Business Standard

States' wish list puts govt in a bind over land law

States have suggested 19 amendments to the land law. If all of them are made, the new law would end up being a copy of the previous one

Nitin Sethi New Delhi
The Narendra Modi government is keen to amend the new Land Acquisition Act, but making land acquisition easier for industry on the ground could require an unprecedented effort for the National Democratic Alliance government, even though it has an absolute majority in the Lok Sabha.

But, first a look at the riddle of a law on paper. The government drew up minutes of the state revenue ministers meeting in June on the problems they faced with the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. They read like a long laundry list of amendments - 19 in all - that the central government claims all came from the states.

If all the amendments are made to the new law, it would for all practical purposes, end up being a copy of the previous law in a new language. Officials in the rural development ministry under Nitin Gadkari tasked with reviewing (or implementing) the law say that is not likely to be the case and the amendments, if and when finalised, will look at removing only critical roadblocks. But none of the officials either off or on the record want to discuss if the government is looking to build any consensus on all the 19 amendments or figuring out what amendments are common to ideas that came from the states.

Two senior officials from different state governments in central India that Business Standard talked to recently claim the list of amendments put in the minutes looked pre-intended to fall together as a list of woes. "You take one suggestion from each state government and you have the wish-list. Considering most of us do not even have the rules ready for the law, it's hard to see where the Centre is going with this process at the moment," says one official.

The suggestions compiled in the minutes of the meeting, a copy of which Business Standard reviewed, asks for, among others, doing away completely or partly with the consent clause for public-private-partnership projects, diluting the definition of 'affected families' that need to be compensated, doing away with the social impact assessment entirely, diluting the retrospective clause, easing the time required to complete the acquisition period, delinking the price to be paid from 'market value', using 'urgency' clause in a way that would give states absolute discretion, and not giving away unutilised lands to the original owners.

"These are not amendments, these are requests to rewrite the law yet again, don't be fooled," says one of the two state officials. "It (the Union government) can well wish to do so, but if it removes these provisions, it also has to find something conceptually different as replacement. Not even this government can politically afford to go back to the previous law. And, finding a new set of provisions is going to be a difficult task," he adds.

What ails the law

There two common threads of argument against the new land law act. One, that it links acquisition to market prices; and two, it is complicated and will lead to delays. The delay and complex procedures, some contend, will convert into additional project costs.

"That is a wrong notion. The prices are set by circle rates, which have historically been very low, particularly in rural and schedule V areas and hence not reflective of true market value. Besides, if the circle rate is close to the market value (in rural areas) then state authorities are free to set a lower multiplier," says Muhammad Khan, a Supreme Court lawyer who helped draft the law for the United Progressive Alliance as officer on special duty to its rural development minister, Jairam Ramesh.

He has argued in some of the first few cases before the Supreme Court on the legislation. On the social impact assessment, which many contend will delay acquisition, he says, "There is indeed a mandatory social impact assessment process but it is time bound and is context specific. That means if the acquisition is for a smaller area then the SIA will be correspondingly shorter."

But, the one political player the government may have to convince (or ignore) is its mentor, the Rashtriya Swayamsevak Sangh and its affiliates. Discussions have been held within RSS and its affiliates on the law and it has sought to be consulted before the government goes public with any formal amendment.

The amendments to the law largely focus on agricultural lands for real estate and sectors that require peri-urban and well-irrigated lands. The one area the new law has left ambiguous and the industry too remains uncertain is of the forest lands - a key that the mining sector especially wants to unlock besides industries like thermal power and hydropower. The interplay of forest laws, the tribal rights and the new land law remains ambiguous. The acquisition is carried out under forest laws, the rights of people are settled under the Forest Rights Act - Posco and Vedanta are two such cases - and the acquisition of these rights is to be done in concordance with the new land law.

"The tribal lands, very often cultivated lands recorded as forest under the earlier legislations, are where people have the least negotiating power against industry. The new law does not address this it by leaving critical sectors out of its ambit," admits a cabinet minister of the previous UPA government, not willing to let his name be disclosed in a critique of his party's flagship law.

"The real trouble though is the lack of a consolidated and well-settled land records bank. Community lands, often classified as wastelands on revenue records, are really marginal lands used by the poorest in the villages; these are the ones that get caught in litigation and in protests," says an official of the rural development ministry. While the process to have an electronic database began in the previous government, it is far from complete. Only 9 of the 35 states and union territories are working on an integrated database at the moment. Having the database would be just the beginning, sorting out disputes and reviewing ownership is the real battle ahead.

"Well, the truth is no one wants to get in to the business of land settlements and distribution, it's a political dynamite. Accepting that as fait accompli, the law, in my view, largely tried to give better terms of negotiations to the relatively powerful land owners," says the ex-minister.

"The social impact assessment is bound to be seen by industry because that in a way could be the first acknowledgement of rights of the landless which the state has failed to address for decades," he adds.

With an increased sense of entitlement among the marginal communities, where earlier laws legally gave over land rights to industry, gaining actual possession on ground has become difficult, even violent at times. It portends to only be more so.

A case in point is NTPC's 2400-MW Kudgi Super Thermal Power Project in Karnataka that saw police firing upon villagers protesting a project that on paper had all the clearances. It just turned out that the land acquired on records as wasteland was actually well-irrigated agricultural land. While the case is now sitting in the Supreme Court, the protest at the site is gaining ground.

  • Do away with or dilute consent for PPP projects
  • Delink price of land from market value
  • Reduce non-land owning people dependent on the site for compensation
  • Give state powers to use urgency clause for more than defence and strategic projects
  • Remove clause that blocks speculative purchase
  • Dilute retrospective clause
  • Remove land-for-land provisions
  • R&R pre-requisites to only be for large projects and not for private projects
  • Social impact assessment only for large projects
  • State laws to have veto over central law
  • Unutilised land not to be returned to landowners

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First Published: Aug 14 2014 | 12:20 AM IST

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