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Land Acquisition Bill: Discuss the Pros and Cons.

Land acquisition in India is currently governed by The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which came into force from 1 January 2014. Till 2013, land acquisition in India was governed by Land Acquisition Act of 1894 i.e The bill replaces the British-era Land Acquisition Act of 1894 and provides for land acquisition as well as rehabilitation and resettlement.

Land acquisition refers to the process where a government acquires land from land owners for any purpose. Generally, the purpose is related to development projects conducted either by PSUs (Public Sector units) or the private sector prior to the passage of this Bill

Pros and Cons of the bill with reference to recent debates:
Pros:

  1. The existing Act kept 13 most frequently used acts for Land Acquisition for Central Government Projects out of the purview. These acts are applicable for national highways, metro rail, atomic energy projects, electricity related projects, etc. The present amendments bring all those exempted from the 13 acts under the purview of this Act for the purpose of compensation, rehabilitation and resettlement. Therefore, the amendment benefits farmers and affected families.
  2. The proposed changes in the Land Acquisition Act would allow a fast track process for defense and defense production, rural infrastructure including electrification, affordable housing, industrial corridors and infrastructure projects including projects taken up under Public Private Partnership mode where ownership of the land continues to be vested with the government.
  3. As per the changes brought in the Ordinance, multi-crop irrigated land can also be acquired for purposes like national security, defense, rural infrastructure including electrification, industrial corridors and building social infrastructure.
Cons:
  1. The original Land Acquisition Act, 2013 had a consent clause for acquiring land – industrial corridors, Public Private Partnership projects, rural infrastructure, affordable housing and defense. But after the central government changed, it exempted these five categories from the rule of acquitting land in the Bill tabled on February 24.
  2. Social assessment which was mandatory before acquitting land has also been exempted in the Bill tabled in the Lok Sabha.
  3. As per the existing law, land will be given back to the farmer if it remains unused for five years. The proposed amendment says the land will be returned only if the specified project on the land fails to complete the deadline.
  4. Bureaucrats will be punished if found guilty of violating any clause of the existing Land Act. However, the new clause makes government sanction necessary to prosecute civil servants.

The Land Acquisition Amendment Act, 2015 is currently creating a lot of hassle in Parliament with the Lok Sabha session being adjourned for the same on February 24. With both opposition and ruling parties equally holding their leashes tight on the Land Bill, only time will tell if the amendments in the Land Acquisition Act will be passed or not and whether they will be truly beneficial.

The main benefit of the Land Acquisition bill is that it ensures equity and fair dealing with farmers. Clear guidelines on the process of acquiring land and rules for compensation packages will ensure that the process of land acquisition is clear. However, the bill has negative consequences for industry. First, market prices of land have already been rising. By providing a compensation package that is a multiple of the current market price, the bill can raise the cost of land acquisition significantly, increasing the overall cost of a project. In some cases, this could make the overall project unviable and hurt apex. Second, rising land costs will have an overall inflationary impact on the economy. Third, the bill will elongate the process of land acquisition.

Overall, the challenge with the land bill is to balance the benefit to farmers with the cost to industry. However, if companies defer their apex plans due to the steep rise in land costs, then transactions may fall and the supposed gains to farmers may be minimal. From a macro perspective, the Land Bill is a negative for the private sector, as it increases land costs significantly and extends the acquisition process.

Bunny P