Policy Of Land Acquisition In India Economics Essay

Land Acquisition has been a firing issue in the sphere of public policy of independent India.though it ne’er left the kingdom of public attending and academic treatments, it enjoyed increased public attending in the last few old ages. It is in this context that authorities decided to present Land Acquisition Rehabilitation and Resettlement Bill 2011 ( LARR 2011 ) in topographic point of Land Acquisition Act of 1894.

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Land acquisition by the province drives on the rule or philosophy of eminent sphere. The philosophy of eminent sphere is non new to the history of world ; one of the earliest illustrations comes from bible when king Ahab of Samaria offered compensation to Naboth for Naboth ‘s vinery. Coming to modern times, as importance of land as a factor of production increased exponentially, provinces began to progressively use eminent sphere to transport out its ends. It equips the province to take over private belongings without proprietors consent for a public intent. By this province is given an extra power that is non available to private parties. It can forcefully buy the private belongings for public usage. This ability to set about disapprobation with payment signifiers the anchor of policy of land acquisitions across the Earth.

When the province takes up land based on eminent sphere the major economic job that arises is that it contradicts the impression of belongings as a beginning of single liberty with the power of province to modulate usage and temperament of belongings. To get the better of this the authorities get and take over land when it feels there is a ‘public intent ‘ which is of higher precedence than the lands present usage for the general good of public. This is the same logic that drives the policy of public intent in India. The remotion of ‘the right to belongings ‘ which was originally portion of fundamental law under article 19 by 44th amendment act should be viewed in this context. This rhenium ascertained the province ‘s ability to use eminent sphere expeditiously.

Land Acquisition Act of 1894 was really much in colonial in nature. Though seamster made to function the colonial involvements, this has remained the primary tool for land acquisition in India even after independency. This act has been amended in old ages 1919, 1921, 1923 and 1933 before independency and in the old ages 1962, 1967 and 1984 after independency. It has been argued that ‘ the history of eminent sphere in India is a saga of un mitigated maltreatments of the jurisprudence, which is the antediluvian and equivocal LAAaˆ¦.the provinces have repeatedly exploited ambiguities in the act to get land for companies and the powerful. ‘[ 1 ]Post independency Indian economic system, in spirit with the Nehruvian vision of development, witnessed a figure of developmental undertakings. Most of these undertakings undertaken to build the so called ‘modern temples of India ‘ resulted in immense mass supplantings. The premiss of ‘public intent ‘ was extensively used by the authorities to warrant these supplantings. ‘Mass supplanting posed an early menace to the legitimacy of undertaking of development. This phenomenon defied the logic of eminent sphere in showing that the nexus between acquisition was incapable of admiting the 1000s and 100s of 1000s who would stand to lose their land. ‘[ 2 ]In the last three decennaries province appeared more as an agent to ease to reassign land to companies. In 1984, when the act was intricately amended to cover with the short approach, it was seen as an effort to reenforce provinces function in geting land for companies. Allegations of similar sort were reinforced by the neo progressive reforms which raised the demand for infinites well. Land acquisition became a combustion issue. Undertakings of multinationals in assorted countries met with protests which received broad attending. Singur, Nandigram, Jaitapur, Bhatta-Parsaul, Kalinganagaraˆ¦ . the list of struggle zones goes on. A national policy on rehabilitation was notified merely in 2004 and was replaced by National Rehabilitation policy in 2007.It is in this background that the Land Acquisition Rehabilitation and Resettlement Bill were introduced by the authorities. ‘It is rather apparent that the Bill is an effort to derive control over the struggle and force associated with land acquisition and respond to the opposition motions against land acquisition across India. ‘[ 3 ]

Policy of Land Acquisition in India: A Peep into the LARR 2011 & A ; LAA 1894.

To understand how the policy has evolved over the period we will set about a comparative analysis. We would be looking at the cardinal characteristics of LARR 2011 Bill and contrast it with LAA 1894 or its subsequent amendments.

LARR 2011 is a combined jurisprudence. It deals with non merely land acquisition but besides rehabilitation and relocation ( R & A ; R ) .Currently R & A ; R is undertaken as per the ‘National Rehabilitation and Resettlement Policy, 2007 ‘ .

Harmonizing to the LARR, when the appropriate authorities intends to get land for a public intent a societal impact appraisal ( SIA ) survey has to be undertaken.SIA is done in audience with gram sabha in the rural country or an tantamount organic structure in the urban country. This SIA is so evaluated by an ‘independent -multidisciplinary group ‘ and is passed to a C S commission who examine the legitimacy of ‘public intent ‘ and SIA. Once the needed studies and public hearing is done, authorities makes the declaration to get the land. This procedure varies well with the 1894 act, which is more unilinear and aggregator centric. In petroleum footings, whenever it appears to the Government that the land in any vicinity is needed for any public intent, the territory aggregator surveies the proposal and notifies acquisition. Expostulations are invited from the concerned parties and a study is submitted to authorities who will eventually declare the land for acquisition. The land is so measured, compensations are calculated and awarded.

