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Submitted By-
Aaklin Gonsalves
The Land Acquisition Act remains one of the most amended acts in the history of India. The
reason for this is the conflict of industrialization over agriculture. India as a developing
nation must choose between industrial modernization and traditional methods of farming
for its population. No doubt that agriculture is a vital source of sustenance and is necessary,
but with the needs of the current economy we cannot overloo the vast lands India
possesses which are the potential elements of a modern and transformed India. This Act
tries to maintain balance without neglecting the effects of land acquisition on the rural
This report highlights the various consequences caused due to the shortcomings of the Act and
the provisions of the The !ight to "air #ompensation and Transparency in Land
Acquisition, !ehabilitation and !esettlement Act, $%&'.

Land Acquisition Act, 1894
The Land Acquisition Act, &()* is a law in India and +aistan that allows the government to
acquire private land in those countries. ,Land Acquisition- literally means the acquisition of land
for some public purpose by a government agency from individual landowners, as authorised by
the law, after paying a compensation to cover losses incurred by landowners
from surrendering their land to the concerned government agency. In India, a new Act, The !ight
to "air #ompensation and Transparency in Land Acquisition, !ehabilitation and !esettlement
Act, $%&' was passed by the +arliament in $%&' to repeal this Act.
The land acquisition act of &()* was created with the purpose of facilitating acquisition by the
government of privately held land for public purposes. The word 0public purpose0, as defined in
the act, refers to the acquisition of land for constructing educational institutions or schemes such
as housing, health or slum clearance, as well as for pro1ects concerned with rural planning or
formation of sites. The word 0government0 refers to the central government if the purpose for
acquisition is for the union and for all other purposes it refers to the state government. It is not
necessary that all the acquisition has to be initiated by the government alone. Local
authorities, societies registered under the societies registration act, &(2% and co.operative
societies established under the co.operative societies act can also acquire the land for
developmental activities through the government.
3minent domain has occurred in India since the era of Independence, with over $&.2 million
people in the period of &)4&.)%. They have been displaced with large.scale pro1ects lie dams,
canals, thermal plants, sanctuaries, industrial facilities, and mining. These occurrences are
generally categorized as 0development.related displacement0.
The process of land acquisition in India has proven unpopular with the citizenry. The amount
reimbursed is fairly low with regard to the current inde/ of prices prevailing in the economy.
"urthermore, due to the low level of human capital of the displaced people, they often fail to find
adequate employment.
The draft of the government5s National +olicy for !ehabilitation states that a figure around 647
of the displaced people since &)4& are still awaiting rehabilitation. 8owever, it should be noted
that displacement is only being considered with regard to 09irect 9isplacement0. These
rehabilitation policies do not cover fishermen, landless laborers, and artisans. !oughly one in ten
Indian tribals is a displaced person. 9am pro1ects have displaced close to a million Adivasis,
with similar woe for displaced 9alits. The 0:alter "ernandes of the Indian ;ocial Institute0 has
remared that *% percent of displaced people are of tribal origins.
There have been a rising number of political and social protests against the acquisition of land by
various industrialists. They have ranged from <engal, =arnataa, and >ttar +radesh in the recent
past. The acquisition of ))6 acres of land by Tata motors in <engal in order to set up a factory
for the cheapest car in India was protested. ;imilarly, the;ardar ;arovar 9am pro1ect on the river
Narmada was planned on acquired land, though the pro1ect was later canceled by the :orld
The Land Acquisition Act of &()* allowed the government to acquire private lands. It is the only
legislation pertaining to land acquisition which, though amended several times, has failed to
serve its purpose. >nder the &()* Act, displaced people were only liable
for monetary compensation, which was still quite minimal. ?any that get displaced are from the
poorest sections, the ma1ority are tribal and fail to raise their voice against the mistreatment.
Another important aspect has been the ignorance of staeholders in the share of the property.
This provides an added benefit to many entrepreneurs and promoters of the company.
