THE LAND
ACQUISITION ACT, 2013 –AN OVERVIEW
By
K P C Rao, LLB, FCMA, FCS.,
CMA (USA), FIPA
(Australia)
Practicing Company
Secretary
kpcrao.india@gmail.com
Background
Economic growth and job creation require efficient usage of
land resources. It is important that a fair and transparent process for
purchase and for acquisition of land is followed.
(1) For the purchase of land, a key concern is the
authenticity of land titles.
(2) In the case of land acquisition, the key issues to be
addressed are:
(a)
What are the end-uses for which public interests will
trump private property rights, and justify acquisition of land from a person
who is not willing to part with it?
(b)
What should be the process followed?
(c)
Since there is no market mechanism of discovery of
prices in these cases, how should compensation be computed?
(d)
Is there a need to address non-land owners who may be
displaced by the acquisition process?
(e)
Does the acquisition process get completed in a
reasonable amount of time, and is there finality to the acquisition?
(f)
In sum, do both sides—the acquirer and the land
owner—perceive the process to be fair?
Therefore, there is a need for the new Law at least on three
counts viz; (1) to Address Public Concern; (2) to Replace Outdated Law and (3)
the Need for Balance.
To addresses these issues Right to Fair Compensation and
Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (The
Land Acquisition Act, 2013) was passed on 29th August 2013 in the Lok Sabha and on 4th September 2013 in Rajya Sabha and received the ascent of the President of India
on 27th September 2013. This Act
would be notified by early next year after framing of rules.
Highlights of the Act
(a) The Act provides for land acquisition as well
as rehabilitation and resettlement. It replaces the Land Acquisition Act,
1894.
(b) The process for land acquisition involves a
Social Impact Assessment survey, preliminary notification stating the intent
for acquisition, a declaration of acquisition, and compensation to be given by
a certain time. All acquisitions require rehabilitation and resettlement
to be provided to the people affected by the acquisition.
(c) 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.
(d) In case of acquisition of land for use by
private companies or public private partnerships, consent of 80 per cent of the
displaced people will be required. Purchase of large pieces of land by
private companies will require provision of rehabilitation and resettlement.
(e) The provisions of this Act 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.
Conclusion
The proposed law is an unhappy
compromise between two extremes: letting all manner of landholders hold
industry hostage and preventing the latter from trampling the property rights
of small and marginalized landholders. As in most Indian compromises, this one
too will lead to sub-optimal results.
Economic efficiency is enhanced
only when competitive bidding for resources happens in a free market. This is
far from the current setup in India, where the bureaucracy plays a huge role in
resource allocation. The proposed legislation aims to improve economic
efficiency and preserve the economic rights of landowners. But, given that
neither is compatible with a system of resource allocation based on political
interests, it is unlikely to deliver on both counts. What we need is the policies
for the 21st century, not a throwback to Luddite notions of the 19th century.
*****
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