Ias 2010
Ias 2010
Ias 2010
FREQUENT and unrelenting protests against land acquisition seem to have compelled
political parties to take the issue seriously. The Centre has promised to introduce a
redrafted land acquisition Bill during the winter session of Parliament. As per official
pronouncements, the Bill will provide for higher compensation to the affected parties.
Besides, acquisition for private companies will be restricted to less than 30% of the total
land required for the project.
However, it will be naive to expect the above measures to solve many of the problems
resulting from misuse of the acquisition law. In the past, state governments have been
highly innovative in devising newer ways ever to subvert the law for political and private
gains. The prospective legislation must provide safeguards against misuses. Here, an
enquiry into the actual abuses can be helpful.
Excessive acquisitions for private companies and inadequate compensation have been the
primary causes behind the past protests against compulsory acquisition. However, courts
have been rectifying the latter problem to an extent. In most instances, the affected parties
have been resorting to litigation to seek higher compensation. On this count the judiciary
has been very sympathetic; generally, it has been increasing the compensation amount.
But, as far as the legitimacy of the acquisition per se is concerned, exceptions apart, the
judiciary has left the issue to the prudence of the executive. Left unrestrained, states have
ruthlessly violated not only the spirit but also the letter of the law, especially when it
came to acquiring land for companies.
Part VII of the existing Land Acquisition (Amendment) Act, 1984, provides rules for
acquisition for private companies. The company gets to own the acquired land. However,
sections 38-44 of this part impose several restrictions. For instance, there is no provision
for emergency acquisition. Besides, the company and the state government are required
to sign an agreement stating the purpose of acquisition. The agreement must specify the
terms on which general public will be entitled to use the company-provided services. The
objective behind these riders is to restrict the compulsory acquisition to limited activities
of companies from which public can benefit directly, such as school, hospitals, etc. These
stringent requirements notwithstanding, the states have acquired land for all sorts of
activities of companies, including ones that cannot even remotely serve any public
purpose. Moreover, in numerous instances, acquisition has been done using the
emergency clause. How have these blatant violations of the law been possible?
Generally, acquisitions for companies have been undertaken under Part II of the Act. This
part concerns acquisitions by government entities for public purpose. It does not impose
the above restrictions on acquisition for companies, but requires the compensation to be
paid out of public funds. In order to justify acquisition for companies under this part,
states have been contributing nominal amounts toward the cost of acquisition. Some
governments have gone to the extent of contributing just . 100! Due to such legal
ambiguities, states have been able to violate the law with impunity.
Companies clearly find it profitable to use the state machinery to acquire land at
subsidised rates; direct purchases from the owners, in contrast, are costlier and
timeconsuming. Indeed, the acquisition process stands captured by private interests of
companies and the decision-makers.
EVEN if the compensation rate is increased and acquisition for companies is restricted to
less than 30%, the law will remain vulnerable to several abuses. For instance, a state will
still be able to justify acquisition for company simply by declaring the project at hand to
be its joint venture with the company. Moreover, it can subsidise the company by
acquiring parcels that are costlier to buy through voluntary transactions.
Public-private partnerships have emerged as a new tool for misusing the law. Under these
partnerships, the government acquires land and retains de jure ownership rights over it.
The cost of acquisition is also borne out of the state exchequer. Nonetheless, de facto
control rights over land are passed on to the project company on the basis of long-term
and renewable lease. Ostensibly, partnerships are formed to provide infrastructure and
public services such as education and health. In reality, however, excess land is acquired
and the company is allowed to use a part of it for real estate projects — partnerships for
Delhi airport, and Yamuna and Ganga expressways are a few of the many cases in point.
So, the company gets the land it needs and that too without any cost!
Since the legal ownership of the land rests with the state, the acquisition, technically
speaking, is not for the company. Therefore, the above-mentioned limit on acquisition for
private companies, howsoever small, is irrelevant. An increase in compensation rate is
also of no avail here, since the cost of acquisition is borne not by the beneficiary
company, but by the taxpayer!
The new law must create strong incentives for companies to buy land directly from
owners. The following measures will be helpful. First, apart from enhancing
compensation, wherever possible, the affected people should be made stakeholders in the
project. Depending on the context, there are several ways of doing it. Second, whenever a
company is going to use the acquired land, the acquisition should be treated as
‘acquisition for company’, regardless of whether ownership of the land is to be
transferred to the company or not; whether the cost of acquisition is to be paid partly or
fully using public funds or not. Third, before acquiring land for a company, the
government should be required to publish project details such as details of total area to be
acquired, who will bear the cost of acquisition, how public will benefit from the project,
etc.
Finally, there is a need to set up an independent and representative land acquisition
regulatory authority. Approval from this authority should be a prerequisite for
acquisitions for companies as defined above. Any change in land use after acquisition
should also require its permission. Bestowed with suitable powers, along with checks and
balances, the authority should be able to enforce the letter and intent of the law.
(The author teaches at the Delhi
School of Economics)
Systemic collapse
Reform Town Planning And Governance
THE building collapse in east Delhi on Monday, which killed 67 and injured 80, is just
the latest in the series of such incidents that regularly maim life in urban India. These
point to multiple, systemic failures in governance, regulation and planning. We need to
urgently reform the urban housing market pan-India, step up the supply of real estate and
operationalise a system that shows zero tolerance for disregard of building and structural
specifications. The way ahead is sustained, proactive reform on the ground so that illegal
structures are not allowed to come up, especially in the inner lanes and periphery of our
fast-growing urban centres and towns. This calls for transparency in planning and
approvals, with the avowed objective of stepping up funds flow in a key sector where
there is a massive investment backlog. What’s required is structural audit and follow-
through of building safety, on an ongoing basis. Also warranted is a proactive policy for
new and additional construction, and specific mandate for prudential norms, complete
with clear-cut penalties if followed in the breach. In tandem, we need forward-looking
planning that envisages integrated townships and housing colonies so that residents need
to commute short distances or preferably even walk to work, entertainment and
recreation. In parallel, we need to revamp the market for urban real estate so as to shore
up the supply of affordable housing. The bottom line is that responsible housing also
necessitates people-centred town planning and participatory local governance.
It has emerged that the seven-storey structure, which was overcrowded with migrant
tenants, had been constructed in flagrant violation of building and municipal norms,
regulatory negligence probably purchased for a price. Such laxity is a recipe for disaster
in the country’s fast-urbanising scenario and cannot be allowed to continue. The solution
lies in reform of politics and governance, as with most other ills that plague our society.
The challenge must be taken up. Fast-growing India cannot afford to continue with the
politics of yesterday.