Land Acquisition Act

Land Acquisition Policy in India

By: Staff Reporter
The Right to Fair Compensation and Transparency LARR Act introduced a mandatory social impact assessment to correct the historical injustices. The ordinance by the current government overturns this clause.

There was no major land acquisition in India for industry or infrastructural development during the British Rule except for building public utilities. However, the first Act to regulate land acquisition in India was brought by the British some 120 years ago. Termed the Land Acquisition Act, 1894, it governed all land acquisitions by the subsequent governments of independent India until recent times.

As per the Land Acquisition Act, 1894, the government can forcefully acquire any private land for public purpose.  The 1894 Act did not provide for rehabilitation and resettlement (R&R) for those affected by land acquisition, nor for any fair compensation. Hence, a National Rehabilitation and Resettlement Policy, 2007 was introduced in keeping with the high prices of land, which had, by then, become a scarce commodity. The same year, 2007, saw two Bills introduced in the Lok Sabha: one to amend the Land Acquisition Act, 1894, and the other to provide statutory status to the R&R policy of 2007. But, these Bills lapsed with the dissolution of the 14th Lok Sabha in 2009.

In May 2011, the National Advisory Council recommended combining the provisions of land acquisition and R&R within a single Bill. Subsequently in July 2011, the Draft Land Acquisition and Rehabilitation and Resettlement Bill was introduced by the Ministry of Rural Development, inviting public comments. In September 2011, the government introduced the Land Acquisition and Rehabilitation and Resettlement Bill, 2011 in the Lok Sabha with a view to replace the 1894 Act. The Bill named ‘The Right to Fair Compensation and Transparency in Land Acquisition,Rehabilitation and Resettlement’ (RFCTLARR) was passed on August 29, 2013 in the Lok Sabha and on September 4, 2013 in Rajya Sabha. The Bill received the assent of the President of India, Pranab Mukherjee on September 27, 2013, and became an Act, to come into force on January 1, 2014.

Land Acquisition | Highlights of the 2013 Bill

The Bill provides for land acquisition as well as rehabilitation and resettlement. It replaces the Land Acquisition Act, 1894.

  • The process for land acquisition involves a social impact assessment survey (SIA), preliminary notification stating the intent for acquisition, a declaration of acquisition, and compensation to be handed over within a certain time. All acquisitions require rehabilitation and resettlement to be provided to the people affected by the acquisition.
  • A Land Acquisition and Rehabilitation and Resettlement Authority shall be established for settling any disputes relating to the process of acquisition, compensation, and R&R (Box 1).
  • There shall be no change of ownership of acquired land without prior permission from the government. Land may not be used for any purpose other than for which it is acquired.
  • The government may temporarily occupy and use any piece of waste or arable land for a public purpose. This occupation may be for a period of not more than three years.
  • Compensation for the owners of the acquired land shall be four times the market value in case of rural areas and twice in case of urban areas. The compensation for the land acquired shall be based on the (a) the minimum land value, specified in the Indian Stamp Act, 1899 for the registration of sale deeds; and (b) the average sale price of the higher priced 50 per cent of all sale deeds registered in the previous 3 years for similar type of land situated in the vicinity. The value of the assets (trees, plants, buildings etc.) attached to the land being acquired will be added to this amount.
  • In case of acquisition of land for use by private companies or public private partnerships (PPP), ‘consent’ of 80 per cent of the displaced people is required. Purchase of large pieces of land by private companies will require provision of rehabilitation and resettlement.
  • The provisions of this Bill shall not apply to acquisitions under 16 existing legislations including the Special Economic Zones Act, 2005, the Atomic Energy Act, 1962, the Railways Act, 1989, etc.
  • The provisions of the Bill relating to land acquisition,rehabilitation and resettlement is applicable in cases when the appropriate government acquires land, (a) for its own use and control, (b) to transfer it for the use of private companies for public purpose, and (c) on the request of private companies for immediate use for public purpose.
  • The Bill proposes that private companies shall provide for rehabilitation and resettlement if they purchase or acquire land, through private negotiations, equal to or more than 100 acres in rural areas and 50 acres in urban areas.
  • The term ‘public purpose’ in the Bill includes provision of land for, (a) strategic defence purposes and national security, (b) roads, railways, highways, and ports, built by government and public sector enterprises (c) project affected people, (d) planned development or improvement of villages, and (e) residential purposes for the poor and landless. Public purpose includes other government projects which benefit the public as well as provision of public goods and services by private companies or public private partnerships; these require the consent of 80 per cent of project affected people. Affected families include those whose livelihood may be affected due to the acquisition, and includes landless labourers and artisans.
  • A maximum of five per cent of irrigated multi-cropped land may be acquired in a district, with certain conditions.
  • Every acquisition requires a SIA by an independent body followed by a preliminary notification and a final award by the district collector.
  • In the case of urgency, the Bill proposes that the appropriate government shall acquire the land after 30 days from the date of the issue of the notification (without SIA). This clause may be used only for defence, national security, and conditions arising out of a national calamity.
  • The Bill proposes the following authorities; administrator; commissioner for rehabilitation and resettlement; rehabilitation and resettlement committee (for acquisition of 100 acres or more of land); national monitoring committee for rehabilitation and resettlement; and land acquisition, rehabilitation and resettlement authority.
  • If an acquired land which is transferred to a person for a consideration, is left unutilised for a period of 10 years from the date acquired, it shall be returned to the land bank or the appropriate government.
  • In cases where the ownership of an acquired land is sold to any person, without any development made, 20 per cent of the profit made shall be shared among the persons from whom the land was acquired.


With a view to relax the mandatory ‘consent’ clause and the SIA the current government introduced a Bill in Rajya Sabha during the 2014 winter session of Parliament. Since the Bill could not be taken up for discussion during the Session, the Government promulgated an Ordinance (Box 2) titled ‘The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance’, 2014 during the last week of December 2014.

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