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Mainstream, VOL XLIX, No 46, November 5, 2011

Guiding Principles for Acquisition of Land by the Government

Tuesday 8 November 2011, by Syed Shahabuddin


The draft Land Acquisition Rehabilitation and Resettlement Bill 2011, introduced in the Lok Sabha on November 7, 2011, stands referred to the Parliamentary Standing Committee on Rural Development. The Committee invited views and suggestions from the public but gave such a short time that it was not possible for interested individuals or organisations to submit detailed memoranda to the Committee.

A first glance, however, shows that the draft Bill constitutes a great advance on the Act of 1884 and the two draft Bills which preceded it but could not be enacted. This Bill also meets many objections which have been raised from time to time by the civil society and taken forward. It will make land acquisition more democratic, subject to some extent to the consent of the landholders and relate it to their welfare.

However, it still suffers from some flaws which arise from basic conceptual contradictions on the question of sovereignty over land and ambiguity on the absolute authority of the state to acquire it. The purpose of this note is to highlight some of these flaws and their consequences.

It is essential to keep in mind that sovereignty resides in the people and not in the government and the government is expected by the people in a representative democracy to protect their interest and manage land on their behalf. A democratic government cannot act as an agent of a private person or an entrepreneur or a private company, national or foreign, in dealing with the landholders.

It is equally correct to remember that a growing economy and increasing population need development and urbanisation. Therefore land, which belongs to the people, may be acquired by the government but only for public purposes.

Since all development programmes cannot be executed by the government itself, the latter may, if necessary, employ the services of private companies for executing a development plan. The contract for such development projects should be finalised in a transparent manner so as to maximise the benefit to the people with minimum but attractive profit to the private companies which should be selected through competitive bids.

Land should not be acquired for a long period of time so that the owner does not lose the benefit of price rise. Land should therefore be acquired by the government to meet urgent national purpose, at best for a reasonable period, after project details are finalised. The concept of government acquisition for ‘control and hold’ creates a suspicion that the land will eventually be handed over by the government to private parties.

In a market economy private entrepreneurs are free to enter the market and purchase land directly from the landholder at mutually agreed price. The government may, however, be requested for updating survey and revenue records and provide such other details as the two parties may require. But the government should not take part in their negotiating with the landholder to bring down the price. Therefore, the term ‘requiring body’ should exclude private companies and be limited to the public sector.

Land already in the hands of the government may be allocated to a private company for serving as the site of a government project, on terms which should be determined by competition, if the number of interested parties is more than one.

Since the country has limited cultivable land, except in extreme circumstances the government should not acquire it either for its own use or for allocation to a private party. The draft Bill provides for limits of such acquisition for urban and rural areas.

Land used for religious purposes should be excluded or substituted as far as possible.

The question of the government acquiring land for a private party or at its request simply does not arise. Because such acquisition will ultimately mean allocation of legally acquired government land to a private party. However, in case the government wishes to enter into a partnership agreement with a private company, the land which belongs to the government should serve as its basic contribution to the equity of the joint venture and should be evaluated at the current market price and not the price the government paid to the original landholder, and with due safeguards. Public-private partnership should exclude foreign companies as partners except if they come as providers of technology or services for the project through the Indian partner.

Urbanisation projects specially relating to slum clearance should be executed by the government and not through allocation of slum areas to real estate developers. Also in all such cases the claims of those who are to be displaced for resettlement on a part of the developed area should have priority so that those who are displaced do not lose their means of livelihood. Land acquired by the government in urban areas should provide housing for low income groups and for middle income groups and not for the elite or high income groups. The latter can purchase land in accordance with the law and form cooperatives it they so like.

All infrastructure projects for which land is to be acquired by the government should be in the public sector.

For exploitation of mineral resources based on geological survey which shows commercial availability of mineral resources, the government should prepare a basic framework for a viable scheme for economic exploitation, and then invite private companies to make their offer and negotiate an agreement on a competitive basis. The memorandum of association signed by the government and private company should be in the public domain.

If the mineral-bearing area does not belong to the government but to the people living on it in isolated hamlets and villages, in forests overlying the area and living on its natural renewable products or land, the process of acquisition should involve explicit and free consent of the families affected, on terms for sharing income, compensation and resettlement, for alternative employment and for acquisition of new skills as required and for providing for technical training for gainful employment in consequent industrialisation.