Compensation to the affected is another country of pronounced difference. In the LAA, the compensation was based on the market monetary value based on the sale workss. The amendss sustained ( if any ) by the land proprietor are besides taken into consideration. If the individual interested has protest with the compensation, the issue is settled in tribunal ( subdivision 23, LAA 1894 ) .In the LARR, First, the market value of the acquired land is computed as the higher of ( 1 ) lower limit land value specified in the Indian Stamp Act, 1899 for the enrollment of sale workss in that country ; or ( 2 ) the norm of the sale monetary value of similar type of land in the bordering countries calculated from top 5o per centum gross revenues in last three old ages. Once the market value is calculated, it is doubled for land in rural countries. Then the value of all assets attached to the land ( trees, edifices, etc ) is added to this sum for entire compensation.[ 4 ]

About the definition of ‘public intent ‘ both remain loosely same. The lone pronounced difference is that the demand of 80 % people affected by the undertaking in certain instances. This is required when Land acquired by the Government for purposes other than specified or for public sector companies or for PPP undertakings for the production of public goods or the proviso of public services. This is besides applicable for private companies geting land for the production of public goods or proviso of public services.

Another important alteration in the current measure is the incorporation of Rehabilitation and Resettlement bundle to the affected households. The aggregator shall go through the entitlements to the affected households as per the 2nd agenda of the act.the term affected as defined in the measure includes non merely land proprietors but besides those who are dependent on the affected country for support. This brings a broad array of individuals under the scope of jurisprudence. Along with land proprietors who would lose their land, others like right holders under forest rights act 2006, agricultural laborers and renters whose support depends chiefly on the land being acquired ( over the last three old ages ) , forest gathers, fisher common people etc dependant on the H2O organic structures or woods when they are acquired.

Following is a tabular array comparing some cardinal characteristics between 1894 ACT and LARR Bill.[ 5 ]


1894 ACT


Public Purpose

Includes several utilizations such as substructure, development and lodging undertakings. Besides includes usage by companies under certain conditions.

No important alteration.

Consent from affected people

No demand

Consent of 80 % of displaced people required in instance of acquisition for private companies and public-private partnerships.


No Provision

SIA has to be undertaken in instance of every acquisition.


Based on Market Value

Market value doubled in rural countries and non in urban country.

Market Value

Based on the current usage of land. Explicitly prohibits utilizing the intended usage of land while calculating market value.

Higher of: ( a ) value specified for cast responsibility, and ( B ) norm of the top 50 % by recorded monetary value of sale of land in the locality.


30 %

100 %

Resale of Land

No proviso

Prior permission of the authorities required.

Sharing of Net incomes

No Provision

If the acquired land is fresh and is transferred, 20 % of the net incomes shall be shared with the original proprietors.

R & A ; R

No Provision

R & A ; R necessary for all affected households. Minimum R & A ; R entitlements to be provided to each affected household specified.

Source- hypertext transfer protocol: //www.prsindia.org.


As evident from our treatment so far LARR is a singular move off from the inefficiencies of LAA. While it has been lauded for its comprehensive attack by many, some called it ‘well-intentioned but earnestly flawed. ‘[ 6 ]A close expression at it will give a better image of the nature of public policy of Land Acquisition in India.

One of the many issues suggested is that of compensation. The measure tries to work out the job within the logic of market. This is hard due to assorted grounds. ‘The usage of market monetary value for voluntary dealing as a placeholder for proprietor ‘s value in forced acquisition is basically flowed. ‘[ 7 ]Advocates of this statement maintain that rating of land is a subjective affair and non a touchable property that can be objectively measured. Dispossessed proprietors rating could be different from what market seems to be fit. The job aggravates when there the land market is imperfect. In most countries the minutess are few and non crystalline go forthing adequate room for bureaucratic use. The monetary value reflected might non be in understanding with the existent value. To get the better of this deficit, LARR proposes an arbitrary markup over market monetary value. While market monetary value itself is non a good index for compensation, randomly increasing it is bound to convey in more inefficiency. Counter statement for this maintains that this is acceptable as scientific computation of value is cumbrous and frequently non practical. But about everyone seems to hold that the signals given by market monetary value are extremely flawed due to the above mentioned grounds.

