Land Acquisition Law in India: A Historical
Prespective
ISSN 2319-9725
Vikas Nandal
Research Scholar, Department of Sociology, M.D.University,
Rohtak
Abstract: Increasingly over the last few years there is a clamour for repealing or at least amending
the land acquisition law in India. In India, the Land Acquisition Act, 1894 gives the right for
Government authorities to acquire parcels of land for the implementation of development projects.
The act is criticized as it give the Government Powers to acquire land forcibly without sufficiently
looking into the sentiments, emotions of its owners attached to the land. Also, the compensation paid
to the persons interested is nowhere near the price that the owners could have actually received for
their piece of land. Another issue is the ambiguous way that “public purpose “is defined under the
law. This gives the government powers to acquire land for any purpose including private companies.
This paper seek to know the in-depth knowledge of the land acquisition process, in the Land
Acquisition Act, 1894, key issues and proposed amendments in Land Acquisition Rehabilitation and
Resettlement (LARR) Bill 2011which attempt at ‘balance’ within the larger political context of land
acquisition in India.
Keywords: Land Acquisition, India, Law, Amendment, Policy, Issues.
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1. Introduction:
History lends perspective, even as, and perhaps because, it repeats itself. Land Acquisition
Law, whether in 2011 or in 1894, are but links in the long chain of institutional arrangements
and conveniences, to address the specific issues of the day. Some of the have not gone away
in a century and a half. In India the system of keeping records of cultivable land by the state
for the purpose of revenue collection originated in Pre-Colonial period, while systematic
legal and administrative machinery for acquiring land from private owners developed during
the colonial regime. The all-embracing nature of the colonial state power found one of its
successful expressions through the Land Acquisition in India under the Bengal Regulation
Act (I) of 1824, enacted to promote British commercial interests in the country. The
succession of some land mark events, which led to the enactment of this enabling piece of
legislation showed a consolidation of British colonial power in the Indian subcontinent. This
consolidation of the colonial power was not only a political phenomenon, but it also ushered
in a chain of technological as well as economic events which needed a well-organized legal
and bureaucratic structure. In 1820, Coal mining in Raniganj (West Bengal) and extensive
irrigation network started in North India. After this the Bengal Regulation Act (I) is replaced
by Act (I) of 1850, the Act XXII of 1863, the Act X of 1870, the Bombay Act No. XXVIII
of 1839, the Bombay Act No. XVII of 1850, the Madras Act No. XX of 1852 Madras Act
No.1 of 1854 X of 1861, the Act VI of 1857-all enacted by the colonial administration to
facilitate the easy acquisition of land and other immovable properties for roads, canals and
other ‗public purposes‘ with compensation to be determined by specially appointed
arbitrators without any legal problems. The construction of the first Indian steamship, coffee
and tea plantations in Mysore and Assam started by the late 1830s.
By 1857, various laws on the subject of land acquisition were consolidated as Act IV
applicable to the whole of British India. Till 1880‘s, the first telegraph line, railways, modern
cotton and jute mills were established. This period also witnessed the first legislation, which
curtailed the access of the local people to forests and mechanised mining as well as growth of
manufacturing sector of the economy. In 1893, the first Indian Petroleum Refinery was
established and finally, the Land Acquisition Act of March 1894 replaced all previous laws
relating to land was enacted for acquiring privately owned land by the state for public
purposes. The succession of events which led to the enactment of the enactment of this Act
clearly showed that it was need of the time. Mining, plantation, establishment of railway
lines, manufacturing industries, beginning of major irrigation works and road building all
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needed land which again was already under various forms of state controlled and customary
tenurial systems that existed from the pre-colonial period. This enabling Act empowered the
state to acquire any privately owned as well as common property Land for public purpose.
The key concerns of the colonial legislators were quite evident. The state had to be enabled to
acquire land swiftly while minimizing compensation payment, seen as a drain on the state
exchequer. Further, there was a need for mobilizing larger amounts of land for expanding
railways in the country. The imperial stance was evident in one simple fact: ‗public purpose‘
was neither defined nor elaborated by the law; it was sufficient for the state to declare it to be
so. Intricate and elaborate rules were framed to keep compensation payments to a minimum.