In the context of the above, the draft Bill needs to be revived to clarify its basic application (Clause 2), Clause 3(o) in respect of infrastructure projects and Clauses 3(za)(i) to (vii) and 3(zb) which define public purpose

The Statement of Objects and Reasons of the Bill emphasises various safeguards in the Bill to ensure that the entire process is based on consent and not coercion. But the people are wary of official assessment of the social impact by nominated persons, rather than by a university or research body. Similarly people are wary of ‘open hearing’ of objections by the Collector, after he has already issued the notification for acquisition. This notification should be treated as preliminary, to be finalised only after the hearing. At the hearing, the affected people, who are largely illiterate and poor, are overawed by the police and bureaucracy. The Collector should allow participation by political activists, educated members of the civil society and local institutions for protecting the interests of the landholders and keep a watch on the proceedings and invite local legislators and representatives of national and State watchdog organisations.

The Bill bars the affected people from approaching the local civil court under Section 57 while they do not possess the means to approach the High Court or the Supreme Court. Justice would be more accessible if it is locally dispensed. Therefore, Section 57 should be deleted.

Facade of Safeguards

THE Statement of Objects and Reasons para 10 makes it appear that the real purpose of this Bill is to make land available to private companies through the good offices of the government, as well as creates the impression as if the government does not represent the people but private business. This conclusion is borne out by including in the Bill a lot of window-dressing, particularly in the case of exploitation of mineral resources which largely lie in the forest areas inhabited by the STs, that is, the advasis. The State Review Committee at the highest level should also include local MPs and MLAs and Chairmen of the State SC and Tribal Welfare Boards.

Another point is the provision of proforma approval by the gram sabhas. Firstly, the gram sabhas are largely dysfunctional and therefore their approval must be endorsed by the individual families whose land is to be acquired and also reviewed by the higher Panchayati Raj Institutions at the block and district levels.

Similarly the government scheme of acquisition of any area should be advertised effectively through both the electronic and print media. The most widely read newspapers in the area, including at least one in the local dialect, should be used for at least three insertions at weekly intervals.

Some definitions in Clause 3 need to be clarified. Clause 3(b) defines ‘affected areas’ without putting any limit on its exact location or area. It may mean an entire village, or panchayat, or parkhand, or even a whole town.

Sub para (d) defines agricultural land. It does not exclude all cultivable land.

Sub-Clause (g) defines ‘infrastructure projects’. It should be limited to projects initiated or to be executed by the government. More ominously, it includes ‘mining activities’ which may amount to mining concessions by the state to the private parties after seizing it from the owners.

Similarly the term ‘education and healthcare’ does not exclude exclusive facilities for the elite and the high income groups. A close reading indicates that the government in fact proposes to privatise many public facilities and services which are presently run by the government for the general public.

Under Clause 2(za) ‘public purpose’ has been defined explicitly to include all projects undertaken by the private sector to promote economic development.
Clause (zb)’s definition of ‘Requiring Body’, it has already been noted, clearly allows acquisition by the government for eventual transfer to the private company. In fact the government then acts as the agent of the corporate sector.

Chapter II Part A provides for Preliminary Investigation for Determination of Social Impact and Public Purposes. Since this excercise is totally in the hands of the government which has defined exclusive and commercial use as public purpose, the preliminary investigation will only serve to prepare the ground for the intended user. This should not happen.

Part B provides for appraisal of the Preliminary Report by an expert group. The experts, under Clause 7(2), are all to be nominated by the government instead of the appraisal being handed over to an independent or autonomous body, as already pointed out.

The chapter finally proposes the Government Committee to examine proposals for land acquisition exceeding 100 acres. But no reason is given for leaving out areas less than 100 acres. Perhaps it is meant to sneak in SEZs through the backdoor. This Committee should be a permanent and continuing body constituted to examine specific proposals as they come.

Chapter XIII Clause 95 of the Bill speaks of unutilised land to be transferred to the land bank after 10 years. The period should be shortened to five years and the land should be returned not to a land bank but to the former landholders or villagers from whom it was acquired, if they so desire.


IT is hoped that while deliberating over the Bill, the members of the Standing Committee as well as later the Members of Parliament shall take note of the points I have mentioned above to ensure that the democratic government does not reduce itself to act as an agent of private companies and draws a clear line of demarcation in the Act between public and private interest, and between public welfare and the benefit of the corporate sector. Under the present dispen-sation it is being openly said that promoting commerce and industry is in the national interest. It may well be so but the Act should not legitimise commercial profit over land and minerals which are finite and non-renewable assets of the people.

The author is an ex-MP, and the former editor of Muslim India.

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