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LANDFALL

Despite being a vastly improved piece of legislation, the land acquisition and resettlement and rehabilitation bill 2012, which seeks to replace the Land Acquisition Act, 1894, will continue to be controversial. True, the government can exercise its powers of eminent domain in acquiring land even against the owner’s consent for a public purpose, but the process has to be fair to all concerned or impacted. The rural development minister, Jairam Ramesh, whose ministry cleared the bill, is expected to introduce 153 amendments to the version cleared by the Union cabinet on December 13, once the new legislation is introduced for discussion and passage in the winter session of Parliament.

The long overdue LARR bill is intended to settle three important issues — ensuring that land acquisition would not be forced, that adequate compensation would be paid to those who ‘lost’ their land in the acquisition process, and that those who depended on the land for their livelihoods but had no title to it would be given jobs or annuity payments as recompense. The LARR bill requires the consent of 80 per cent of the owners of the land to be acquired for private projects, and of 70 per cent of the owners if the land is used for a public-private partnership project. The cabinet restored the 80 per cent requirement, which originally had been set at 67 per cent. The bill sets the compensation to be paid at twice the rate for urban land, and 4 to 6 times the value of land in rural areas. Companies that acquired the land for their projects would have to provide jobs for those families who depended on the land for their livelihood.

While industry and the corporate sector — many firms had delayed projects in anticipation of the passage of the bill — have welcomed the introduction of the legislation, they are unhappy about what they consider a few key provisions. For one thing, getting the consent of 80 per cent of the landowners can be a time-consuming process, and could push up project costs high enough to make the project itself financially unviable. Second, in the absence of a real land market, the imposition of a value by the bill seems arbitrary. As a corollary, the resulting land price escalation would hit small enterprises harder than it would the big companies. Real estate developers in urban India say that in combination with the 80 per cent ownership consent requirement, land prices could escalate and put the dream of owning a home beyond the reach of most people. The requirement of providing alternative livelihoods that would require additional investment is, however, acceptable to most of corporate India. But the biggest concern for many is the lack of clarity of what constitutes ‘public purpose’. The phrase from the Land Acquisition Act of 1894 has been retained, but left undefined. Possession may be nine-tenths of the law, but that may not be enough.