This Act made the collector‘s award of compensation final unless alerted by a decree of the
Civil Court in a regular suit and it helped speed up the process of determining compensation
(Kannan Kasturi, 2007).
Little surprise then, that none of these legislation had provided for an opportunity to object to
the acquisition of land itself, while nevertheless allowing the opportunity to raise issues
regarding compensation. The Land Acquisition Act of 1894, meant to bring some uniformity
to the acquisition decisions of the Empire, now that it had consolidated its hold since 1857. It
means to ‗amend the law for the acquisition of land for public purposes and for companies
and to determine the amount of compensation to be made on account of such acquisition.
This meant a single law to control a single administration, one that also helped derive
‗legitimacy‘ for the administrative foundations of empire. In a predominantly agricultural
landscape, such a law also provided a basis to generate revenue from the productive uses of
land.
It was only in 1923, after the Non-Cooperation movement, and after Indian leaders entered
Local Administration through elections, that the amendment of Section 5A to the 1894 Act
was introduced: one that allowed the possibility of raising objections, albeit with a warning
on its limitations. The Statement of objects and Reasons contained in Bill No. 29 of 1923
stated that the Act did not provide that persons having an interest in the specific land had a
right to object to such acquisition; the Government too was not duty bound to enquire into
and consider such objection. Instead the amendment was supposed to be a check on the local
government, by prohibiting the declaration of any such acquisition for public purposes, until
objections were ‗considered‘ by the local government. In other words, the idea of objection
was introduced while leaving open the possibilities for interpretation of such objection, and
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more significantly, in a manner that did not obstruct the land acquisition itself.The end of
colonial rule in 1947 and the Republican Constitution of 1950 did not bring about any
significant change in the land acquisition law. The Constitution of India, by Article 372,
allowed all colonial laws to remain in force unless they were explicitly repealed.
2. Meaning Of Land Acquisition:
The Land Acquisition Act of 1894 is a law in India that allows the government to acquire
private land in the country.
―Land Acquisition‖ literally means acquiring of land for some public purpose by
government/government agency, as authorized by the law, from the individual landowner(s)
after paying a government fixed compensation in lieu of losses incurred by land owner(s) due
to surrendering of his/their land to the concerned government agency.
3. Basic Features Of Land Acquisition Act:
According to the Land Acquisition Act, the state can exercise its right of eminent domain
wherein it is the ultimate owner of all Land, which it can acquire for public purpose after
paying full compensations calculated on the basis of market value. Despite several
amendments of the Act after Independence, the two basic principles of Land acquisition, viz
(1) public purpose, and (2) compensation on market value remain unchanged. The various
criticisms of Land Acquisition Act in India have also centered round these two cardinal
principles. One of the major criticisms of the Land Acquisition Act is that the expression
―public purpose‖ is nowhere defined in the Act and in India the courts do not have the power
to decide whether the purpose behind a particular acquisition was a public purpose. The court
can only direct the collector to hear the objections of a person who‘s Land has been acquired,
but the collector may not always listen to the objection raised by the legal owner of the Land.
4. Process And Steps Under Land Acquisition Act 1894:
In India, eminent domain powers are exercised by the state mainly through the Land
Acquisition Act, 1894. The Act, describes the processes that have to be used by the state to
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acquire land for either itself or for a company. Although the Central Government broadly
determines the contents of the law, there can be regional variations in procedural matters.
Land Acquisition is a process that every country goes through as it marches on the path of
development. Land being a scarce resource, has traditionally always had various power
holders claiming ownership. A set of rules, thus provided a convenient settlement for such
disputes. Unfortunately for India it was made by a group of colonial minds; the Britishers
who did not really care for the natives. The resulting law did not really fully compensate the
people who were having their land taken away for ‗the greater good‘. People found their land
being taken away in what they perceived was a very brutal manner. The law being talked
about was passed in 1894. And was last amended in 1984. 117 years hence, the situation has
not improved much.
As per the 1894 Act, land can be acquired under either Part-II or Part VII of the Act—
procedures laid out under these two parts are somewhat different as shown by the following
discussion. While the former is used when the acquiring body is the Central or state
government or companies that are either owned, partly owned or controlled by the State, the
latter is used in case of non-government companies. It may also be noted that while land
acquisition under Part II is entirely for ‗public purpose‘, acquisition under Part II can be for
both ‗public purpose‘ and ‗non-public purpose‘, although the scope for ‗non-public purpose‘
is very limited The details of processes under these two routes are given below:
5. Land Acquisition Under Part II:
In this regard the process of acquisition involves the following sequential steps.
