DEST Practice 16

Land acquisition for public purposes is one of the most politically sensitive and legally complex areas of governance in India, involving the fundamental tension between the developmental imperatives of a growing economy that requires land for infrastructure projects, industrial facilities, housing developments, and public institutions on the one hand, and the rights, livelihoods, and cultural attachment of landowners, tenant farmers, and dependent communities who may be displaced from land that is their primary economic and social asset on the other hand. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013, which replaced the Land Acquisition Act of 1894 that had been the governing legislation for over a century, introduced significant changes to the process, compensation framework, and rehabilitation entitlements applicable to land acquisition for public purposes. The Act requires that a Social Impact Assessment be conducted before acquisition proceedings commence, examining the intended public purpose, the minimum land required, whether acquisition of private land is the least disruptive option, and the likely social impacts including displacement of livelihoods, disruption of communities, and impact on food security. For acquisitions for private companies and public-private partnerships, the consent of a majority of affected landowners and families is required before the government can proceed with compulsory acquisition, creating a negotiated land market that respects the agency of landowners while enabling development projects that are genuinely in the public interest. The compensation framework awards land at market value determined by the higher of the registered transaction value, the value determined by the Collector using specified methods, or the average of sale price for the highest fifty percent of transactions in the vicinity, multiplied by a solatium of one hundred percent, resulting in compensation at two times the determined market value, plus additional allowances for trees, buildings, and standing crops. Rehabilitation and resettlement entitlements include provision of a house with specified minimum area, a one-time resettlement allowance, an annuity or employment to each affected family for a specified period, and inclusion in the development project if any commercial venture is established on the acquired land. The compensation awards under the new Act are substantially higher than under the old legislation, reflecting the government's recognition that previous compensation was grossly inadequate relative to the actual loss suffered by displaced communities. State governments have enacted their own land acquisition laws and amendments, some more restrictive and others more permissive than the central framework, creating a complex multi-layered regulatory environment for infrastructure developers who operate across state boundaries. The National Highways Authority of India, which acquires large tracts of land for the national highway development programme, has developed extensive in-house capacity for managing the land acquisition process including social impact assessment, award notification, and rehabilitation.