LARR Act, 2013

GS 3: Land Reforms

The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013

• Act of Indian Parliament that regulates land acquisition and provides laid down rules for granting compensation, rehabilitation and resettlement to the affected persons in India.
• The Act has provisions to provide fair compensation to those whose land is taken away, brings transparency.
• The Act replaced the Land Acquisition Act, 1894
• The Act came into force from 1 January 2014

Aims and objectives

• To acquire land in consultation with institutions of local self-government and Gram Sabhas established under the Constitution of India
• To make the acquisition process transperant
• To provide just and fair compensation to the affected families
• To make adequate provisions for affected persons for their rehabilitation and resettlement
• To make the affected ones partners in development leading to an improvement in their post acquisition social and economic status

Scope

• The scope of the Act includes all land acquisition whether it is done by the Central Government of India, or any State Government of India, except the state of Jammu & Kashmir.

The Act is applicable when:

• Government acquires land for its own use, including land for Public sector undertakings.
• Government acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose. The purpose of LARR includes public-private-partnership projects.
• Government acquires land for immediate and declared use by private companies for public purpose.
• The provisions of the Act does 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

Provisions

Public purpose

• Act defines the following as public purpose for land acquisition within India
• For strategic purposes relating to naval, military, air force, and armed forces of the Union, including central paramilitary forces or any work vital to national security or defence of India or State police, safety of the people; or
• For other infrastructure projects, agro-processing, supply of inputs to agriculture, warehousing, cold storage facilities, marketing infrastructure, industrial corridors or mining activities, national investment and manufacturing zones, water harvesting and water conservation structures, Government aided educational and research schemes or institutions, project for sports, health care, tourism, transportation of space programme
• When government declares public purpose and shall control the land directly, consent of the land owner shall not be required. However, when the government acquires the land for private companies, the consent of at least 80% of the project affected families shall be obtained through a prior informed process before government uses its power under the Act to acquire the remaining land for public good, and in case of a public-private project at least 70% of the affected families should consent to the acquisition process.
• Criticism: The phrase ‘Public Perpose’ is defined but is ambiguous. This might give rise to lot of loopholes which might be manipulated by government under the influence of corporates.

Urgency Clause

• The Act includes an urgency clause for expedited land acquisition. The urgency clause may only be invoked for national defense, security and in the event of rehabilitation of affected people from natural disasters or emergencies.

Definition of 'land owner'

• The Act defines the following as land owner:

• person whose name is recorded as the owner of the land or building or part thereof, in the records of the authority concerned; or

• person who is granted forest rights under The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 or under any other law for the time being in force; or

• Person who is entitled to be granted Patta rights on the land under any law of the State including assigned lands; or

• any person who has been declared as such by an order of the court or Authority;

Limits on acquisition

• The Act forbids land acquisition when such acquisition would include multi-crop irrigated area.
• However such acquisition may be permitted on demonstrable last resort, which will be subjected to an aggregated upper limit for all the projects in a District or State as notified by the State Government.
• In addition to the above condition, wherever multi-crop irrigated land is acquired an equivalent area of cultivable wasteland shall be developed by the state for agricultural purposes.
• In other type of agricultural land, the total acquisition shall not exceed the limit for all the projects in a District or State as notified by the Appropriate Authority.
• These limits shall not apply to linear projects which includes projects for railways, highways, major district roads, power lines, and irrigation canals.
• Criticism: Few economists like Amratya Sen claim prohibiting the use of fertile agricultural land for industries is ultimately self-defeating. Sen claims industry is based near cities, rivers, coast lines, expressways and other places for logistical necessities, quality of life for workers, cost of operations, and various reasons. Instead, he suggests optimization of agriculture like the developed countries.

Compensation

• Section 27 of the Act defines the method by which market value of the land shall be computed under the proposed law.
• The market value would be multiplied by a factor of, at least one to two times the market value for land acquired in rural areas and at least one times the market value for land acquired in urban areas.
• Criticism: The methods of computing market value will give rise to practical difficulties and might end up inflating land prices. Some economists suggest that it attaches an arbitrary mark-up to the historical market price to determine compensation amounts, along with its numerous entitlements to potentially unlimited number of claimants.