5.1. Step 1: Notification:
The process for land acquisition begins with the issuance of a preliminary notification u/s
4(1) of the Act. The notification must be published in the Official Gazette and two daily local
newspapers. There must also be a public notice of the substance of the notification at
convenient places in the locality. The notification says that ‗land in one or more village(s) is
(or may be) needed in the foreseeable future for a public purpose (or for a company)‘. This
notice:
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i. Makes it lawful for an authorized officer to enter and survey the land specified in the
notice without the owner‘s permission;
ii. alerts the landowner that he should not invest any money or labour on any
improvements to his land without the collector‘s consent; and
iii. Informs the public not to acquire any interest in such land.
Typically, the landowner continues to hold the land for a long time beyond this notification,
but this notice prevents him from making full use of his land and getting an appropriate
return.
5.2. Step 2: Filing Of Objections:
Owners and other people who have certain interests in the land are then required to file their
objections, if any, against this notice within 30 days. These objections have to be submitted to
the collector and every ‗objector‘ gets an opportunity of being heard by the Collector.
Objections are typically made on the following grounds:
i. the purpose for which land is sought to be acquired is not a public purpose;
ii. the land in question is not suitable for the stated purpose;
iii. more land is being acquired than what is necessary for the proposed project;
iv. an alternative piece of land could be acquired which would cause less (or no)
inconvenience to people; and
v. The land contains historic monuments, places of public interest, religious buildings,
tombs, graveyards, etc. and hence it should not be acquired.
After hearing all objections, the Collector submits are port to the appropriate government in
respect of the notified land containing his recommendations on the objections and the records
of the proceedings held by him. The government then takes a decision regarding the proposed
acquisition based on the report submitted by the Collector.
5.3. Step 3: Declaration:
Based on the decision of the government, a declaration is issued u/s 6(1), which becomes
conclusive evidence that land is needed for public purpose (or for a company) and that the
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government can go ahead with the acquisition process. The declaration must be given the
same publicity as the preliminary notification. The Act requires that such declaration should
be issued within a period of one year from the date of issuance of preliminary notification
(The Land Acquisition Act, 1894 (as modified up to 1 September 1985), Government of
India, Ministry of Law and Justice, New Delhi).
5.4. Step 4: Notice To Interested Parties:
After the declaration, the notified land is marked out, measured, and planned as per Sec. 7
and 8 of the Act. The Collector informs the landowners about the government‘s intention to
take possession of their land and invites claims from all interested parties to compensation by
sending them a notice u/s 9(1). Interested parties can submit their objections regarding
measurements and value of land to the Collector.
5.5. Step 5: Enquiry And Award:
Under Sec. 11, an enquiry is conducted by the Collector regarding the objections submitted
by the interested parties as per Step 4 above. On completion of this enquiry, an award is
made, stating (i) area of the land, (ii) compensation payable, and (iii) its apportionment
among all the interested persons. No award can be made by the Collector without prior
approval by the appropriate government. The award should be made within twoyears4 from
the date of publication of the declaration (under Sec. 6), else the acquisition proceedings
lapse.
A landowner can object to the award regarding the measurement of land, amount of
compensation, the persons to whom it is payable and its apportionment by filing a written
application to the Collector, who shall refer the matter to the court. The landowner cannot file
a suit in the ordinary civil courts to establish his claim. The only course of option available to
him is to seek a reference to the District Court from the Collector. To retain their rights to
challenge the quantum of compensation in court, the landowners must receive the
compensation money ‗under protest‘.
5.6. Step 6: Possession:
After passing the award, the competent authority may take possession of the land
immediately upon paying or offering to pay the compensation. The land then vests absolutely
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with the government, free from all encumbrances, whatsoever. The transfer of title is delayed
till possession is taken by the government.
5.7. Step 7: Compensation:
The Act provides that the compensation should be based on the market value of land on the
date of the preliminary notification. The payment of compensation can be delayed beyond the
date on which possession of land is taken. As a protection against delay in compensation, an
interest of12 per cent per annum is also given. Additionally, in view of the compulsory nature
of the acquisition, a solatium equivalent to 30 per cent of the market value is also provided
for.
