Sunday, November 8, 2015

29 Operationalising LARR 2013. Land Acquisition Acts in India-V.

We conclude with a brief comment on the practical aspects of the LARR Act 2013, and the options open before the NDA government and the development protagonists who feel that the requirements are so onerous as to effectively put a stop to any new projects.

The underlying philosophy of LARR 2013 is that the state and the acquirer of private property has a moral obligation to look after the affected persons and communities in the long term, and this has now been made a legal obligation as well. Previously, acquisition was seen as a one-time operation, and once the compensation had been awarded through the due process, good or bad, the transaction was considered a closed deal, and no further obligations resided on the government’s side. The drafters of LARR 2013 apparently felt that the State has a much wider responsibility in ensuring that the project did not leave the affected persons worse off in the long term. In this sense, we may characterize LARR 2013 as a legal form of the strong egalitarian criterion in welfare economics, where a proposed public project is to be passed only if it can generate sufficient surpluses to not only compensate the losers fully in principle, but also has the obligation to effect this in practice. Welfare economics offers a choice of measures to arrive at a just valuation, such as the different consumers’ surplus concepts, and the willingness to pay (to obtain benefits or to avoid losses), and willingness to accept (compensation for losses or forgone opportunities) concepts.

One of the weaknesses of the LARR edifice my well be the absence of a dedicated cadre to carry out the onerous obligations it casts on the administration, starting from the social impact assessment (SIA), and including the subsequent R&R etc. The SIA itself could be made to say anything, as it will require the investigator to draw up scenarios or predictions of what will happen with and without the project. This will be likely to be based on personal assumptions rather than any dependable models. The implementation of the R&R plans would, as already mentioned, be weak in the absence of a dedicated cadre on the ground (a weakness shared with the FRA 2006).

What does LARR 2013 portend in practical terms? Because of the increased number and complexity of processes and the many stages at which public confrontation between project proponents and the public is envisaged, it is likely that acquisition proceedings on the whole will be more protracted, will cost more, and will be more contested and fractious. This may force project proponents, especially in the joint and private sectors, to think twice before embarking on such ventures. This will probably put much more demands on the public sector undertakings and government departments to take up development projects, with private firms receding to the background as service providers rather than proponents. To some extent, this will take us back to the pre-liberalisation days, with its drawbacks of lesser choice of products, perhaps poorer quality of finish and packaging, poorer responsiveness to customer feedback, and perhaps not quite up-to-date technology, but the benefits would be in the provision of a minimum level of services to the public at lower prices than the private sector is wont to charge.

A more serious effect of the LARR 2013 may be the withdrawal of the public sector machinery itself from the sphere of development projects. This is because of the greater personal responsibility of officials up and down the line for the implementation of all the stages and the safeguards. Previously, public servants and government officials were shielded to a large extent by the immunity clause from prosecution for acts done in the course of duty, and the requirement of government sanction for any such prosecution. That immunity now seems to have been withdrawn, partly by court judgements that the government officer no longer has the status of a public servant after retirement, so that government sanction is no longer needed for prosecution; and partly by new laws like the LARR 2013 that make the public official primarily responsible for fulfilling the expectations of the public in respect of the rights conferred by the UPA’s rights-based legislation (Right to Information, Right to Food, Recognition of Forest Rights, Right to Education, Right to Services, Right to Employment, and now the right to fair compensation and R&R under the LARR 2013). The NDA amendment (ordnance) did make it necessary to obtain government permission for prosecution of officials, but this has been vehemently opposed as a dilution of the act (Ramesh & Khan, p.127).

The fact is that the government machinery is likely to simply not be in a position to provide the type of continuing support to livelihoods and to R&R envisaged in the LARR (and before that, in the R&R policy declarations of various government and entities). In fact Sanjoy Chakravorty, who has written a definitive book on the subject (2013), goes so far as to characterize this act as “ unworkable” (Chakravorty, 2015). If the government could achieve all the welfare measures contemplated for all the ‘affected persons’ in addition to the ‘oustees’ of development projects, this could as well have been achieved through all these decades of developmental spending in independent India. The fact is that people do not become better-off directly by such spending, and the R&R efforts will be sure to fall behind targets, and projects will get bogged down endlessly in litigation and counter-charges. So probably the immunity granted as a matter of form to the individual government employee will have to be restored for ‘laches’ or failure to ensure enjoyment of rights by the people. While the enthusiasm and idealistic intents  of the law-drafters like Ramesh and Khan can be lauded, in practical terms these rights are more aspirational than realistic, and to hold individual bureaucrats responsible for their non-fulfilment would appear to be too drastic and may even be counter-productive. Too much scape-goating by watchdog authorities has a dampening effect on the sense of initiative and risk-taking by the average bureaucrat.