9isplaced Tribals
+ro1ect ;tate 9isplaced +opulation Tribal +ercentage
=ar1an @u1arat &&,2%% &%%
;ardar ;arovar @u1arat $,%%,%%% 46.2
?aheshwar ?adhya +radesh $%,%%% 2%
<odhghat ?adhya +radesh &$,6%% 6'.)&
Icha <ihar '%,(%% (%
#handil <ihar '6,2%% (6.)$
=oel =aro <ihar 22,%%% ((
?ahi <a1a1 ;a1ar !a1asthan '(,*%% 62.$(
+olavaram Andhra +radesh &,4%,%%% 4$.)%
?aithon A +anchet <ihar )',(6* 42.*2
>pper Indravati Brisa &(,4%% ().$%
+ong 8imachal +radesh (%,%%% 42.$4
9isplaced Tribals
+ro1ect ;tate 9isplaced +opulation Tribal +ercentage
Ichampalli Andhra +radesh '(,&%% 62.$(
Tultuti ?aharashtra &',2%% 4&.2&
9aman @anga @u1arat (,6%% *(.6%
<hara 8imachal +radesh '2,%%% '*.62
?asan !eservoir <ihar ',6%% '&
>ai !eservoir @u1arat 4$,%%% &(.)$
The consequences of land acquisition in India are manifold.The empirical and theoretical studies
on displacement through the acquisition of land by the government for development pro1ects
have so far focussed on the direct and immediate adverse consequences of land acquisition. ?ost
of the analytical as well as the descriptive accounts of the immediate consequences of land
acquisition for development pro1ects draws heavily from ?ichael #ernea5s Cimpoverishment ris
model5, which broadly enumerated eight Criss5 or Cdimensions5 of development.induced
displacement. These eight riss are very much direct and basic in nature which are DiE
landlessness, DiiE 1oblessness, DiiiE marginalization, DivE loss of access to common property
resources, DvE increased morbidity and morality, DviE food insecurity, DviiE homelessness and DviiiE
social disarticulation D#ernea &))&E. !ecently L.=. ?ahapatra has added Closs of education5 as
another impoverishment ris in situations of displacement D?ahapatra &)))E.
<ut apart from these direct and immediate effects of land acquisition there are more subtle and
indirect effects of this coercive and centralized legal procedure, which have a bearing on various
decentralised and participatory democratic processes, and institutions of the state power. Land
reforms and the +anchayati ra1 institutions are the two most important areas, which are being
vitiated by land acquisition. Bf all the states of India, the consequences and controversies around
land acquisition in :est <engal has recently gained a lot of national and international attention.
The peasant resistances against governmental land e/propriation in ;ingurDa place in the 8oogly
districtE and NandigramDa place in the 3ast ?edinipur districtE has finally led to the fall of the
communist partyD?ar/istE led government in :est <engal, which ruled the state through
democratic election for '* years.The communist led left front government of :est <engal under
the economic liberalisation policy adopted by the #entral government of the country shifted from
its pro.farmer policy and too to the capitalist path of industrial development, which at the
micro.levels endangered the food security of the small and marginal farmers as well as
sharecroppers who formed the vote ban of the left front government of :est <engal.
Tata Nano Singur Controversy
Tata Nano ;ingur #ontroversy refers to the controversy generated by land acquisition of the
proposed Nano factory of Tata ?otors at ;ingur in 8ooghly district, :est <engal,India.
;ingur gained international media attention since Tata ?otors started constructing a factory to
manufacture their F$,4%% car, the Tata Nano at ;ingur. The small car was scheduled to roll out of
the factory by $%%(.

The state government of :est <engal facilitated the controversy by using &()* land acquisition
act rule to conduct an eminent domain taeover of ))6 acres D*.%' m$E of farmland to have Tata
build its factory. The rule is meant for public improvement pro1ects, and the :est <engal
government wanted Tata to build in its state. The pro1ect was opposed by activists and opposition
parties in <engal.
The rapid rise in the population of :est <engal has not been accompanied by significant
economic growth. =ey indicators such as unemployment rates, poverty rates, infant mortality
rates, 1ob growth rates, per capita income, mobile phone penetration rates lag the more
industrialized states of India. Local politicians gained power by promising agricultural land to
landless farmers, but given :est <engalGs population density, the are small and the
yields are insufficient to sustain poor families. :hile the shift from agriculture to industrial 1obs
requires, given IndiaGs economic growth, it provides an opportunity for earning higher
;everal other states had offered land to Tata ?otors for the pro1ect.