6. Acquisition In Emergency:
Sec. 17 of the Act confers special powers to the acquiring authority when land has to be
acquired in cases of urgency, by virtue of which the Collector can take possession of the land
without even giving away the award. The government has complete authority to define a
situation as ‗urgent‘ and invoke the urgency clause to acquire land. The process for such a
scenario is same as the process described above, with the following exceptions:
i. The government can dispense with Sec. 5 (A) which requires the Collector to hear
objections of landowners against the notification published u/s 4(1). In other words,
the declaration u/s 6(1) can technically be passed immediately after the preliminary
notification u/s 4(1);
ii. Upon expiry of 15 days from the notice u/s 9(1), the Collector can take possession of
the land. It may be noted that the Collector can take possession of land even before
giving away the award; and
7. Land Acquisition Under Part VII:
As stated earlier, under Part VII, land can be acquired for non-government companies. To
access this route, a company has to pay the entire amount of compensation for the land it
seeks to acquire (The Supreme Court judgment in the Devinder Singh vs State of Punjab
case, dated 12 October 2007 in C.A No. 4843 and 4844 of 2007).In contrast; Part II of the
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Act can be invoked if the compensation is funded wholly or partly from public revenues or
some fund controlled or managed by a local authority.
For Part VII purposes, the term ‗Company‘ includes companies (as defined by the Companies
Act, 1956), societies (registered under the Societies Registration Act, 1860), cooperative
societies and industrial concerns owned individually or as a partnership.
Acquisition under Part VII can be for the following purposes:
i. for erecting dwelling houses for workmen or for providing amenities connected with
such dwelling houses ( This is the only ‗non-public‘ purpose for which land can be
acquired in the entire Act), and
ii. construction of some building or work for a company, which is engaged or is taking
steps for engaging itself in any industry or work, which is for a public purpose or is
likely to prove useful to the public.
Although the steps involved in acquisition of land under Part VII are similar to that in Part II,
there are two major exceptions which make the former part significantly more cumbersome
than the latter. These exceptions relate to the company (i) getting appropriate government‘s
consent and (ii) entering into an agreement with the same government before issuing the
declaration u/s 6(1). To give its consent, the government must be satisfied on a number of
counts, including that :( Vaswani et al., 1997)
i. the company has made reasonable efforts to buy land through negotiations with the
owners offering to pay a reasonable price and that such efforts have failed;
ii. the land in question is suitable for the purpose for which it is sought and the area to be
acquired is not excessive; and
iii. The company is in a position to utilize the land speedily and efficiently.
8. The Agreement Between A Company And The Government Must Include:
i. terms regarding the payment of the cost of the acquisition of land to the appropriate
government;
ii. terms regarding transfer of land to the company on such payment; and
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iii. Terms on which the land shall be held by the company.
It may be noted that private sector companies can also acquire land under the urgency
provision. Of course, such acquisitions can only be made for a ‗Public Purpose.‘
9. Major Drawbacks Of The Land Acquisition Act, 1894:
9.1. Rights Of The Land Owners (Only):
One of the biggest problems with the land acquisition act is that it only recognizes the right of
the land owners. While this is (somewhat) reassuring for the landowners, it‘s unsympathic for
the people who earnlivelihood from the land. While a landowner loses a lot when his land is
taken away from him, the loss of the laborers working on the land also is something that
should not be overlooked. Considering the fact that agriculture is a field where more than half
of the workforce is employed in agriculture is rampant getting a new job would be difficult.
Also often generations of labourers are employed in the same farm, and hence they learn few
new skills, making employment even more difficult once they are ousted from their land and
the sole source of employment.
9.2. Definition Of Public Purpose:
The Land Acquisition Act encompasses the sovereign right of the Government to take over
parcels of Land for public purpose. The definition of ‗public purpose‘ is hazy at best in the
land Acquisition Act. Considering the fact that the government can acquire for ‗public
purpose‘, the definition of the same is crucial in trying to ward off unjust usurpation of Land.