Rehabilitation and resettlement

For land owners, the Act provides:

• an additional subsistence allowance of Rs.36,000 (US$ 800) for the first year
• an additional entitlement of a job to the family member, or a payment of Rs.5,00,000 (US$ 11,000) up front, or a monthly annuity totaling Rs.24,000 (US$ 550) per year for 20 years with adjustment for inflation – the option from these three choices shall be the legal right of the affected land owner family, not the land acquirer
• an additional upfront compensation of Rs.50,000 (US$ 1,100) for transportation
• an additional upfront resettlement allowance of Rs.50,000(US$ 1,100)
• if the land owner loses a home in a rural area, then an additional entitlement of a house with no less than 50 square meters in plinth area
• if the land is acquired for urbanization, 20% of the developed land will be reserved and offered to land owning families, in proportion to their land acquired and at a price equal to cost of acquisition plus cost of subsequent development
• if acquired land is resold without development, 20% of the appreciated land value shall be mandatorily shared with the original owner whose land was acquired
• In addition to the above compensation and entitlements under the proposed LARR 2011, scheduled caste and schedule tribe (SC/ST) families will be entitled to several other additional benefits
• Criticism: Some criticize the Act is heavily loaded in favour of land owners and ignores the needs of poor Indians who need affordable housing, impoverished families who need affordable hospitals, schools, employment opportunities and infrastructure and industries.

Other criticism

• LARR severely curtails free market transactions between willing sellers and willing buyers.
• The bill inflates the cost of land to help a small minority of Indians at the cost of the vast majority of Indian citizens, as less than 10% of Indian population owns rural or urban land
• LARR 2011 bill is kind of one-sided, its ill-thought-out entitlements may sound very altruistic and pro-poor, but these are unsustainable
• often accused of having brought development to a grinding halt

Land Acquisition ordinance 2014

Removal of consent clause and Social Impact Assessment

• The government has amended Section 10(A) of the Act to expand sectors where assessment and consent will not be required. Mandatory "consent" clause and Social Impact Assessment (SIA) will not be applicable if the land is acquired for national security, defence, rural infrastructure including electrification, industrial corridors and housing for the poor including PPP where ownership of land continues to be vested with the government.
• In the earlier law, the assessment was meant to find out how many people will be impacted. So apart from the land owner, all those who are dependent on the land also needed to be compensated. But the new ordinance ensures that only land owners will be compensated.
• Also whether the land is fertile or not will also not be taken into consideration while acquiring it for these five specific sectors. Thus even if the land is extremely fertile like it was the case in Singur, it can be acquired if it fits the criterion of these five sectors

'Pro-farmer step'

• The government has balanced out the ordinance by including 13 so far excluded Acts under the Land Acquisition Act.

These Acts include the

• Coal Bearing Areas Acquisition and Development Act
• National Highways Act
• Land Acquisition (Mines) Act
• Atomic Energy Act
• Indian Tramways Act
• Railways Act
• Ancient Monuments and Archaeological Sites and Remains Act
• Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act
• Damodar Valley Corporation
• The Electricity Act 2003
• Requisitioning and Acquisition of Immovable Property
• Resettlement of Displaced Persons (Land Acquisition) Act
• Metro Railways (Construction of Works) Act

are also brought under its purview to provide higher compensation, rehabilitation and resettlement benefits to farmers whose land is being acquired.

Compensation remains the same

• The compensation package remains the same. It is four times the market price for rural and and two times for urban land.

Why did the government pass the ordinance now?

• The political reason is that the government is looking to give a message to investors that they're trying their best to free up procedural bottlenecks which are almost a hallmark of any infrastructure investment in India.
• The government is looking to boost up manufacturing to make Modi's ambitious Make in India project a reality and this is a big bold step towards it.
• Will be updated once the issue is resolved

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