Introduction:

A couple of days back the Indian Parliament voted in favor of the Land Acquisition, Rehabilitation and Resettlement Bill, 2012 (LARRB) which replaces the more than a century old, archaic Land Acquisition Act, 1894. This was long due and the unanimity with which it was voted in the Lok Sabha speaks of the intrinsic merit and improvement over the previous act. The bill seeks to within its ambit acquisition of land exceeding 50 and 100 acres in urban and rural areas respectively.

Merits:

The foregoing act was obsolete and was monopolistic. The peasants and the landlords were helpless before the government’s decision to launch a project or infrastructure. They had no say in the matter as the land was forcibly acquired and compensation paid as per the areas-wise scale devised by the government. The recent possession of land by Tata at Singur of West Bengal and the government of Odisha occupying lands for PESCO project are vivid examples of the archaic manner in which lands were acquired which cause social unrest and breach of peace.

Moreover, compensation paid were too meager to satisfy the land owners as the price fixed by the government is far below that offered by private purchasers. In a nutshell, land was being snatched away from its owner. Now, compensation is 400% in rural areas and 200% in urban areas in relation to the cost of land fixed by the government. This is a definite improvement on the existing provisions and facilities.

Demerits:

The new provision is not free from its inherent drawbacks and contradictions. The cost of land will go up as the purchase price is much higher. A conditional acquisition clause of consent to 80% in rural areas and 70% for municipal projects is not easy and instant. Either the patch of land for the project will not be obtained at all or, if at all, consent is obtainable, the process will take years. The project cost will go higher for an industry to be commissioned and the project itself is likely to be shelved, if land acquisition is delayed in which case project cost will shoot up.

Time and cost factors will render industry non-viable. Besides industries, many developmental works undertaken by the government, such as, road project, park project, water kingdom project, etc. may not see the light of day with the required number of consent percentage not being satisfied. This will kill investor’s confidence. Now, at a time when infrastructure projects are under tremendous pressure, this bill will provide only a deterrent effect, less conducive to inclusive growth.

Mostly in villages and in many cases in town areas, the title deeds are defective or shabbily documented with no clear picture of the legal heirs or claimants. Purchasing land with defective title deed is a legal offence as it does not confer a valid title on the transference. A patch of land or more reminiscing with a defective ownership, purchased by the buyer without proper knowledge will render the project ineffective as the legal battle will not end easily, the claimant being unidentified. What the court verdict will be in future and in whose favor it will go cannot be easily made out in the case f a family dispute involving ancestral landed property.

In other words, there is adequate apprehension that once enacted the original act will bring a standstill to various upcoming projects. Another worrying factor is that the role of middlemen will find a great impetus in a vast majority of cases, the buyers will have to depend upon and these people are likely to terrorize the seller, compelling him to see the patch of land and grabbing his booty both from the buyer and the seller. Many housing projects are in the offering and many more will be there in future; with the cost of land on ascendancy, the cost of a newly built house is bound to be higher, denying middle class people a place for their families to live in. Naturally, the higher cost of construction will be passed on to buyers.

The Land Acquisition, Rehabilitation and Resettlement Bill, 2012 (LARRB) in a nutshell:

1. It is expected to shoot up costs.
2. It will delay land acquisition.
3. The bill replaces the antediluvian Land Acquisition Act, 1894.
4. Come at a time when infrastructure projects are already under pressure.
5. Lower investors’ confidence.
6. High cost of funds.
7. Delaying the process.
8. The clause of mandatory content of 80% for classified projects and 70% for PPP (purchasing power parity) projects will delay the land acquisition process.
9. In most cases title deeds are defective or not clearly documented.
10. The bill applies to land acquisition up 50 acres in urban areas and 100 acres in rural areas.
11. Compensation will be doubled in urban areas and four times in rural areas.
12. The role of middle men will be exalted.
13. Industry projects will be unviable as the cost will escalate by three to four times.
14. With the cost of land going sharply up, the cost of housing projects will be higher which will be passed on to the buyers. 
15. Infrastructure projects will suffer.
16. Process of land acquisition will take four to five years.
17. The previous legislation was archaic.

Conclusion:

The bill is a mixed pickle of sweet and sour. In one hand, it benefits sellers and in the other a buyer suffers. But more than individual gain or loss, welfare projects in the future are going to be a nightmare. May be in future, the difficulties and bottlenecks in the bill will see another overall of the present provisions.

• Written by mohan manohar.
• In category Business & Finance.
• 11 years ago.

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