However, the biggest weakness in the bill is that the definition is very broad. The expression
of ‗public purpose‘ includes
i. The provision of village-sites, or the extension, planned development or improvement
of existing village sites;
ii. The provision of land for town or rural planning;
iii. The provision of land for planned development of land from public funds in
pursuance of any scheme or policy of government and subsequent diposal thereof in
whole or in part by lease. Assignment or outright sale with the object of security
further development as planned.
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9.3. Calculation Of Compensation:
The principal issue in land acquisition by the Government is the compensation cost it
engenders. The LAA, 1894 provides that the compensation for land is to be based on its
market value. However, the Act does not specify any guidelines for the assessing officer (viz.
the Collector) to assess this market value. It is often alleged that the assessing officer
undervalues the land and the poor landowner ends up subsidizing the acquirer. The
compensation price as directed by the Supreme Court ruled in April 2012 that Government
shall increase this value to the highest market price of the land, on the basis that someone
who is forced to sell his land should be able to claim a higher compensation than what a
similar land owner would receive if he was willing to sell his property. Consequently,
acquiring land for development is likely to become more and more costly. Moreover,
rehabilitation and resettlement policy for displaced people imply, among other means,
allotment of Government land, grant for house construction and substantives allowances,
which are adding to the gross cost of land acquisition. Finally, the social cost of land
acquisition cannot be disregarded. It encompasses issue such as loss of employment, as well
as social surrounding and emotional trauma (Dhru, 2010).
It has been noticed that in most cases rehabilitation and resettlement aspects that should
follow land acquisition are often neglected., leaving the displaced population suffer the
consequences of being uprooted from their land. These negative effects include: landlessness,
homelessness, joblessness and marginalization (Saxena, 2011). Another worrisome aspect in
land acquisition is that expropriated owners realize they are often better off refusing to give
up their land, given the increasing pressure on land and thus, its increasing value over the
time.
10. Amendments In Land Acquisition Law:
Before land acquisition was amended in 1984, the ownership of the land was acquired was of
public interest. Since 1984, however, the land ownership could not only be the Government
but also a ‗company‘, opening the possibility of projects aiming at other objectives. In
addition, only the amount of compensation for the land could be debated but not the term
―public purpose‖. The case of India is particular in that sense, as in other democratic nations
this purpose can be challenged to Court, and lead to the nullification of compulsory
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acquisitions (Morris and Pandey, 2007). It appears indeed that the definition of ―public
purpose‖ is inclusive and too wide, and thus can be used to serve the interest of only a portion
of the community, rather than benefits the whole society (Dhru, 2010).
11. The Land Acquisition Rehabilitation And Resettlement Bill 2011:
The Land Acquisition Act 1894 does not mandate compensation and rehabilitation of the
people affected by acquisition of their land. Thus the Government announced the national
Policy on Resettlement and Rehabilitation in 2003. The Act came into force with effect on
February 204. Subsequently, the government on October 2007 announced the revised
National Resettlement and rehabilitation Policy 2007. Unfortunately however, with the
dissolution of the 14thLokSabha for the formation of the new government, the bill lapsed. On
September 7, 2011, anambitious initiative was put forward by Jairam Prakash as he tried to
combine the two acts (Land Acquisition and Rehabilitation and Resettlement Bill, 2011.The
Bill proposes a unified legislation for acquisition of land and adequate rehabilitation
mechanisms for all affected persons and replaces the Land Acquisition Act, 1894.
The provisions of this Bill shall not apply to 16 existinglegislations that provide for land
acquisition. These include The Atomic Energy Act, 1962, The National Highways Act, 1956,
SEZ Act, 2005, Land Acquisition (Mines) Act, 1885, The Railways Act, 1989.
12. Key Features:
The Bill specifies provisions for land acquisition as well as Rehabilitation and
Resettlement(R&R). Some of the major changes from the current provisions are related to:
(a) the process of land acquisition; (b) Rights of the people displaced by the acquisition; (c)
Method of calculating compensation; and (d) Requirement of R&R for all acquisitions. Let‘s
see some of the major changes:
i.
The provisions of the Bill relating to land acquisition, rehabilitation and resettlement
shall be applicable in cases when the appropriate government acquires land, (a) for its
own use and control, (b) to transfer it for the use of private companies for public
purpose, and (c) on the request of private companies for immediate use for public
purpose.
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ii.
