The Land Acquisition Amendments Don’t Change Much

All the noise surrounding the amendments on the land acquisition law appears to be a clear case of making a mountain out of a molehill.

The first myth that needs to be dispelled regarding the proposed amendments to Land Acquisition Act of 2013 is that they are being introduced under pressure from the Industry.

If one were to look at the primary objections from FICCI in its press release of July 2014 it is the compensation terms under the Act which seem to worry their members the most. The Director General of CII, in an article in the Businessline, says the compensation packages under the Act “would make industrial projects financially unviable and could deplete the competitiveness of Indian industry”. Yet the present ordinance does not touch any of the provisions relating to compensation and relief and rehabilitation under the Act. The provisions sought to be amended under the ordinance only relate to certain regulatory prerequisites under the Act which were matters of concern not just for the Industry but a cross-section of bodies representing public interest.

One of the first recommendations to to tweak the Act in this regard came to the present Central Government from none other than the Planning Commission. State organs like the Department of Industrial Policy and Promotion wrote to the Government stating that “acquiring land for projects such as roads, railways and ports have come to halt since the new Land Acquisition Act was implemented” and called for exempting Government projects from the provisions the Act.

Experts like a former member of the UPA’s favorite NAC, Mr.N.C. Saxena, wanted provisions of the Act to be diluted for acquisition of lands up to 100 acres.

The stiffest opposition to the Act came from several State Governments cutting across the party lines.  In a ministerial note, the Kerala Government opposed several provisions including the requirement for mandatory consent from 80% of the affected families where the lands were acquired for private projects.  It took specific note of the difficulties in the Social Impact Assessment process under the Act by stating that “appointment of SIA Unit in each district and involvement of NFO Agency may be to be challenging…the introduction of public hearings may cause hindrance to the smooth conduct of the process”.

In Tamil Nadu, a State in which not many conflicts over the land acquisition have been reported despite its rapid industrialization, the Government has called land acquisition proceedings under the Act “time consuming” and has gone on to exempt several of its own land acquisition laws from the purview of the Central Act.

States such as Karnataka and Uttarpradesh have also diluted provisions of the Act while implementing it in their States.  Surprisingly even the biggest political beneficiary of the anti-land acquisition movement in India, the Trinamool Government in West Bengal, appears to be uncomfortable with several provisions of the Act including the compensation terms.

The views of State Governments are important considering the fact that the land acquisition is not a subject falling within the exclusive legislative domain of the Central Government, but is covered under the concurrent list of the Constitution thereby giving States also power to legislate.

It must be mentioned that the proposed ordinance is all two pages and contains only one significant change.  It adds a proviso to Section 2(2) of the Act which exempts 5 categories of projects from obtaining prior consent from “affected families” in the case of acquisition for private entities and conducting  “Social Impact Assessment” (SIA).

One of the primary criticisms of the amendment is that the 5 categories of the projects are too wide and can include almost any kind of project.   Yogendra Yadav says this can allow a “greedy builder politician or bureaucrats to include anything under the 5 categories.”  This is totally fallacious because no acquisition can be made under the Act either under the exempted categories or otherwise if there is no “public purpose” for the acquisition.  Even if land was to be acquired and handed over to a private entity, it can only be for execution of a project involving “public interest” as defined very specifically under the Act. The question of greed or private interest has no place.  The purpose of mentioning the 5 categories appears only to prioritize certain “public purposes” based on need and national interest.

Another criticism of the ordinance is that doing away with the requirement for minimum consent from the land owners will lead to forcible acquisition. The concept of land acquisition, historically and legally, has been an offshoot of State’s power of eminent domain. This has been described by the Supreme Court as recently as 2013 as follows- “power of eminent domain being inherent in the Government is exercisable in the public interest, general welfare and for public purpose.  The sovereign is entitled to reassert its domain over any portion of soil of the State including private property without its owners’ consent provided that such assertion to be public exigency.”  Therefore land acquisition by the State by its very nature does not require the consent of the land owners.  The possibility of misuse of such a power to further private interest cannot be dealt with by requiring consent of land owners and converting acquisition into a private transaction of sale. If the purpose of requiring consent was only to avoid forcible acquisition, there is no reason why this should apply only to projects executed by private entities because the acquisition in all cases is done only by the Government and the project has to be a for a ‘public purpose’ irrespective of who executes it.

It appears more probable that purpose of having minimum consent is only to ensure farmers are given bargaining strength while determining compensation payable by a private entity.  However considering the fact the compensation provisions under the present Act are far more stringent and beneficial than under the old law, the requirement for consent appears only to be a stipulation in abundant caution.  It can in no way be called the “soul” of the Act, as termed by Mr.Chidambaram.

 The other requirement diluted under Act is the holding of a  Social impact assessment (SIA). This provision even when it was originally recommended under the National R&R policy 2007 did not cover all kinds of projects.   The SIA is to be done at three levels- first by the Government in consultation with the concerned Panchayat/Municipality/Corporation, then by an “Export Group” which only has powers to recommend and the ball is back to the Government’s court to take a final decision. There is no time limit for the Government to constitute an expert group for each project.

An estimate by the policy group PRS Legislation Research suggests this Social Impact Assessment process alone could take twice the time taken for the entire land acquisition process under the old Act.  Apart from increasing the role of bureaucracy it is not known what this process would specifically achieve considering the fact that environmental impact assessment is already envisaged under a separate set of legislations and social and cultural rights of various groups are also protected under independent statutes.  It would also be wrong to say that this requirement is critical for the scheme of the Act because not just land owners but any person affected has a right to object to the land acquisition on the basis of “area and suitability of land proposed to be acquired”. This is similar to the grounds on which the SIA is required to be made under the Act.  The objections under Section 15 are also to be considered and decided by the Government as in the case of SIA.  Yogendra Yadav appears to be ignorant of this provision when he says “the Act of 1894 at least provided the affected landowners the right to object and be heard… now the landowners would not enjoy even this minimal safeguard.”

If one were to call any aspect of the Act its “soul” it is the beneficial rates of compensation and rights of rehabilitation given to land owners in a manner unknown under earlier laws.  These provisions have not been touched.  Another major USP of the Act is the specific definition of what constitutes ‘public purpose’ which also remains untouched. Therefore all the noise surrounding the amendments appears to be a clear case of making a mountain out of a mole hill.