The New land Acquisition (amendment) Bill Proposed. An analysis of the proposed changes and the current position of the bill in the context of the Indian economy. Good morning everyone. The topic on which I am going to make a presentation is the one which has brought the Indian politics into a standstill. On one side is the determination of the Modi government in taking the most important step for increasing the “ease of doing business”. And on the other side is the united opposition, parties as varied from the JD(U) to the left, from Congress and even Shiv Sena, who will not let the bill pass in the Rajya Sabha at any cost, their contention being that it is ANTI_FARMER.
But politics aside, as CA students and professionals, it is vital for us to understand matters which affect the economy as a whole, also called “macro factors”, and have our own opinion of them. Chartered Accountants are given the prestigious title of “Partners in Nation Building”, and to stand true to it, we must have both knowledge and influence over matters that affect our nation.
In this presentation, I am going to explain the topic very precisely, but one rule must be followed. We will have to remove any of the political leanings that we might have and be objective in our analysis, in order to reach a “True and Fair” opinion.
In order to grasp the context in which the new land acquisition bill is brought, it is imperative that we know its background.
We must understand that ‘land acquisition’ is different from ‘land purchasing’. While a purchase can only be made if a person is willing to sell, land acquisition involves no consent. It can be imagined as the government acquiring huge chunks of land forcefully while displacing thousands of people.
The power to take property is rooted in the “Doctrine of Eminent Domain”. This doctrine states that the govt. can do anything, if the act of the govt. involves public interest. Thus, hereunder, the govt. can acquire private land, provided the ‘public interest’ involved can be demonstrated beyond doubt.
Also, the Constitution in Article 19 states that-“All citizens have the right to acquire, hold and dispose off property”. And on the other hand, Article 31 states-“No person shall be deprived of his property, EXCEPT BY AUTHORITY OF LAW”.
Hence we realize that the Right to Property is subject to some exceptions and is not a fundamental right. And this is indeed a bit DICTATORIAL in nature, and this was what the previous UPA govt. tried to tackle.
The act of 2013
The UPA had in 2013 passed a new act for land acquisition in India, replacing the age old act of 1894. The act’s name was – “The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013”, shortly known as RTFCTLARRA, 2013. Yeah you can laugh…..
The salient features of this act were radical, and if you are not aware, then you will find them astonishing. I will try to summarize here its 4 most important provisions:-
Compensation to land owners was to be provided equal to 4 times the market value of the land in rural areas and 2 times the value of the land in urban areas.
Prior consent of land owners must be obtained.
- If land is acquired for a PPP project (public-private partnership), consent of 70% of land owners is mandatory.
If land is acquired for a private project, consent of 80% of land owners must be obtained.
SOCIAL IMPACT ASSESSMENT. For each acquisition, the state government would appoint an ‘expert group’ that would do an assessment to analyze the potential affect of land acquisition on lives of people, their economic conditions, transport, housing and other things. Here it will be found out that who are those persons, who are not land owners, but are directly dependent in the land being acquired, example farm laborers. Such people are called “livelihood losers” and they will also get compensation.
In case of land which is super fertile and multiple crops are grown in it, it will be termed as “multi-cropped land” , and in a district, not more than 5% of such multi-cropped land can be acquired.
So, this much needed new act did solve many of the problems such as giving adequate compensation and proper rehabilitation and resettlement of the displaced. Moreover, the Act was passed after all party consultations, and even the BJP had supported it.
And yet….., there were many problems
According to NC Saxena, a former member of the National Advisory Committee, the 2013 UPA Act was both anti-industry and anti-farmer due to the fact that it was TOO RIGOROUS.
It was also observed that almost every other state governments expressed their reservations regarding the act.
- Haryana & Kerela wanted to reduce the percentage of consent under the consent clause to 50%
- Assam & Himachal Pradesh felt that the definition of ‘affected family’ was too broad
- Maharashtra, Manipur & Karnataka demanded that Social Impact Assessment be restricted to large projects only.
Industry was against the law. Real estate developers feared that the cost of projects would rise by 300 to 400% due to the compensation provisions.
So the overall atmosphere was that of confusion and response was mixed.
The New Land Acquisition Bill
Today, when the NDA government is in power, it has decided to make major changes to the Act. The Modi govt. has brought a bill to make various amendments to the act, and that bill is referred to as the “New land acquisition Bill” and that is what the topic is all about.
Though the bill has not been passed in the parliament, the government has enforced its provisions by bringing an ordinance. And any of you who watch news channels even a bit would have an idea that how strongly this new bill is being protested and how tense the situation is.
