Land Acquisition in India – Arbitral Tribunal Verdict on Singur Land Acquisition Case

Context:

• This article is based on the news “Land acquisition clarity could be Singur’s legacy” Which was published in the Live Mint. Recently, a three-member Arbitral Tribunal ruled in favor of Tata Motors in the Singur land acquisition case and ordered the West Bengal government to pay around Rs 766 crore as compensation.

Arbitral Tribunal Verdict on Singur Land Acquisition Case

• The arbitral tribunal also ordered the West Bengal Industrial Development Corp. Ltd (WBIDC) to pay the interest on the amount at an 11% rate.

What is the TATA Singur Land Acquisition Case?

In 2006, the West Bengal government acquired nearly 1,000 acres of land in Singur, Hooghly, to build a manufacturing facility for the Tata Nano. 

• The land acquisition was opposed which led to a mass movement against land acquisition in Singur. 
• The movement was successful and the project forced the company to relocate it to Gujarat in 2008.

Know more about the Singur Land Acquisition Case 

What is Land Acquisition?

• Land acquisition: It is the process by which the government acquires private property for public purposes without the consent of the land-owner. It is thus different from a land purchase, in which the sale is made by a willing seller.
• Land acquisition in India is governed by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCT-LARR) Act, 2013. 
• The 2013 Act focuses on providing not only compensation to the land owners but also extends rehabilitation and resettlement benefits to livelihood looser from the land, which shall be in addition to the minimum compensation. 
• Provisions under the act:
  • Mandatory: 70% consent for Public Private Partnership (PPP) projects, 80% consent for private projects, and Social impact assessment (SIA) for every project.
  • Compensation: 4 times the market rate in rural areas and 2 times in urban areas.
  • Stringent provisions for relief and rehabilitation.
  • Private companies can acquire land for public purposes.
  • The provisions of this Bill shall not apply to acquisitions under 16 existing legislations including the Special Economic Zones Act, 2005, the Atomic Energy Act, 1962, the Railways Act, 1989, etc.

Why land acquisition is needed?

The importance of improving land laws in India has gathered traction in the aftermath of the COVID-19 pandemic as a necessity to enhance India’s attractiveness to global businesses. 

• Land is Scarce Resource: It is scarce and inefficiently used  in India. Land is the source of livelihood for over half of India’s population. 
  • For instance, India holds only 2.4% of total land surface but we host more than 18% of the world population. 
• Infrastructure Development: To build roads, highways, railways, airports, and other critical infrastructure projects, acquiring land is necessary. 
  • For example, Uttar Pradesh acquired land for the Yamuna Express Highway. 
• Industrial and Economic Growth: Land is required for establishing industries, manufacturing units, special economic zones, and technology parks etc.
  • For instance, land acquisition for establishment of Special Economic Zones (SEZs) has been aimed at boosting manufacturing, trade, and economic activities.
• Urban Expansion and Housing: Urbanisation is taking place at a faster pace and by 2050, India is likely to see 850-900 million people living in urban spaces. As cities expand and populations grow, land acquisition becomes essential for housing and related amenities. 
  • For example, the government have undertaken land acquisition for slum redevelopment projects in various cities. 
• Energy Projects: Land acquisition is essential for the development of power plants, renewable energy projects, and other energy-related initiatives. 
  • Several hydroelectric power projects, such as the Tehri Dam in Uttarakhand, Sardar Sarovar Dam in Gujarat, and Bhakra-Nangal Dam in Himachal Pradesh, have required substantial land acquisition for the construction of dams, reservoirs, and power generation infrastructure.

What are the challenges of land acquisition in India?

• Lack of Support to Private Firms: Most countries have an ‘eminent domain’ policy for the state to take over land needed for a public purpose but private firms cannot expect the same privilege. 
  • Private firms need to strike their own bargains with multiple owners which makes them vulnerable to ransom demands.
  • Eminent Domain: State’s power to acquire private property against the consent of the owner for a ‘public purpose’. The taking should be under a valid law, the land owner must be paid just compensation and the acquisition of the property should only be for public purposes.
• Land Deprivation: Land ownership and control have been central to India’s social structure and have been a source of power, wealth, and social status.
  • India needs to industrialize as an economic necessity, but sentiments over land deprivation are easily evoked, even when compensations are far more than actual price. 
• Social Disorder: The process of land acquisition is often followed by protests and agitation due to multiple reasons ranging from environmental to political concern, often turning violent. 
  • For example, in 2007, protestors lost their lives to gunfire in Nandigram as farmers were being evicted for a chemical hub. 
  • The Narmada Bachao Andolan (NBA) was a mass movement that began in 1985 to protest against the lack of an appropriate resettlement and rehabilitation (R&R) policy.
• Overlapping Jurisdiction: Though land is a state subject, “acquisition and requisitioning of property” is in the concurrent list. Both Parliament and state legislatures can make laws on this subject. 
  • For example, Telangana brought drastic changes to subvert the procedure laid down by the LARR Act by eliminating the SIA for certain types of development projects, such as those in the infrastructure category.
• Politicization of Issue: Land acquisition issues are often exploited for political gain as opposition parties have used the discontent among affected communities to challenge the ruling parties. 
  • For example, the Nandigram dispute provided the Trinamool Congress (TMC) a poll-winning agenda.
• Ideological Clash: Land ownership has been a source of ideological conflict between capitalism and communism. 
  • Capitalism allows private ownership of land whereas communism favors its collective ownership with government intervention.
• Misuse of “Public Purpose”: The Supreme Court has expanded the definition of “public purpose” in decisions like Yamuna Expressway , and several such cases. The term is vague and ambiguous which leads to a high potential for its misuse which increases land disputes. 

Way Forward

• Digitalisation and Modernisation of land records are fundamentals of an efficient land market in India facilitating price discovery and quick transactions.
  • For example, through the SVAMITVA scheme the government is providing a ‘Record of Rights’ to the property owners. 
• Promotion of SEZs: Promoting export-oriented SEZ into broader hubs for enterprise can help private firms overcome the challenges of bulk land acquisition.
  • For instance, the Special Economic Zone (SEZ) Act of 2005 allows the government to transfer land acquired for public purposes to private companies for development.
  • Taking the Middle Path: Ensuring the twin objectives of farmer welfare along with expeditiously meeting the strategic and developmental needs of the country are fulfilled.
• Land Leasing over Acquisition: Alternative proposals to land acquisition is leasing the land from landowners for a certain lease period. Leasing land may also support sustainable project development since the lands need to be returned to the landowners at the end of the lease period.
• Ensuring Ease of Doing Business (EoDB): Efficient and fair land acquisition processes are essential for the EoDB improving the overall business environment in India. 
  • For instance, Gujarat is best in land-related interventions and online mechanisms for environment clearances.
• Promoting Land Pooling and Land Banks: Land pooling is a voluntary land acquisition strategy where landowners give their land to the government for development. After the development is complete, the land is returned to the original owners. 
  • Land bank is a repository of all industrial infrastructure-related information serving as a decision support system for investors.

Conclusion:

Strengthening the rehabilitation and resettlement measures for affected communities while ensuring sustainable livelihoods, adequate housing, and essential amenities with proper planning and execution of these measures are essential for successful land acquisition.

DOWNLOAD PDF