Here's what failed the land acquisition law

By Naresh Chandra SaxenaEver since the passing of the new land acquisition law in 2013, there has been no big news in the social media about farmers’ unrest or agitation. This is quite a contrast with the first decade of this century that saw massive confrontations between landowners and government. Some examples are Singur, Posco, Vedanta and Polavaram. Does it mean that the 2013 law has built bridges between the two contending parties and, therefore, needs no further amendment?Although one needs more empirical data, my own hunch is that the 2013 law has been rejected by the land acquiring parties, including state governments, and they have resorted to direct negotiations, which reduces delay and litigation.The main concern of industry is not a one-time cost but the delay in securing possession over land, which causes an escalation in project cost. A close examination of the act will reveal that acquisition of even one acre would take at least three four years and the proposal will have to pass through a hundred hands. The delay is caused mainly because the act establishes several committees adorned by activists and “experts.” A simpler solution would have been to delegate powers to the district collector to acquire up to 100 acres without committees and without any reference to the state governments. The collector would obtain landowners’ consent and fix compensation through negotiations without any upper limit, and thus make land available to the project in a few month. Often, land value goes up after acquisition and the original owners feel cheated when they find that after a few years, the land they owned is being sold for ten to hundred times the price that was paid to them. A survey of the original inhabitants of Maan, a village near Pune where land was acquired for an information technology park and industrial estates, found that the process of acquisition was initially smooth, as a handsome compensation was paid to them. Most farmers sold their land willingly. A few years later, when land prices soared further, farmers felt bitter as they had no share in the cost appreciation of land. Farmers wanting to give up land are also desirous of being part of the promised industrialisation and urban development that goes with the acquisition. The preamble of the new act identifies affected people as possible “partners in development” as an outcome of compulsory acquisition. However, it would happen only if they too benefit from the hyperinflation that takes place after land acquisition.Therefore, whenever land acquired by the government is transferred to an individual or a company for a consideration, a part of the appreciated value should be given to the original landowner. However, section 102 of the act completely defeats the intention behind the idea of sharing capital gains with the landowner, as payment would be made only when no development has taken place on such land. The builder can plant one tree on that land and get away by not paying the original landowner any capital gains. Moreover, such benefit accrues only on the first sale, and not on subsequent transactions. It should have been made applicable for all transactions for at least 20 years.Another alternative is to give a certain percentage of the “developed” land back to the farmers. This is being successfully done in Amaravati, where a new capital is being built for Andhra Pradesh. Amaravati, as it exists today, is a result of 33,000 acres of land pooled by the state government from individual farmers in Vijayawada and Thullur, along the banks of the Krishna. Under this system, the preexisting landowners or occupants of the land voluntarily hand over and sign ownership rights to the government agency managing land transfers in that area. The agency’s job is to build roads and lay sewage lines and provide residents with electricity connections. Once that is done, the agency returns a smaller, predetermined portion of the now developed area to the original occupants. Landowners primarily stand to benefit from this scheme on two premises: first, the area once developed will have better amenities to improve the standard of living of its residents; secondly, on account of these amenities, the price of the land would rise to match the market value of the owner’s original holding.The results of land pooling in Amaravati are yet to be gauged with certainty. However, several positive developments have been promised to the people, such as the provision of old-age homes, canteens for the poor, a pension of 2,500 a month to landless families and tenant farmers for 10 years, free education, free healthcare, round-the-year implementation of the Mahatma Gandhi National Rural Employment Guarantee Scheme for agricultural labour, and skill development centres for unemployed youth, to name a few.To sum up, the 2013 law completely replaced the colonial land acquisition act of 1894. The new legislation ended the era of forcible acquisitions, enhanced compensation for both landowners and landless families significantly, provided for the essential resettlement and rehabilitation of families displaced on account of land acquisition, curtailed the abuse of the “urgency” clause, gave farmers a share in the appreciated value of the acquired land, and gave village councils new powers to decide on land acquisition. There is still room for improvement so that the whole process is not dilatory and does not retard economic growth.(The writer is a former secretary of the Planning Commission)

from Economic Times https://ift.tt/2C8wKn5