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The Bill proposes that private companies shall provide for rehabilitation and
resettlement if they purchase or acquire land, through private negotiations, equal to or
more than100 acres in rural areas and 50 acres in urban areas. In addition, if such
companies request the appropriate government to acquire part of an area for public
purpose, they shall be liable for rehabilitation and resettlement of the affected persons,
for the area acquired by the government, as well as the land purchased previously
through private negotiations.
iii.
The term ‗public purpose‘ in the Bill includes provision of land for, (a) strategic
defence purposes and national security, (b) roads, railways, highways, and ports, built
by government and public sector enterprises (c) project affected people, (d) planned
development or improvement of villages, and (e) residential purposes for the poor and
landless. Public purpose includes other government projects which benefit the public
as well as provision ofpublic goods and services by private companies or public
private partnerships; these require the consent of 80 percent of project affected
people. Affected families include those whose livelihood may be affected due to the
acquisition, and includes landless labourers and artisans.
iv.
A maximum of five per cent of irrigated multi-cropped land may be acquired in a
district, with certain conditions.
v.
Every acquisition requires a Social Impact Assessment (SIA) by an independent body
followed by a preliminary notification and a final award by the District Collector.
vi.
In the case of urgency, the Bill proposes that the appropriate government shall
acquire the land after 30days from the date of the issue of the notification (without
SIA). This clause may be used only for defence, national security, and conditions
arising out of a national calamity.
vii.
The compensation for the land acquired shall based on the higher of (a) the minimum
land value, specified in the Indian Stamp Act, 1899 for the registration of sale deeds;
and (b) the average sale price of the higher priced 50% of all sale deeds registered in
the previous 3 years for similar type of land situated in the vicinity. This amount is
further doubled in case of rural areas. The value of the assets (trees, plants, buildings
etc.) attached to the land being acquired will be added to this amount. This total
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amount will then be multiplied by two to get the final compensation amount; in case
of the urgency clause, this multiplication factor will be 2.75.
viii.
The Bill proposes the following authorities; Administrator; Commissioner for
Rehabilitation and Resettlement; Rehabilitation and Resettlement Committee(for
acquisition of 100 acres or more of land); National Monitoring Committee for
Rehabilitation and Resettlement; and Land Acquisition, Rehabilitation and
Resettlement Authority (which shall adjudicate all disputes, with appeal to the High
Court).
ix.
If an acquired land which is transferred to a person for a consideration, is left
unutilised for a period of 10 years from the date it was acquired, it shall be returned to
the Land Bank or the appropriate government.
x.
The Bill proposes that in cases where the ownership of an acquired land is sold to any
person, without any development made, 20 per cent of the profit made shall be shared
among all the persons from whom the land was acquired.
13. Conclusion:
In the process of Land Acquisition, it is important to strike a balance between the need for
land for developmental activities and the need to protect the interests of those impacted by
the acquisition of the land—landowners, tenants, landless labourers, and other others whose
livelihoods depend on the land. And this can be done only by exercising some political will.
The land Acquisition Act was passed in 1894. The last amendment was made in 1984. The
Land Acquisition and the Rehabilitation and Resettlement bill 2011isan excellent piece of
legislation that can be a powerful tool in solving the‘ land issue‘ if brainstormed over and a
few clauses amended as a result.
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References
1. Dhru, Kelly A. (2010). Acquisition of land for ‗development‘ projects in India: The
Road Ahead. Research Foundation for Governance: in India.
2. Morris, Sebastian. and Pandey, Ajay. (2007). Towards Reform of Land Acquisition
Framework in India. Economic and Political Weekly, 2 June, Vol 42, No. 22.
3. Saxena, K. B. (2011). Rehabilitation and resettlement of displaced persons. Chapter
three in Development –Induced Displacement, Rehabilitation and Resettlement in
India. Routledge Contemporary South Asia.
4. PRS Legislative Research. (2012)The land Acquisition, Rehabilitation and
Resettlement
Bill,
2011
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2012
at
http://
www.prsindia.org/bulltrack/theland-acquisition-rehabilitation-and-resettlement-bill2011-1978.
5. Vaswani, K., V. Dhagamwar, and E. Thukral. (1997). The Land Acquisition Act and
You, Multiple Action Research Group (MARG), Delhi.
6. India Infrastructure Report 2009.
7. The Land Acquisition Act, 1894, Government of India.
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