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LARR Bill

1. The Bill includes a requirement for consent of the land owners in some cases. Ifthe land is

acquired for use by a private company, 80% of land owners need to give consent. If

it is for use by a public private partnership (PPP), 70% of the land owners have to

agree to the acquisition. The rationale of having differential consent requirements based on

ownershipincluding the lack of any such requirement if the land is for the use of thegovernment or a public sector undertakingis not clear. Why should a land owner, who

is losing his land care, whether the intended project is to be executed by the government or a

private company?

2. It defines public purpose to include infrastructure projects (as defined by the finance

ministry, with some exclusions); projects related to agriculture, agro-processing and cold

storage; industrial corridors, mining activities, national investment and manufacturing zones;

government administered or aided educational and research institutions; sports, healthcare,

transport and space programmes. It also enables the government to include other

infrastructural facilities to this list after tabling a notification in Parliament. The

significant difference from the current Land Acquisition Act, 1894, is that land cannot be

acquired for use by companies unless they satisfy any of the above end-uses.

3. The Bill specifies that the compensation will be computed in the following manner. Three

factors are taken into account: the circle rate according to the Stamp Act; the average

of the top 50% of sale deeds registered in the vicinity in the previous three years;

the amount agreed upon, if any, in case of purchase by a private company or PPP.

The higher of these three amounts is multiplied by a factor, which varies from 1 in

urban areas to a number between 1 and 2 in rural areas, depending upon the distancefrom the urban centre. To this amount, the value of any fixed assets such as buildings, trees,

irrigation channels etc is added. Finally, this figure is doubled (as solatium, i.e.

compensation for the fact that the transaction was made with an unwilling seller).

The justification given for the multiplier ranging from 1 to 2 is that many transactions are

registered at a price significantly lower than the actual value in order to evade taxes

the moot question is whether such under-reporting is uniform across the country?

4. The Bill states that all persons who are affected by the project should be rehabilitated and

resettled (R&R). The R&R entitlements for each family includes a house, a one-time

allowance, and choice of(a) employment for one person in the project, (b) one-timepayment of R5 lakh, or (c) inflation adjusted annuity of R2,000 per month for 20

years. In addition, the resettlement areas should have infrastructure such as a school, post

office, roads, drainage, drinking water, etc.

5. The process has several steps. Every acquisition, regardless of size, needs a social impact

assessment, which will be reviewed by an expert committee, and evaluated by the

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state government. Then a preliminary notification will be issued, land records will be

updated, objections will be heard, rehabilitation and resettlement survey carried out,

and a final declaration of acquisition issued. The owners can then claim compensation,

the final award will be announced, and the possession of the land taken. The total time for

this process can last up to 50 months. The big question is whether this time frame

would hinder economic development and the viability of projects?

6. The Bill provides for an Authority to adjudicate disputes related to measurement of land,

compensation payable, R&R etc, with appeals to be heard by the High Court. There are

several restrictions on the land acquired. The purpose for which land is acquired cannot be

changed. If land is not used for five years, it would be transferred to a land bank or the

original owners. Transfer of ownership needs prior permission, and in case of transfer

in the first five years, 40% of capital gains have to be shared with the original

owners.