being acquired will be added to this amount. This total amount will then be multiplied by two to get the final compensation amount. In cases of the urgency Clause, additional 75 per cent compensation would be offered.

The Standing Committee has recommended that the term “market value” should replace “minimum value”. In addition, a multi-member land pricing commission or authority should be constituted by appropriate government to finalize the cost of land acquisition state wise/area wise. Award given for the land acquired should be treated only as compensation and not as a base for circle rate for subsequent acquisitions so as to allay the fears of corporate sector regarding a speculative price spiral. Also, 12 per cent interest per annum should be paid in addition to the compensation from the date of the notification till the date of the award.

Rural Expert

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