A basic weakness in the legal morality of LARR is the acquiescence to the general practice of under-reporting land values, and therefore setting compensation rates at multiples of these bogus reported market-value. This will make every District Collector a party to what is strictly a criminal act of misleading or even cheating the state. If and when people start reporting values closer to the actual money exchanged (perhaps because transactions are being watched and tracked more closely through information technology), acquisition will become prohibitively costly, and moreover may attract adverse comments from audit, and even criminal proceedings against the officials complicit in such actions.  The government departments will, therefore, tend to avoid running after such wild geese, and will prefer to work within the resources that they have already garnered in the past, and hesitate to venture into new expansions.

One positive side-effect of LARR 2013 may be that leaders of development sectors and individual firms decide to use their existing resources  much more efficiently. Scores of examples could be envisaged, and we proffer just a few here. Urban developers, for instance, will find ways of squeezing in more habitation or office units onto a smaller extent of land, by growing vertically rather than spreading horizontally. Many companies may be having excessive land holdings (especially public sector giants and old private companies in sunset sectors), and will surely minimize their requirements of fresh acquired land in future. While community consent may not apply to government projects, the R&R and compensation process requirements would be a disincentive to ask for too much land, especially if there is some leeway in design to enable the project to scrape in under the threshold limits for various requirements that will be fixed by LA Rules or by state governments. One example that comes to mind is the huge campuses required by ministry guidelines to set up central universities, which are difficult to administer and look after, and are immensely inconvenient for their primary clients, the students, who have to walk up and down a few kilometres to get from one office to another. They will probably press the education policy-makers to settle for smaller campuses in future.

A not so happy side-effect may be increased pressure for providing government wastes and forest land, subject to the seemingly lesser costs of compensating only for community uses like fuelwood or grazing, but this will be bad for forest and wildlife conservation.

 Another aspect is that the new types of rights-based legislation, exemplified by LARR 2013, will call for much more detailed operations manuals with copious notes, legal opinions and flow charts to guide the public official as well as the non-official professionals who may be involved as members of expert groups, as assessors and evaluators, and so on. Since each of their actions and decisions will be up for public scrutiny as well as, inevitably, judicial review in a large number of cases, these professionals will have to be very clear about the procedures, methodologies, standards, and so on they are expected to follow and uphold. Their actions and laches may well subject them to not just being over-ruled by higher authorities, but also being hauled up for criminal liability or negligence for failure to do due diligence and so on. As the sphere of action and discretion of the public official shrinks, we may expect a corresponding expansion of the role of the expert bodies and the quasi-judicial authorities and appellate bodies, and of course of the higher courts, as has happened in the forestry sector. The net result of all this is likely to be an evolution of Indian polity to a much more contested, litigious and adversarial form, which seems to be an emulation by the intellectual class of the fashion of “adversarial legalism” in the USA (Fukuyama, 2014, p.473) and generally in the liberal democracies of the west. The difference, of course, would be that in those countries, the state developed before full democracy, so that people are much more conscious of their responsibilities as citizens,  and hence the high costs of transparency and egalitarian decision modes can be absorbed without crippling damage to the fundamental capability of the state. In third world democracies like India, however, democracy seems to have come before strong state formation, so that these niceties and sophistications of liberal western democracy sit like an uneasy veneer over decidedly inegalitarian and illiberal modes of social functioning.

A final consideration we would like to place before the disgruntled industrial sector is that the LARR 2013 probably calls for a basic change in their approach to resource garnering. What galls the dispossessed landholders, especially in hitherto predominantly agrarian tracts, is the windfall gains that the ‘city slicker’ is able to make on their backs. Even tribal communities, who have repeatedly lost possession of their hard-won land holdings for trivial debts incurred to preserve their social prestige and honour in the community, resent their regression to the  role of landless labour in their own homelands (see, for instance, Fuerer-Haimendorf,1979). On the other hand, stories are told every day in cities like Delhi, of how the lowest staff in the city’s offices were beneficiaries of the land boom in the capital region; they come to work in menial positions in their battered Maruti cars from their villages round and about Delhi, to pass the day, but they are actually sitting on crores of rupees of bank deposits after selling their land for property development. True or not, these anecdotes suggest that development proponents, who need land, can think of including rural landowners in some sort of (sleeping!) partnership.

Suggestions that this is feasible are seen in the new Andhra Pradesh government’s ‘pooling’ approach to township building (for instance, see the report in the Economic Times by Sukumar and Kesireddy, 2015). The original landowners will at least have a claim on part of the huge capital gains that will accrue when the developed land is sold on in the distant future, just like any retail shareholder. There may even come a time when the rural landholders themselves may develop aspirations to use their resources jointly for different types of development, designed after their own predilections and their own styles.

The question of the landless project-affected persons will remain, but here also some stake, some realistic hope in a better future at least for the younger generation, would have to be built, along with plans and buildings for the factory or township. It is possible, in this view, that private entrepreneurs will rapidly realize that there are no more windfall gains to be made from acquired land alone, and will come round to this partnership mode of thinking once the unavoidable reality of LARR 2013 and the new rights-based approach pioneered by the UPA sinks in.


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