The people staying in the proposed land were forced to evacuate by the government. The
compensation given was considered inadequate and the new housing facilities offered were
delayed. This led to the protest of the peasants baced by opposition political parties.
The company had made substantial promises. According to their claims, ;ingur would become a city and appro/imately 6% vendors would set up shop along with the factory. The total
investment planned is to the tune of !s &,%%% crore. The pro1ect had, however, generated
controversy right from the start, particularly on the question of state acquisition of fertile
agricultural land for private enterprise.
Bn $' ;eptember $%%(, Tatas decided to leave ;ingur in :est <engal, the decision is reported to
have been made by the Tata management and the <engal government had been informed. Bn '
Bctober it became official that TATA will leave ;ingur D:<E when !atan Tata announced it in a
press conference in =olata.
Nandigra# vio$ence
The Nandigram violence was an incident in Nandigram in the :est <engal state of India, where
the #ommunist +arty of India D?ar/istE forcefully tried to acquire land for ;3H. "armers of the
locality were adamant they did not want to give land, they agitated under the banner of <hoomi
!asha #ommittee, while the then governor was on air and no contact was available with him
the police entered the Nandigram area and violence erupted. The :est <engal governmentGs plan
was to e/propriate &%,%%% acres D*,%%% haE of land for a ;pecial 3conomic Hone D;3HE to be
developed by the Indonesian.based ;alim @roup for the industrialization. The police shootings at
least &* villagers died and 6% more wounded.
The ;3H controversy started when the government of :est <engal decided that the ;alim @roup
of Indonesia."ar 3aster 3conomic !eview Bctober &))(I would set up a chemical hub under the
;3H policy at Nandigram, a rural area in the district of +urba ?edinipur. The villagers too
control of the area and all the roads to the villages were cut off. A story in
the =olata newspaper, The Telegraph, on * January $%%6 was headlined, 0"alse alarm spars
clash0. According to the newspaper, the village council meeting at which the alleged land seizure
was to be announced was actually a meeting to declare Nandigram a 0clean village0, that is, a
village in which all the households had access to toilet facilities. 8owever, later events indicate
that the government had in fact decided to set up the chemical hub and the villagersG concerns
were genuine. "ollowing the villagersG ob1ection to and protest against the acquisition of land in
Nandigram for the proposed chemical hub, the chief minister <uddhadeb <hattachar1ee ordered
the Nandigram land acquisition notification to be 0torn up0.
The chief minister said no notification had been issued for acquisition of land at Nandigram. A
team of policemen had been sent to dissuade people from digging up roads. Bne police officer,
;adhucharan #hatter1ee, aged 4), was illed while trying to repair a road dug up by protesters,
and twelve other policemen were very seriously in1ured. The administration was directed to
brea the <humi >chhed +ratirodh #ommitteeGs Dappro/imately translated from <engali as
0#ommittee to Bppose >prooting from Lands0E D<>+#E resistance at Nandigram and a massive
operation with at least ',%%% policemen along with armed cadre of members of the
ruling #ommunist +arty of India D?ar/istE D#+I.?E was launched on &* ?arch $%%6.
Information of the impending action had been leaed out to the <>+#, and they amassed a
crowd of roughly $,%%% villagers at the entry points into Nandigram, with women and children
forming the front rans. In the resulting mayhem, at least &* people were illed.
After the bloodshed at Nandigram, and the stiff resistance from opposition parties such as All
India Trinamool #ongress and ;ocialist >nity #entre of India D#ommunistE D;>#IE andLeft
"ront partners such as !evolutionary ;ocialist +arty and All India "orward <loc over land
acquisition, chief minister <uddhadeb G#hoto NunuG <hattachar1ee on ' ;eptember e/pressed the
governmentGs preference for the sparsely populated island of Nayachar, '% ilometres from
8aldia, to set up the much taled.about chemical hub.
