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Wednesday, 16 July 2014 00:00
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Modi govt does well to try and unravel bad land Act

Though the BJP gave its reformist credentials a big blow by acting like Sonia Gandhi’s B-team on several regressive pieces of legislation, it is to the credit of the Narendra Modi government that it is trying to rework the draconian Land Acquisition, Rehabilitation and Resettlement (LARR) Act 2013 and come up with a more acceptable law. A law that not only allows land-losers to get the right price for their land, but also allows firms to set up shop—indeed, it is only when industry is doing well that jobs can be got for land-losers and, in the first instance, a high price can be paid for the land. Given the large number of instances where land-owners got a pittance, and where state governments abused their emergency powers to procure land cheap for industry/services, there was a definite need for a just law. And that is what the LARR Act started out as. So, the highest price of any deal in an area over the past few years was to be taken as the base price. This was then to be doubled; the new price was to be multiplied by another factor—while the LARR Act envisaged a factor of 2, this was left to states and some, like Maharashtra, came up with a factor of 1.

It is after this that the LARR Act became seriously problematic since a social impact assessment (SIA) was to be done for even medium-sized acquisitions, including those by the private sector, without any government assistance. And after the value of land was paid, jobs had to be provided for those affected by the project, alternative housing, resettlement allowances, and the like. And since the rehabilitation was to be done by the government, this tied the private sector’s hands even further.

What comes as a real shocker, when rural development minister Nitin Gadkari called a meeting of states on the matter, most states, including Congress-ruled ones, vociferously opposed the law. The Kerala government, for instance, felt identifying land-owners was a herculean task and should be done away with; Karnataka and Kerala wanted SIA to be done only for large projects. Though not a Congress state, Tamil Nadu said the definition of what was to be ‘public purpose’ was to be defined by the states; states like Uttar Pradesh (UP) and Chhattisgarh wanted the description of what are called ‘affected parties’—who need to be covered by the elaborate rehabilitation and resettlement (R&R) policies—to be whittled down; UP has said the R&R requirements have to go for land bought by private firms. While land-losers need to be protected, the fact is the LARR Act was unduly restrictive and ensured even medium-sized projects could not take off. Equally, by prescribing a rigid framework of compensation, it didn’t allow for more innovative solutions such as land-pooling, which has been successfully used in certain areas—landholders allow their land to be pooled by a civic authority, which takes away 30-40% of the land for utilities and, after doing the master planning, returns land to the original owners; given the land is now worth much more, it is a win-win for all concerned. With the suggestions now in, an all-party meeting needs to be called at the earliest, and a new Bill passed to replace the LARR Act.


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