National Land Acquisition and Rehabilitation and Resettlement Bill

The Union Ministry of Rural Development unveiled a draft National Land Acquisition and Rehabilitation and Resettlement (LARR) Bill. Once implemented, LARR could bring an end to the  potentially end to the arbitrary land acquisitions under the Land Acquisition Act of 1894.

The 1894 Act, with its ill-defined “public purpose” clause did not allow this to happen because of constant state intervention. In past years, judicial interventions saw to it that justice was meted to those whose land had been acquired. Furthermore, many state governments have abused the urgency clause that has led to tremendous violations of the power of eminent domain.

The new Bill envisages an end to all such contentions. Apart from the good points, the bill might have a few defects as well. Firstly, the issue of the cost at which land is to be taken over. According to LARR, the compensation scheme requires land acquisition at six times the market value in rural areas and twice the market rate in urban areas. While the 1894 Act led to landowners being paid a very small amount, LARR takes a wild swing in the other direction. This will lead to serious distortions in the market. Because of this industries that have the power to generate employment—the small and medium enterprises—will be pushed out of the land market. And those who can afford such prices—very large industrial houses—can always substitute capital for labour, finally beating the very purpose of industrialization.

Another aspect that needs to be taken notice of is that of the resettlement and rehabilitation scheme (as detailed in schedule II and III of the Bill). These benefits are quite beneficial. A  mere scanning of schedule III shows that many of the facilities that are to be provided in case of land acquisition beyond a threshold, do not exist in large parts of the country. When the government has not been able to provide these to citizens, why should these “rights” be created out of just about nothing? Schedule III reads like a list of government failures to provide basic facilities to citizens that is now sought to be imposed as a cost for industrialization and development of infrastructure. This is bound to be a deleterious step.