T%e !ig%t to &air Co#pensation and Transparency in
Land Acquisition, !e%a'i$itation and !esett$e#ent
Act, ()1*
The !ight to "air #ompensation and Transparency in Land Acquisition, !ehabilitation and
!esettlement Act, $%&' is an Act of Indian +arliament that regulates land acquisition and
provides laid down rules for granting compensation, rehabilitation and resettlement to the
affected persons in India. The Act has provisions to provide fair compensation to those whose
land is taen away, brings transparency to the process of acquisition of land to set up factories or
buildings, infrastructural pro1ects and assures rehabilitation of those affected. The Act establishes
regulations for land acquisition as a part of IndiaGs massive industrialisation drive driven by
public.private partnership. The Act replaced the Land Acquisition Act, &()*, a nearly &$%.year.
old law enacted during <ritish rule.
The bill was introduced in Lo ;abha in India on 6 ;eptember $%&&. But of the $'4 members
who voted on the bill, $&2 baced it while &) voted against it. The Act was passed on $) August
$%&' in the Lo ;abha Dlower house of the Indian parliamentE and on * ;eptember $%&' in !a1ya
;abha Dupper house of the Indian parliamentE. The bill received the assent of the+resident of
India, +ranab ?uher1ee on $2 ;eptember $%&'. The Act came into force from & January $%&*.
+ig%$ig%ts o, t%e Ne- .i$$
K #ompensationL @iven the inaccurate nature of circle rates, the <ill proposes the payment of
compensations that are up to four times the maret value in rural areas and twice the maret
value in urban areas.
K !A!L This is the very first law that lins land acquisition and the accompanying obligations for
resettlement and rehabilitation. Bver five chapters and two entire ;chedules have been dedicated
to outlining elaborate processes Dand entitlementsE for resettlement and rehabilitation. The
;econd ;chedule in particular outlines the benefits Dsuch as land for land, housing, employment
and annuitiesE that shall accrue in addition to the one.time cash payments.
K !etrospective operationL To address historical in1ustice the <ill applies retrospectively to cases
where no land acquisition award has been made. Also in cases where the land was acquired five
years ago but no compensation has been paid or no possession has taen place then the land
acquisition process will be started afresh in accordance with the provisions of this act.
K ?ultiple checs and balancesL A Ccomprehensive, participative and meaningful5 process
Dinvolving the participation of local +anchayati !a1 institutionsE has been put in place prior to the
start of any acquisition proceeding. ?onitoring committees at the national and state levels to
ensure that !A! obligations are met have also been established.
K ;pecial safeguards for tribal communities and other disadvantaged groupsL No law can be
acquired in scheduled areas without the consent of the @ram ;abhas. The law also ensures that
all rights guaranteed under such legislation as the +anchayat D3/tension to ;cheduled AreasE Act
&))2 and the "orest !ights Act $%%2 are taen care of. It has special enhanced benefits Doutlined
in a dedicated chapterE for those belonging to ;cheduled #astes and ;cheduled Tribes.
K ;afeguards against displacementL The law provides that no one shall be dispossessed until and
unless all payments are made and alternative sites for the resettlement and rehabilitation have
been prepared. The Third ;chedule even lists the infrastructural amenities that have to be
provided to those that have been displaced.
K #ompensation for livelihood losersL In addition to those losing land, the <ill provides
compensation to those who are dependent on the land being acquired for their livelihood.
K #onsentL In cases where +++ pro1ects are involved or acquisition is taing place for private
companies, the <ill requires the consent of no less than 6%7 and (%7 respectively Din both
casesE of those whose land is sought to be acquired. This ensures that no forcible acquisition can
tae place.
K #aps on acquisition of multi.crop and agricultural landL To safeguard food security and to
prevent arbitrary acquisition, the <ill directs states to impose limits on the area under agricultural
cultivation that can be acquired.
K !eturn of unutilized landL In case land remains unutilized after acquisition, the new <ill
empowers states to return the land either to the owner or to the ;tate Land <an.
K 3/emption from income ta/ and stamp dutyL No income ta/ shall be levied and no stamp duty
shall be charged on any amount that accrues to an individual as a result of the provisions of the
new law.
