Land and Livelihood: Debating the Land Acquisition Law

By: Chinmoyee Mallik
The New Land Act of 2013 was meant to remove the historic injustice perpetrated on land owners and sought to incorporate those dependent on agricultural land for livelihood. However, proposed amendments to the New Act will undermine its major clauses, and fail to achieve the purpose it was aimed for.

Rural livelihoods, whether farm or non-farm, are intricately linked to land, particularly in the developing world. In the global south, specifically in India, land is an emblem of social status and security of households in addition to being a prominent source of livelihood and poverty-arresting ingredient (Robin Mearns, 1999, ‘Access to land in rural India: Policy issues and options’, World Bank Policy Research Working Paper No. 2123). So, dispossession of land, which is central to rural livelihood, has a far more entrenched implication than a simple loss of means of production.

But land is also one of the most important inputs of economic development. Thus, there is considerable contention over issues of land acquisition and there is also significant opportunity cost attached to its conversion to other land uses in land scarce economies. When this transfer is from cultivable land or other common land or forests, which have livelihood implications, the issue is extremely complex and demands close deliberation.


Land Acquisition and its Legal Implications

Until recently, land acquisition in India followed the provisions of the Land Acquisition Act of 1894 which had been enacted by the British colonial power to seize private property. Although this Act was amended several times by state governments, the amendments pertained to the elaboration of compensation issues and never addressed the ambiguities within.

The new land acquisition act that came into force on January 1, 2014 referred to as ‘The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013’ (henceforth referred to as the New Act) is a step forward in sensitively addressing some of the earlier concerns. However, the New Act was dubbed as “anti-industry and anti-development”, by industrialists, as reported by the Hindu Business Line, June 27, 2014. Hence, the pro-liberalization present government is currently bent upon making the land acquisition law “an enabler rather than a stifler”, as opined in The Hindu, in a piece titled ‘Land acquisition will be made easier’, on December 7, 2014, and has promised a virtual roll back of the New Act.

The pertinent question, therefore, concerns the efficacy of the 1894 Act and the implications of the New Act and its provisions in dealing with livelihoods and dispossessed agricultural populations. In this perspective, one would need to examine the proposed amendments to the New Act using insights from various case studies.


Land Acquisition Law: Key Concerns Regarding the 1894 and 2013 Act

The most significant provision of the 1894 land law pertains to the doctrine of eminent domain and the definition of public purpose by which the Government is empowered to take over any private land or property by declaring that there is a public purpose in it. This statute is virtually not challengeable and confers supreme authority to the state to acquire land, leaving the property owner a helpless victim.

A related issue centres around the ambiguous definition of ‘public purpose’, which has been imparted considerable interpretive liberty and emerged as draconian. Till date, these two components of the land acquisition law have successfully impoverished a large section of the farming community and those dependent upon land-based livelihoods.

This definition has undergone several modifications, the most far reaching being in 1962 and in 1984 which allowed for acquisition of land for private enterprise (in addition to State enterprise) provided a ‘public purpose’ had been proclaimed. The New Act has further widened the scope of ‘public purpose’ by incorporating land acquisition by the government for public-private-partnership (PPP) projects which has furthered avenues for the private sector to have easy access to land, including prime agricultural land.

The second contentious issue of the 1894 land law stems from the provision of government acquisition for private company/PPP project. This provision, set against a ‘public purpose’ links it with the seemingly benevolent objectives of the private sector, such as employment generation and gross domestic product (GDP) growth and very deftly overlooks the overt profit maximisation strategies of the private agent and makes land cheaply available.

Reasons commonly cited in favour of this mechanism centre around the problems of fragmented land holdings, pending extended litigations over land ownerships, poorly maintained land records and potential for encouraging land sharks and brokers that would put the poor and vulnerable at a disadvantageous position and delay the onset of projects. The New Act has incorporated three major elements: (i) compulsory consent of stakeholders ratifying the acquisition (70-80 per cent), (ii) comprehensive coverage by rehabilitation and resettlement (R&R) even in cases of acquisition by/for private companies, and (iii) mandatory social impact assessment and its evaluation by an independent agency for sanctioning any project. The third key issue of the 1894 Act relates to compensation. It traditionally harps on the principle of ‘money for land’ and is computed on the basis of prevailing market prices in the area for the past three years plus a solatium of 30 per cent. The New Act continues to harp upon the market value principle of compensation notwithstanding criticisms that emphasise the inherent problems of undervaluation of land transaction records, scanty land transaction history in the Indian context in addition to largely distress sale of land at extremely depressed prices. However, the new inclusions show (i) scope of negotiating land prices in case of a private company, (ii) multiplier for market value to be determined by the State and a separate multiplier based on rural/urban location, (iii) a solatium amount of 100 per cent, and (iv) strict time lines for disbursement of compensation. Another element of compensation in the 1894 Act is the ‘property-based compensation principle’ that overlooked the labourers and dependents on common lands. The revised definition of ‘affected families’ in the New Act includes ‘livelihood losers’, additional compensation for multiple displacement, extensive R&R package in the form of employment guarantees, annuities, company shares, land-for-land, share of appreciated land value after resale, and replacement of lost homestead. All this in the New Act indeed marks a step forward.

The New Act reflected the government’s determination to address “widespread and historical injustices”, as suggested by The Hindu, on August 29, 2013 in its report ‘Lok Sabha passess Land bill with 216 ayes’. The provisions laid down in the New Act have addressed most concerns barring a few. Most states, as also the Ministry of Rural Development, have pressed for amending the law as it has made acquisition of land extremely stringent. The Central Government is therefore keen on amending the New Act diluting some crucial provisions which will ultimately mean a “huge step backwards”, as opined by the Economic and Political Weekly Editorial of October 18, 2014.

Acknowledgement: This paper is greatly benefitted by the comments received from Prof S Sen, Associate Professor, Jawaharlal Nehru University, New Delhi.

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