The congress has united all opposition with it and is saying that anybody who is pro-farmer should oppose this bill.
But what is it in the new bill that has caused so much unrest? What are the amendments proposed to be made? What motivated Mr. Rahul Gandhi to term the government as a “Suit Boot Ki Sarkar”?
In this new land acquisition bill, there were only a few amendments. I am going to state them one by one.
AMENDMENT NUMBER 1
The government is empowered to exempt 4 categories of projects from the provisions of:
- The consent clause
- The social impact assessment clause
- The restriction on multi cropped land clause
The 4 categories are –
- Such projects vital to national security and defense of India and every part thereof, including preparation for defense or defense production
- Rural infrastructure including electrification
- Affordable housing and housing for the poor
- Industrial corridors set up by the government
AMENDMENT NUMBER 2
Private hospitals and private educational institutions have been included in the list f “infrastructure projects”, thus exempting them too.
AMENDMENT NUMBER 3
The old law stated that land will be returned to the original owner if it is not used for 5 years. The amendment scraps this 5 year limit. The idea of returning land makes no sense and is unimplementable in practice. So the amendment tries to end this nonsense.
AMENDMENT NUMBER 4
Government sanction will be required to prosecute civil servants under this act.
AMENDMENT NUMBER 5
13 other land acquisition acts, which were so far excluded, are now clubbed into this act. Earlier, if land was acquired under “The Railways Act”, “The Atomic Energy Act”, or 11 other such acts, then the benefits under this act would not be given. Now by this amendment, all the other acts have been sort of abolished.
This is all. But actually, all the fighting is for amendment no. 1. Lets us understand the arguments of both sides.
The BJP’s argument is that the 3 requirements of consent clause, social impact assessment and restriction on multi cropped land causes delays and makes it tough to acquire land.
- Gathering consent and carrying out social impact assessment are very time consuming and costly
- Limits on multi cropped land is also very restrictive
So basically, the BJP says that where land is acquired for the 4 areas of national importance, the process would be easier and faster if the stated requirements are exempted.
But the opposition’s argument is equally strong. They say that the 4 special areas; namely defense, infrastructure, industrial corridors and affordable housing, are so broad, that the government would be able to fit almost every acquisition under one of those 4 and thus escape from the basic requirements of the act every time. The opposition also questions why the government brought an ordinance without even consulting them. This shows the government’s dictatorial tendencies which have no place in a democracy.
It’s hard to decide who is right and who is wrong as there can be no strait jacket solution in this case.
But are our politicians fighting for the betterment of India? I doubt it.
India’s problem is that too many people are dependent on low income jobs in agriculture, while land is scarce for setting up industries. It is a structural problem and the only solution is to reduce the number of people dependent on agriculture by creating more and more jobs in the manufacturing sector. And making land easily available for infrastructure and housing will create new jobs.
But the land act of the UPA only made land acquisition tougher. It has been estimated that acquiring a large piece of land under the UPA Act may take 4-5 years, time enough to make any project unviable as all assumptions of cost and profit become invalid. If land acquisition becomes tougher, middlemen and landlords will benefit from the resultant scarcity of land.
On the other hand, the proposal of removing consent clause even for only 4 areas is quite questionable. In o democratic society, it is the duty of the government to obtain consent before acquiring land, even if it requires a lot of time and money. The idea that land can be snatched off without consent, however high the compensation may be, is against the fundamental principles of democracy.
The government initially issued an ordinance to give effect to the amendments, but an ordinance becomes ineffective after a certain period of time if it is not approved by the parliament. The BJP has been successful in passing the bill in Lok Sabha, where it has a fair majority, but the bill has not been passed in the Rajya Sabha, where the NDA is in a hopeless minority. Though the government has the option to call a joint session of the parliament to pass the bill where it will have a good chance of success, it has not exercised this option so far.
Even after hundreds of hours of news debates and expert opinions and clashes and protests, our political parties have been unable to reach to an agreement. Neither Congress nor BJP is ready to relent, while the issue of land acquisition hangs in the middle.
I would end this presentation by saying this – “While it cannot be allowed that the poor farmer be robbed off his land without his consent, but it also cannot be anyone’s case that acquisition of land becomes so tough that it is impossible to set up new industries.”
The need of the hour is to strike the right balance between agriculture and industry, respecting the rights of both the cultivator of the land and the entrepreneur. And this is the responsibility of all the representatives of the people as well as the intellectuals of this nation, so as to create another milestone of cooperation and development in Indian history.
Prepared By Prakhar Jain