A lot depends on the wisdom of individual states
Though the final version of the Land Acquisition, Rehabilitation and Resettlement (LARR) Bill, to have been introduced in the Lok Sabha yesterday, is dramatically improved as compared to the original proposed, it will undoubtedly slow the process of land acquisition and also make it much more expensive. While the National Advisory Council was in favour of much higher compensation, and even disallowing acquisition of land for use by private sector, the BJP-headed Standing Committee opposed the government helping acquire land for even PPP projects. Much of this has been taken care of in the final LARR, and a few new provisions have been added. To begin with, while government land acquisition as in states like Uttar Pradesh had fallen foul of the law given obvious examples of high-handedness on the part of the government, there were large amounts of private land purchases that were taking place. Under LARR, however, private land purchases above a certain level will also be subject to rehabilitation and resettlement (R&R) provisions—the saving grace here, based on the suggestion of the Standing Committee, is the threshold level for this will be decided by each state government. In the earlier versions of the Bill, this was 50 acres in urban areas and 100 acres in rural areas—to put the 100 acres in perspective, the Tata Nano plant in Sanand in Gujarat is 1,100 acres. In which case, chances are there will be even less development in states where the political class wishes to win popular support by notifying low threshold areas.
The problem with the R&R—there is no threshold defined in terms of the size of the land—that seeks government help to acquire land is that every project, including creation of FCI godowns for instance, will need a Social Impact Assessment (SIA) study. Once the SIA has determined whether the benefits of the project outweigh the costs and whether the project has been given too much land, among many other provisions, then the R&R provision comes in. Many of the R&R facilities promised in the third schedule of LARR are not present in large areas of the country even today. These include proper drainage and sanitation, assured sources of drinking water, creation of irrigation facilities, one community centre for every hundred families—while it is true these need to be created by the government and only paid for by the private sector, given the government’s well-known lack of capacity for execution, this means large land acquisitions can take decades. And it is after this land acquisition has taken place that other clearances such as those relating to the environment will be applied for. Nor is it quite clear how the committee drafting LARR came up with these suggestions. Since, it is true landowners mostly don’t get the true value of their land—state governments usually give permission for land-use conversion after it is bought by the private sector—LARR attempted a solution. This involved looking at the highest price of land registrations in the area and then multiplying this by 2 (for rural areas), to take into account the low values at which registrations take place. To this, is added a solatium equal to the value of the land. Presumably, this four-fold figure helps arrive at the fair value of the land. LARR, however, requires provision of alternate housing for the displaced which includes those living or doing business in the area, not just the owners; jobs have to be guaranteed or R5 lakh has to be paid as a one-time compensation to displaced families, subsistence grants, transportation costs, resettlement allowances … In none of this is there any provision to help buy land for industry as Gujarat did for the Tata’s Nano project. Parliamentarians needs to think LARR through carefully before approving it since it also applies to government flagship programmes.