Another issue connected with the jobs of compensation is that the measure is that it is prone to inordinate judicial proceeding. Litigation over compensation has ever been a characteristic of mandatory land acquisition and that continues here besides. There is barely anything proposed in the measure to avoid this barbarous rhythm that causes immense wastage of resources. A solution for this might non be easy as it is an built-in defect of utilizing high sphere philosophy.

Bad minutess which drive up the land monetary values are besides a vexing job. Though the LARR attempts to forestall it by stop deading land dealing after presentment, this entirely might accomplish the aim. There is a possibility that the clip spread between SIA presentment and the land acquisition might drive up compensation sums. Presentment of SIA could fuel the minutess in the land market raising the monetary values.

LARR allows compensation by manner of portions and unsecured bonds as portion of compensation. It stipulates that such compensation should non transcend 25 % of market value of land. This is in contrast to the position held by parliament standing commission which maintained that it is non practical and should be over and above admissible compensation. This triggers the argument of how efficient is hard currency transportations to people who lack investing expertness or entree to fiscal instruments. LARR has justly increased husbandman picks in design of R & A ; R. The job is that the measure does non do it explicit the nature of land for land compensation. In short, the word arable which has immense intensions for an Indian husbandman is losing in the measure.

The definition of public intent was ever been a annoying issue in the history of land acquisitions. The good point about the LARR is that it restricted the range of exigency clause which has been widely misused by province authoritiess. Unlike the LAA measure, LARR restricts it “ to the minimal country required for the defence of India or national security or for any exigencies originating out of natural catastrophes ‘ ( LARR 2011 ) .the measure besides allows land acquisition land acquisition by authorities on behalf of private companies merely if it serves a public intent. This is a pronounced divergence from the LAA, where authorities could get land for private usage provided 70 % of entire country has already been purchased through market. In malice of all these as mentioned earlier about all across-the-board definition of public intent still retains the unfavorable judgment it has been transporting historically.

The measure makes it compulsory for all private purchases through private dialogue to set about R & A ; R if land purchased is over 100 estates in rural countries and 50 estates in urban countries. This raises two issues ( 1 ) the legal power of parliament to do Torahs on the purchased land and ( 2 ) possible circumvention of the R & A ; R commissariats. The ambiguity with respect to parliament arises as the ‘the transportation and disaffection of agricultural land ‘ falls in the province list while power to do Torahs on ‘acquisition and requisition of belongings ‘ is under coincident list. So it extremely depends on the reading of the nature of transportation. The companies besides have many loopholes available to overrule R & A ; R responsibilities through multiple purchases, binami trades etc which is non dealt with earnestly.

Another statement rallied against LARR is that it leads to differential intervention between PSU ‘s and private companies. When land is acquiesced for undertakings like port, main road, power irrigation etc, demand of consent from undertaking affected people is applicable merely to private companies and non PSU ‘s. This is viewed as an anomalousness as it gives undue advantage to a PSU over a private company.

States commitment to industry has ever been a hot subject when it comes to arguments related to land. Analyzing the virtue and demerit of this would be beyond the range of this paper. From resent experience it appears that the province can no longer be viewed as a impersonal party to the struggles originating out of land acquisition by private participants. Policy reforms and administration seems to travel in different waies. Informal tactics, coercion, force etc continues to be a job.

The most canonized characteristic of LARR2011 is doubtless the proviso for SIA. There is understanding on the fact that something is better than nil, the inquiry remains whether that something is powerful plenty to present. Currently a portion of environment impact appraisal, SIA is no more than a formality fulfilled in Indian contexts. Kuntala Lahiri-Dutt and squad who studied land acquisition and eviction by private coal companies in Jharkhand doubts the ability of SIA to present. ‘As compared to other excavation states, where elaborate ethnographic, cultural and societal information on the small town gathered by SIA experts, the SIA subdivisions of Indian EIA ‘s do non offer much more than names of affected small towns and some nose count informations on the socio economic features of affected small towns. ‘[ 8 ]While these jobs have been partially looked into in the LARR, there is a demand for better guidelines. At present most of the determinations refering to SIA and other related affairs has been left to province degree functionaries whose old public presentation leaves much to be desired ( Ram Singh, 2011 ) .

It is rather clear that India can non make off with land acquisition. The demand for land in the way of capitalist enlargement is bound to increase.LARR2011 is a major policy model in malice of its short coming. Its singular going from the ambiguity and inefficiencies of LAA 1894 is undisputed. But the image is non yet clear. Numerous uncertainties rose sing the ability of measure to turn to the broad array of jobs in the Indian context is yet to be seen. Utilitarian prejudice that is prevailing in the present policy paradigm has to be reworked so as do it more efficient and merely.


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