Unmaking of a progressive law

The Centre has issued an ordinance to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.  According to the government, the Act needed changes as it was anti-development. The Finance Minister wrote in his blog on January 5, 2015: “A highly complicated process of acquisition which renders it difficult or almost impossible to acquire land can hurt India's development.” The ordinance is claimed to be better than the Act, both for the land acquiring entities and the people affected by the process. 

Such claims are unfounded and premature since the Act has been in place only for a year. Empirical studies show that more than 80 per cent of the projects suffered delays even under the previous Land Acquisition Act, 1894, which had empowered the government agencies with the notorious ‘urgency clause’ to acquire land without any scrutiny and justification of the objective of the acquisition. Indeed, several other factors also delay projects. In any case, rather than simplifying the so-called ‘complicated process’, the government has simply decided to scrap it! 

The ordinance has rolled back several progressive features of the Act. It has put the clock back to the era when private interest rather than public purpose dictated the land acquisition process. Ambiguities in the colonial law were frequently manipulated by a nexus of companies and decision-makers to acquire land for all sorts of private projects. The acquisition-affected people got a pittance by way compensation. 

The new Act came after years of struggle by farmers, agricultural workers and tribal people against inadequate compensation and rampant misuse of the colonial land acquisition law by companies. It made the acquisition process consultative and participatory. Further, it created stakes in the project for the parties on both sides of the land acquisition process. Land acquisition for private companies required prior consent of 80 per cent of the affected families. As a result, the Act drastically reduced the scope for misuse of the law to serve private interest. Moreover, it made rehabilitation and resettlement of the affected people an actionable legal right. 

The ordinance subverts the crucial distinction between public and private purpose acquisitions. It widens the scope of private purpose acquisitions. Private hospitals and educational institutions have been added to the list of infrastructure projects. Besides, the requirement of prior consent for private projects has been done away with for projects such as rural infrastructure, affordable housing, industrial corridors and physical and social infrastructure.

Consequently, land can be acquired by force for a large number of private projects, including those in the health, tourism and cold storage sectors. The list also includes Special Economic Zones, notwithstanding the fact that a recent CAG report gives a damning account of the misuse of land acquired for SEZs.  

Along with SEZs, ‘public-private partnerships’ (PPPs) for physical and social infrastructure have been exempted from the prior-consent clause. It is true that some of these are genuine projects aimed at tapping private funds for infrastructure. However, many a time such partnerships have been used simply as an ingenious means of acquiring and transferring land to private entities. Invariably, excess land is acquired which is then used by companies for real estate and other commercial purposes. The process is facilitated through a long-term renewable lease. Post acquisition, companies make a huge fortune by leasing out 'developed' land to other private entities. PPPs for Delhi airport and the Yamuna and Ganga expressway projects are some of the cases in point.  

The ordinance has also scrapped the requirement of a social impact assessment study for projects. This has dealt a deadly blow to the consultative and participative acquisition process under the 2013 Act. The assessment is vital to ensure that potential social benefits from a project outweigh the cost to the people affected by the land acquisition. It can help minimise the adverse effects of an acquisition — in terms of the loss of livelihood, number of displaced families as well as damage to the environment.  Nonetheless, the ordinance has repealed this requirement for SEZs, dams, power plants, waterways, among others. 

Any meaningful rehabilitation process requires a careful identification of the project-affected people and documentation of the effects of land acquisition on their livelihood, residence and other public facilities. This exercise is mandated by Section 4 (5) of the Act. Such safeguards ensure that people who sacrifice their land, livelihood and residence for the larger public good are not shortchanged. The ordinance leaves the scope and form of resettlement to bureaucratic discretion. What a tribute to the Narmada Bachao Andolan!

In such a scenario, there is no merit in the official claim that the ordinance protects the interests of the acquisition-affected people. Also, the burden of compensation under the Act has been exaggerated. The de-jure compensation can be two to four times the market value, depending on the location of the project. The de-facto ‘market-value’ is estimated on the basis of sale deeds of similar property. Due to several reasons, sale-deeds are usually under-valued. For one, they pertain to past prices. For another, to save on the stamp duty, people report only a fraction of the actual property value in the sale deed. Consequently, even if compensation is several times the sale deed rates, it at best becomes comparable to the actual market value.

True, land is needed for developmental projects. However, we should be mindful of the fact that given the country's high population density, land acquisition typically affects a large number of people. When agricultural land is acquired, numerous farmers and agricultural workers lose their only source of livelihood.  In such a scenario, it is imperative that compulsory land acquisition is allowed only for genuine public purposes. There is a need to strike a balance between conflicting interests of the parties involved. 

The ordinance falls short of this objective by a big margin. Rather than being guided by perceived difficulties of some interest groups, it would have instead been more prudent to study the experience of implementing the Act for some time before making drastic changes through an ordinance.