K ;hare in appreciated land valueL :here the acquired land is sold to a third party for a higher
price, *%7 of the appreciated land value Dor profitE will be shared with the original owners.
.ene,its o, t%e Investors
K #onsentL In the case of public.private partnership pro1ects consent has been reduced from (%7
to 6%7. In additional only the consent of land owners is required.
K 9efinition of maret value has been amended to ensure that acquisition price doesn5t form the
basis for compensation calculation in future acquisitions. Also power has been given to the
#ollector to not consider transactions which he feels are outliers and not indicative of true value
while calculating maret value. 3arlier there was a danger of a price.spiral as Da multiple ofE
price of first acquisition in an area would go into calculation of land price for any subsequent
K ;tates given large fle/ibilityL A sliding scale will give states fle/ibility to fi/ compensation in
rural areas Dbetween two and four times maret valueE, depending on their distance from urban
areas. 3arlier compensation in rural areas was to be four times maret value.
K !estrictionsMthresholds on amount of irrigated multicrop land and net sown area per district or
state available for acquisition left to the discretion of states. 3arlier amount of irrigated multi.
cropped irrigated land that could be acquired was capped at 47, and amount of net sown area
that could be acquired was also capped.
K Land size thresholds on when !A! on private purchase of land becomes applicable has now
been left to the discretion of ;tates. 3arlier !A! on private purchases was to apply to all
acquisitions above &%% acres in rural areas and 4% acres in urban areas.
K +ayment for !A! costs by acquirer made a Cone.off5 acquirer to put all monies in an escrow
account, and ongoing commitments lie annuities and benefits to be administered by agency
established under this Act. 3arlier the <uyer would have had to pay and be involved with !A!
infrastructure building until complete, and !A! annuities to perpetuity. 8owever, families will
not be displaced from this land till their alternative !A! sites are ready for occupation.
K #ollector can be considered appropriate governmentL In cases where the land sought to be
acquired is below a certain threshold then the #ollector can be the acquiring authority.
Criticis#s and Suggestions
The proposed <ill, LA!! $%&& though giving too much thought to both the industrialists and
land.losers, is being criticized on a number of frontsL
;ome criticize the Act citing that it 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.
LA!! $%&& as proposed mandates that compensation and rehabilitation payments to land
owners and livelihood losers be upfront. This misaligns the interests of land acquirer and
those affected. Bnce the payment is made, one or more of the affected families may see to
delay the progress of the pro1ect to e/tract additional compensation, thereby adversely
affecting those who chose long term employment in the affected families. The <ill, these
economists suggest, should lin compensation and entitlements to the progress and success
of the pro1ect, such as through partial compensation in form of land bonds. These success.
lined infrastructure bonds may also help poor states reduce the upfront cost of land
acquisition for essential public pro1ects such as hospitals, schools, universities, affordable
housing, clean drining water treatment plants, electricity power generation plants, sewage
treatment plants, flood control reservoirs, and highways necessary to bring relief to affected
public during fires, epidemics, earthquaes, floods and other natural disasters. The state of
=erala has decided to pursue the use of infrastructure bonds as a form of payment to land
LA!! $%&& places no limit on total compensation or number of claimantsN nor does it
place any statute of limitations on claims or claimants. The beneficiaries of the <ill, with
guaranteed 1obs for $2 years, will have no incentive to be productive. The <ill should place a
limit on total value of entitlement benefits that can be annually claimed per acre, this
entitlement pool should then be divided between the affected families, and the government
should run this program if it is considered to be fair.
LA!! $%&& as proposed severely curtails free maret transactions between willing sellers
and willing buyers. "or e/ample, 9L" Limited O IndiaGs largest real estate developer O claims
that the current bill may limit private companies such as 9L" from developing affordable
housing for millions of Indians. 9L" suggests that direct land transactions with owners on a
willing voluntary basis, at maret.determined rate, should be ept out of the purview of the
bill. There should be no conditions imposed on free maret transactions between willing
sellers and willing buyers.
