Tuesday, November 3, 2015

26 Need for change and the new LARR Act, 2013. Land Acquisition Acts in India-II.

Jairam Ramesh, the minister in the UPA-2 government who steered the new law, while admitting that such a law is indispensable in the modern world, still says that the way it has been applied over the years has “served to make acquisition a cannibalistic and inhuman process” (Ramesh & Khan, 2015, p.4). It is therefore necessary that we understand the grounds of this indictment and the perceived remedy in the 2013 Act.

Deficiencies perceived in the old LA Act

Ramesh & Khan (op. cit., p.7 et seq.) cites some of these perceived defects in the 1894 law (as amended):
1)      Lack of distinction between acquisition for a State purpose and for a private enterprise (the words “or for a Company” were inserted in Sec.4 by the 1984 amendment). Of course, it was noted above that private companies were included only to the extent that they were undertaking work that is likely to prove useful to the public, but according to the authors, a liberal interpretation led to the opening the “floodgates” (quote from the Parliamentary Committee report, Ramesh & Khan, op. cit.).
2)      Lack of attention to livelihoods and rehabilitation of persons displaced from their land by such compulsory acquisition (Ramesh & Khan, p.9, quoting from a court judgement).
3)        Time lapse from notification to declaration under Sec.6 was reduced from 3 years to 1 year in the 1984 amendment, and award to subsequently issued within 2 years after Sec. 6  (Ramesh & Khan, p.10), failing which the acquisition proposal would be deemed to have lapsed.

The new (LARR) legislation, 2013

The previous government (known as the UPA-2 from the label United Progressive Alliance adopted for the second term of the coalition of parties under the umbrella of the Indian National Congress) was marked by a vigorous championing of rights-based legislation, and therefore the amendment to the Land Acquisition Act also came to be couched in the language of enforceable rights: the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013, which is popularly called the LARR act or bill. Instead of tinkering with or modifying the erstwhile LAA, the LARR act should be seen as a completely different piece of legislation. The important features that make this such a departure from the past are as follows (see Ramesh & Khan, p.11):
1)      It addresses compensation for acquisition of property AND the consequences of displacement, meaning rehabilitation and resettlement for displaced families.
2)      Much reduced discretion to the authorities (Collector etc.).
3)      Fairer compensation.
4)      “Consensual acquisition for a clear public purpose” (ibid.).
5)      An “effective appellate mechanism” (ibid.).

Briefly, the new Act (LARR, 2013) seeks to achieve these by the following mechanisms and institutions:
1)      Rehabilitation and Resettlement (which was entirely lacking in the old LAA) has been mandated strongly: not just for the land losers, but for all others in the locality that would have been pursuing their vocations in myriad ways. One of the ways in which attention is sought to be focused on these issues is the mandated Social Impact Assessments, which contain a long list of matters to be investigated and costed.
2)      District Collectors (no doubt subject to pressure from around and above) had “almost unbridled authority” (op. cit., p.13) to rule on what is a ‘public purpose’, but this has been more narrowly defined now. Similarly there is less discretion on rates of compensation, taking possession, or calling on ‘urgency’ to do away with due process.
3)      Because land purchasers (and sellers!) under-report the consideration in cases of actual transactions,  the “market-value” would capture only a fraction if the authorities went by the recorded and registered land deals. Of course, the Collector cannot avoid doing this; so, recognizing the reality, LARR 2013 provides for compensation at a multiple of the so-called market-value. This formula also “completely removed the discretion of authorities” (ibid.).
4)      There has to be a consent from at least 70% of the “affected families” (in the case of public private partnership projects) to 80% (in the case of acquisition for a private company); interestingly, any such expression of consent is not required “if the Government is acquiring lands for its own, use, hold and control” (sic., op. cit., p.28). The other innovation is that the ‘urgency’ clause restricted to national defense and natural disasters. “The definition of public purpose has been circumscribed” (op. cit., p.12): this is one of the matters that the Social Impact Assessment is supposed to address, “…whether the proposed acquisition serves public purpose” (op. cit., p.16, 17), and the affected persons are expected to contribute decisively to this analysis (p.18). The SIA will be examined by an Expert Group and then decision taken by the authority concerned.

It is not feasible to go into all the details here, but one other facet can be taken up: the understanding of what is a public purpose. Ramesh & Khan (2015) say that it has neither  been defined in the older law, nor have courts chosen to circumscribe it (op. cit., p.23). The resolution of this was to reference a circular of the Finance Ministry (dated 27 March 2012) which had “laid out what in the eyes of the Government constituted ‘infrastructure’ “ (p.24). The outcome is a long list (Ramesh & Khan, p.25-26) covering items like national defence and security, infrastructure, agriculture, industry, and so on. The question really then becomes, what is not included in the list that should have found a place. Keen analysts will no doubt be able to  suggest items, but it appears on a cursory look that the one significant subject that is omitted would be the environment and biodiversity conservation. Perhaps it was felt that private land would not need to b acquired for these (belying the US experience, for one), or that they were well served by other laws like the Environmental Protection Act, Indian Forest Act, Wildlife Preservation Act, and the Forest Conservation Act.

The other important subject is that of Rehabilitation and Resettlement, R&R. There are already examples of national and state-level R&R policies or laws, as well as sector-level policies and practices followed by concerned industries like Coal India Ltd or the NTPC (Ramesh & Khan, p.63), and the best practices have reportedly been put together in the LARR act, and these components would be especially important for those who were not the primary landowners but whose livelihoods would be affected. The R&R part of the law is sought to be made effective by requiring its completion before possession is taken by the acquiring agency.

Another point to be noted is the clauses concerning retrospective application of LARR 2013: cases where final award had already been made under LAA 1894 would not be reopened, but in other cases where proceedings were still on would have to be completed under the new act, as would cases where a majority of persons had not yet received or accepted the compensation under LAA 1894. But it was also recognised that provision would have to be made for action taken under certain other laws; such laws would be exempted from the onerous conditions of LARR 2013, “at least for the time being” (op. cit., p.121). There is a baker’s dozen of such exempted laws listed in Schedule IV of the act, including the Atomic Energy Act 1962 and the Coal Bearing Areas Acquisition & Development Act 1957. However, it is required that all these acts would also be brought in consonance with LARR 2013 in respect of compensation and R&R within a year, that is by 31 December 2014. This was sought to be done, ironically enough, by the Amendment Bill 2014, which was issued as an Ordnance by the present NDA government. (To be taken up in the next post)


Ramesh, Jairam and Muhammad Ali Khan. 2015. Legislating for Justice. The Making of the 2013 Land Acquisition Law. Oxford University Press, New Delhi.

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