After a hiatus of about 120 years, Government of India has finally
brought in a new bill in Real Estate sector:
“The Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and
Resettlement Act, 2013” (LARR)
This bill has a lot of changes, improvements & additions
over the existing Land Acquisition Act of 1894. And as the name suggests, LARR
primarily caters to the issues of rehabilitation & resettlement on top of
land acquisition norms. To understand the bill clearly, let’s first see what
the older Act was all about.
Land Acquisition Act, 1984
The Act of 1894 was focused on the providing compensation to
the owners of acquired land for any of the following Public purposes:
- Village/town development
- Habitation for landless people
- Education development by either state or authorities like
society/co-operative societies
- Development of a government corporation
Issues with Act of 1894
This Act had provision of acquiring the land only by the
government or government-allied agencies. There was large scale critic of this
Act and a demand to bring in new law due to several issues. Some of them are:
- The Land Acquisition Act of 1894 did not speak about the rehabilitation
and resettlement of the displaced landowners
- The compensation paid to the landowners was not appropriate
in some cases and over-valued in others
- Many a times, the ‘Public purpose’ was questioned to be
genuinely public
- There was no provision in favor of landlord if the acquired
land was not used for the purpose for which it was acquired or resold after
appreciation in the value
- There were issues while acquiring land for PPP (BOT)
projects by Private agencies
To do away with these and several other issues, LARR was
formulated and approved in the Parliament in September 2013. Let’s have a
simplified overview of LARR.
Land Acquisition, Rehabilitation & Resettlement Act
(LARR 2013)
LARR is an enhancement and revision of the Land Acquisition
Act of 1894. Like the older Act, LARR also lays protocols for compensation in
lieu of the acquired land for Public purpose projects. The definition of Public
purpose projects has been modified though. According to LARR, now the land can
be acquired for following purposes:
- Development of villages/habitation area for
landless/displaced people
- Development of government hospitals & infrastructure
facilities like educational institutions, hotels except the private
undertakings
- Development of government owned/affiliated tourism, sports
club, space programs, cold storages, processing units and manufacturing units
- Purpose of national defense & security
- Other government administered projects for the development
of region
Salient features of LARR
- Provisions for Rehabilitation & Resettlement of
displaced land owners of acquired lands apart from the compensation awarded
- A one-time subsistence allowance equal of Rs. 36,000;
construction of a new house in urban land if the house of the owner is lost
- Award of livelihood job, transportation costs and a series
of other compensation benefits over the land valuation
- Minimum 80% landlords’ consent for the acquiring area by
Private firms & 70% in case of PPP projects
- Clause of safeguarding the climatic aspects by monetary
compensation in case the land acquired belongs to a cultivable belt of
multi-cropped or single-cropped region
- Compensation to the tune of 400% of market value in rural
areas to 200% in urban regions
- Assessment study of Social Impact & notification of
acquisition intention by the developer
- Provision of paying the landlord, a sum equivalent to 40% of
the land price appreciation, if the land remains unused and sold after 5 years
of date of acquisition
- Fixing the timelines and enforcing more strict guidelines of
acquisition
- Formation of governing committees at 3 levels: Centre, State
& Project Level
Issues with Act of 2013
Many activists, industrialists & people advocating vote
in favor of manufacturing sector have raised following concerns against
R&R:
- R&R will halt the growth of Indian economy by
discouraging the infrastructure projects by PPP projects
- The new Act will give undue power and advantage to
agricultural sector and will result in cartelization against industrialization
- Ambitious projects like DMIC, East-West-North-South Road Corridor
etc., which require large scale land acquisition will come to a standstill
- This Act is just to generate a vote bank from farmers living
in the rural India
- FDI in Real Estate will be deflected to neighboring nations
who provide cheaper and hassle-free acquisitions for Infrastructural projects
- Land prices will decline as sellers will not be able to find
buyers
Our Views
After a lot of discussions and brain-storming over the above
mentioned Act, we at RealT Horizon have come to following conclusions:
- LARR provides unmatched compensation benefits, monetary
& non-monetary, to the landowners. So much so that rather than opposing the
acquisitions, landowners will now look forward to one so as to make easy
fortunes for rest of their lives. Ideally this should not be the case as this
will also hamper the Nation’s productivity.
- From the point of view of Manufacturing Sector, there could
not be a worse Act for them. As explained above, this sector will experience the
most severe blow by this Act. The project costs can increase from 9% to 110% in
some cases.
- But one has to agree that in the existing scenario, there is
no way out that landowners can raise their concerns of land acquisitions.
Developers and Government have already exploited the owners for a very long
time and with the advent of this bill, at least this will come to an end.
As per our philosophy of looking at the Real Estate from a
new angle we believe that this bill was necessary, but with some lenient clauses.
R&R will way too much affect industrialization, which is the prime need of
the hour for the nation.
------ Thanks for
reading RealT Horizon :) ------