Amartya ;en, the India.born Nobel Laureate in economics, claims prohibiting the use of
fertile agricultural land for industries is ultimately self.defeating. ;en claims industry is
based near cities, rivers, coast lines, e/pressways and other places for logistical necessities,
quality of life for worers, cost of operations, and various reasons. ;en, further suggests that
even though the land may be very fertile, industrial production generates many times more
than the value of the product produced by agriculture. 8istory of industrialisation and global
distribution of industry hubs, ;en claims, show that the locations of great industry, be it
?anchester, London, ?unich, +aris, +ittsburgh, ;hanghai or Lancashire, these were all on
heavily fertile land. Industry always competes with agriculture, ;en claims, because the
shared land was convenient for industry for trade and transportation. Amartya ;en further
argues that in countries lie Australia, the >; or #anada, where agriculture has prospered,
only a very tiny population is involved in agriculture. Agriculture prospers by increasing
productivity and efficiency. ?ost people move out to industry. Industry has to be convenient,
has to be absorbing. :hen people move out of agriculture, total production does not go
downN rather, per capita income increases. "or the prosperity of industry, agriculture and the
economy, India needs industrialisation. Those in India, who in effect prevent
industrialisation, either by politically maing it impossible for entrepreneurs to feel
comfortable in starting a business, or by maing it difficult to buy land for industry, do not
serve the interest of the poor well, claims ;en. The proposed LA!! $%&& bill prohibits the
acquisition of fertile agriculture land beyond 47 per district.
An article in The :all ;treet Journal claims that the proposed LA!! $%&& rules will
apply even when any private company acquires &%% acres of land or more. "or
conte/t,+B;#B India sees about *%%% acres for its >;F&$ billion proposed steel
manufacturing plant in the Indian state of Brissa. In most cases, even small companies
planning >;F&%.>;F'%% million investment, seeing &%% or more acres will be affected by
the compensation plus rehabilitation effort and e/penses of LA!! $%&&. The :;J article
further claims that the proposed LA!! $%&& bill doesn5t actually define the word
,acquisition,- and leaves open a loophole that could allow government agencies to continue
baning land indefinitely.
The Bbserver !esearch "oundationGs ;ahoo argues that the bill fails to adequately define
0public purpose0. The current definition, he claims, can be interpreted vaguely. In leaving
public purpose too vague and porous, it would ensure that land acquisition will remain
hostage to politics and all inds of disputes. ?ore clarity is needed, perhaps with the option
that each state have the right to hold a referendum, whereby the voters in the state can vote to
approve or disapprove proposed public purpose land acquisitions through the referendum, as
is done through local elections in the >nited ;tates for certain public acquisition of private or
agricultural land.
The #onfederation of !eal 3state 9evelopersG Association of India claims that the
proposed LA!! $%&& bill is ind of one.sided, its ill.thought.out entitlements may sound
very altruistic and pro.poor, but these are unsustainable and will ill the goose that lays the
golden egg. This group further claims that the bill, if passed, will increase the cost of
acquisition of land to unrealistic level. It will be almost impossible to acquire 4%.acre or &%%.
acre land at one place for planned development. They suggest that if India does not facilitate
urbanization in an organized manner, all the incremental population will be housed in
disorganized housing developments such as slums with dire consequences for Indian
economy. In the long run, even farmers will suffer as fringe development of urban centres
will largely be in the form of unauthorized developments and they will not realize the true
economic potential of their lands.
The bill inflates the cost of land to help a small minority of Indians at the cost of the vast
ma1ority of Indian citizens, as less than &%7 of Indian population owns rural or urban
land., The LA!! <ill $%&& favours a privileged minority of land owners as the <ill mandates
above maret prices for their land plus an e/pensive rehabilitation pacage. The <ill does not
mandate a process by which the time involved in land acquisition is reduced from current
levels of years. Nor does the <ill consider the effect of e/cessive costs upfront, and
e/pensive rehabilitation mandate over time, on the financial feasibility of large.scale,
socially necessary infrastructure pro1ects needed by )%7P of Indians who are not
landowners. In an editorial, Qidya <ala writes that the most important weaness in the <ill is
bringing non.government transactions too under its purview. +rivate players buying 4%P
acres of urban land tracts or &%%P acres of rural areas would be required to comply with the
!A! pacage stated in the <ill.