Wednesday, 14 January 2015

What the land ordinance lacks

It does not provide adequate safeguards or punitive provisions for misuse or land grab in the guise of land acquisition.

The government, has recently passed an ordinance, for amending the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (the 2013 Act), in the hope of bolstering a sluggish economy.

A major change that the ordinance seeks is the inclusion of Chapter III A and Section 10A. Certain categories of projects will now be exempt from the application of Chapter II and III of the Act. To put it simply, whenever land is sought to be acquired, a social impact assessment study is to be carried out by the appropriate government, along with the concerned panchayat or municipal body. This is a Chapter II requirement. Chapter III lays down special conditions for safeguarding food security. According to this chapter, irrigated multi-crop land can be acquired only in exceptional circumstances.

Now, with the inclusion of Chapter IIIA, five new categories of projects, i.e. projects vital to national security; rural infrastructure, including electrification; affordable housing and housing for the poor; industrial corridors; Infrastructure and social projects, including projects under PPP where the land will continue to vest with the Government, the restrictions of Chapter II and III will no longer be applicable, even by private companies (inclusion of new proviso to Section 3). Undoubtedly, the process of acquisition will become more nimble, greatly reducing acquisition time. However, the expunction of the social impact assessment, even for the named categories, is a potential hotbed for unrest.

The ordinance has also removed ‘private hospitals’ and ‘private educational institutions’ from the list of exclusions in Clause 2(b)(ii), which means that land can now also be acquired for private hospitals and educational institutions, which were thus far excluded in the Act. Only “private hotels” remain in the list of exclusions.

What makes this amendment crucial is, that the inclusion of ‘private hospitals’ and ‘private educational institutions’ comes in Section 2 of the Act, where there is no requirement of the application of the ‘consent’ provisions. The impetus to healthcare and educational institutions seems obvious, but we can’t be oblivious to the potential misuse of this provision by private players. The Ordinance does not provide adequate safeguards or punitive provisions for misuse or land grab in the guise of acquisition of land, leaving landowners entirely at the hands of the government, to ensure that the power is properly exercised.

Under Section 101 of the Act, if the acquired land remained unutilised for a period of five years, the same would need to be returned back to the original owner. What appears to be an innocuous insertion of the wording “period specified for setting up of any project or for five years, whichever is later”, in reality, significantly dilutes Section 101. It now permits the acquirer to hold the land, without utilisation, until the tenure of the project. Surely, five years is sufficient time to utilise land, irrespective of the tenure of the project.

A welcome change has come in Section 105. Essentially, if acquisition is undertaken under 13 other legislations such as, the Atomic Energy Act, 1962, The Electricity Act, 2003 and The Railways Act, 1989, the provisions of the Act relating to determination of compensation; rehabilitation and resettlement and infrastructure amenities shall be applicable to all such acquisitions, bringing the much-needed uniformity in land acquisition.

The ordinance also has brought in some other changes. For instance, there will now be a requirement to seek prior sanction of the government before a court can take cognisance of any offence. This is not unusual, as many other legislations have similar requirements. The term “private company” has been replaced with “private entity” through the entire ordinance.

In a nutshell, there is a clear impetus to development in the ordinance. The fact is, India requires infrastructure. The fact is, land is required for development of infrastructure. The fact is, the state has the sovereign power to acquire land. But the fact also is that forcible acquisition leads to deprivation of the individual rights of citizens - may be not constitutional rights, but they are economic, social and emotional rights.

Also, the objectives of development and individual rights are not necessarily in conflict, particularly in current times. If the landowner, in addition, to being compensated for the price of land, also participated in the equity of the project as a whole, there would be a median, particularly, in cases where private parties were the acquirer. In such instances, the government should additionally stand guarantor to commitments made by the private entities to landowners. What the percentage of equity should be is a matter of detail that can be worked out by financial experts, keeping the peculiar factors in mind, including compensation already paid/payable.

The Gujarat model already exists on similar lines. A more balanced legislation on land acquisition needs to be developed, keeping the success and failures of that model in mind.

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