New Land Acquisition Bill unlikely to set threshold for government intervention, states to frame policies

NEW DELHI: The new Land Acquisition Bill is unlikely to set a threshold for government intervention in land purchases, leaving it to the states to frame policies on this politically volatile subject.

The Bill will, however, eliminate any scope for discrimination by specifying the same rate of compensation for all affected for land acquired by private developers or the state on their behalf. It will also put the onus of compensation on the party directly acquiring more than 100 acres.

This is expected to end the anomaly in the current system where the government pays the compensation to the landholders and then passes on the acquired land to private developers.

"We have altogether done away with the ratios," Planning Commission member Mihir Shah told ET.

The existing law requires private companies to directly acquire at least 70% of the land before seeking government assistance for acquisition of the remaining 30%.

"The point of the Bill is that whoever acquires the land will have to give compensation according to the rehabilitation and resettlement contents of the Bill. The issue is not who acquires the land; the issue is of compensation," Shah said

The Bill seeks to replace the colonial law of 1894, which gave powers to the government to acquire land at lower-than-market rates. It aims at offering farmers and other landowners market or better rates for land taken over for industrial projects.

The Bill is also likely to ban acquisition of multi-cropped land for 10 years. This clause will effectively put about 55 million hectares, or 40% of arable land, out of the reach of private developers.

Most of this land falls in the Indo-Gangetic plains, which encompasses areas of Punjab, Haryana, Uttar Pradesh, Bihar and West Bengal-the most fertile and densely populated regions of the country. Ground water here is available just 20-40 feet below the surface as against states such MP and Gujarat where it is found more than 200 feet.

"Multi-cropping land will be treated on a par with reserved forest land and tribal lands in terms of need to protect from indiscriminate acquisition," an official with the rural development ministry said. "Only farm and rural activities will be allowed in adjoining zones, strictly preventing industry from coming up."

The government is likely to set up monitoring agencies at the state and national levels to regulate acquisition and ensure resettlement and rehabilitation issues.

The official said the Bill will tackle relief and resettlement at the national level for the first time in the country. It will require industries to meet all the relief and resettlement provisions 5-6 months before they begin work on core projects.

Government role in land acquisition has become a politically contentious issue with the Trinamool Congress - a key ally of the United Progressive Alliance- calling for no state intervention while the National Advisory Council, led by UPA chairperson Sonia Gandhi, insisting on a government role in acquisition.


An earlier draft of the Bill, prepared by the rural development ministry, had continued with the prevailing 70:30 ratio of land acquisition by private developers and the government.

But the ministry has now decided to leave the agency and extent of the acquisition to the states.

"The move will also enable the private sector to have a clear idea of how much a project will cost them and for how long," said an official in the department of land resources in the ministry.

"Companies have lost a lot of money due to many uncertainties surrounding land acquisition. By defining compensation through a central legislation, this can be addressed," Shah said.

According to the draft Bill, landowners will have to be compensated to the tune of six times the registered price or stamp value of their land. They will also receive an inflation-linked annuity of 2,000 per month for 20 years from the date of acquisition.