The Land Acquisition Bill – Harbinger of fast-track infrastructure development?

By Abhishek Goenka

  • 11 Sep 2013

Land acquisition by the government for public purposes has been a highly debated and sensitive matter having social, economical and political repercussions. Compulsory land acquisition, a consequence of urbanisation and large-scale public infrastructure development, is currently governed by a 120-year-old lopsided legislation – The Land Acquisition Act, 1894. The current law which has unrestricted land acquisition as its sole objective empowers the government to acquire land for public purposes at its discretion. The land acquisition practices followed by the government has drawn criticism and accusations, including that of acquisition by coercion and arbitrarily settled compensations to the land owners.  Consequently, land acquisitions tend to be long-drawn and litigative processes which in turn lead to delays in execution of public infrastructural projects. This government now hops to drastically change this by enacting ‘The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2013’ (Bill).

As evident from the title of the Bill itself, the key objective of the new law is to make land acquisition a fairer and transparent process and provide measures for rehabilitation of the people affected due to loss of livelihood on account of compulsory land acquisition. The affected people often tend to be the disadvantaged group—i.e., farmers and tribals—for whom the land is the only source of livelihood. More significantly, the biggest shortcoming of the current law, which is the absence of a remedy against compulsory land acquisition, is now addressed with a mechanism which allows the affected people to have a voice in the decision on compulsory land acquisition. Once enacted, the provisions of the Bill are to apply retrospectively, covering cases where no land acquisition award has been made.

The provisions of the Bill apply to land acquisitions by the government for its own use and for public purposes, for projects being executed on PPP basis and for land acquisitions by private companies for public purposes. Separately, the Bill provides that the rehabilitation and resettlement (R&R) provisions contained therein will apply in case of land acquisitions by private companies under private negotiations with land owners, where the land size exceeds the prescribed limits which are to be set by the respective state governments.


As a fair check to control forced acquisitions, PPP projects require prior consent of at least 70 per cent of the affected families and similarly acquisitions by private companies require prior consent of at least 80 per cent of the affected families. The consent is also required on the compensation that shall be paid.

The Bill mandates that an upfront Social Impact Assessment is undertaken for every project involving land acquisition under its provisions. The process is designed to be a comprehensive and participative one involving the local panchayat, municipality or municipal corporation, as the case may be. The Social Impact Assessment report is to be evaluated by an expert group constituted with a fair representation of independent experts and thereafter the go-ahead for the implementation is given. To ensure that this is a time-bound process, the Bill requires that the Social Impact Assessment of every project must be completed within six months.

In terms of the compensation package, the Bill guarantees a minimum compensation of up to 4 times the market value of the land acquired in rural areas and up to 2 times the market value of land acquired in urban areas. Additionally, a sum of 100 per cent of such amount is to be added as solatium. Under the rehabilitation and resettlement (R&R) package, each affected household is to be provided with housing in case of displacement, land for land in the project in case of it being irrigation or urbanisation project, guaranteed employment or alternatively an annuity of Rs 2,000 per month for 20 years or Rs 5 lakh in lump sum. Separately, R&R benefits would also entail subsistence grants for a one-year period, transportation costs, related stamp duties and registration fees. Also, all compensations under the new law would be tax free in the hands of the individual. Evidently, the R&R measures in the Bill are designed to provide a long-term sustenance plan for the affected families. Pertinently, in sync with the overall theme of the new legislation, the provisions relating to R&R measures are elaborated over five chapters and two dedicated schedules in the Bill.


As safeguard measures and to ensure food security, special provisions have been inserted to prevent acquisition of multi-crop irrigated land, unless there are extreme circumstances requiring the same. Also, it empowers the state governments to impose limits on acquisition of agricultural land and also confers upon them the responsibility to cultivate equivalent agricultural land. Other checks and balances that have been inbuilt into the Bill include appreciation sharing in case of land being sold off without implementation of the intended project.

In conclusion, the Bill is definitely a much advanced and fairer replacement to the draconian Land Acquisition Act. Understandably, evolving of a law of such nature is a complex process and given that the affected people are the disadvantaged segment of the society, it carries huge social and economic expectations and the Bill definitely appears to provide them with a fair deal in terms of the prescribed compensation and the R&R measures. More importantly, it provides them a say in the process which was lacking. One will have to wait for the passage of time to understand whether the Bill resulted in an electoral advantage to the government or it really offers what it promises, a fair and transparent legal framework for land acquisition resulting in fast tracking of the laggardly public infrastructure development.

(Abhishek Goenka is Partner, BMR Advisors. With inputs from Gautham Lokande, Associate Director)


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