The new Land Acquisition Act, 2013 rejects the facile notion that the private sector always acts in private interest.
Despite stiff opposition from certain political parties, the Act contains special provisions for the acquisition of land by the government on behalf of the private sector.
That being said, the Act clearly delineates the goals and limits of such acquisition in a bid to prevent the exploitation of land owners for the promotion of parochial interests of private sector entities.
While the primary focus of the Act is to adequately address the genuine concerns of those who were treated cavalierly in accordance with the 1894 Act, it also makes it abundantly clear that the government must work towards promoting industrialization and infrastructural development – a goal which cannot be realized sans the private sector.
With the ever-increasing expansion of rural and urban areas through construction of, inter alia, new roads, railway lines and airports, it has become all the more necessary for the government to facilitate the acquisition of land by the private sector for ensuring robust growth across the socio-economic spectrum.
The right of the government to obtain private land for public purposes is known as eminent domain.
Let us now examine the specific circumstances in which the government can acquire land for the private sector.
Acquisition for public purpose
The Act unequivocally states that the government can acquire land for the private sector only for projects that are designed to serve a public purpose.
The term ‘public purpose’ has been defined very capaciously, and the following types of projects would be included within its ambit:
- Projects for strategic purposes relating to naval, military, air force, and armed forces of the Union, including central paramilitary forces or any work vital
to national security or defence of India or State police or to the safety of the people;
- Infrastructure projects including:
- All activities or items listed in the notification of the Government of India in the Department of Economic Affairs (infrastructure section) dated 27th March 2012. Notably, private hospitals, private educational institutions and private hotels do not fall within the ambit of public purpose;
2. Projects involving agro-processing, supply of inputs to agriculture, warehousing, cold storage facilities, marketing infrastructure for agriculture and
allied activities such as dairy, fisheries, and meat processing owned by the appropriate Government or by a farmers’ cooperative or by a statutory institution;
3. Projects relating to industrial corridors or mining activities, national investment and manufacturing zones, as designated in the National Manufacturing Policy;
4. Projects for water harvesting and water conservation structures and sanitation;
5. Projects for Government administered and Government aided educational and research schemes or institutions;
6. Projects for sports, health care, tourism, transportation or space programmes;
7. Any other infrastructure facility as may be notified in this regard by the Central Government and tabled in Parliament.
C. Projects for project affected families;
D. Projects for housingfor such income groups, as may be specified from time to time by the appropriate Government;
E. Projects for planned development or the improvement of village sites or any site in urban areas or provision of land for residential purposes for
the weaker sections in rural and urban areas;
F. Projects for residential purposes to the poor or landless or to persons residing in areas affected by natural calamities, or to persons displaced or affected
by reason of the implementation of any scheme undertaken by the Government.
As the aforementioned definition is very wide, a private sector enterprise can ask for the assistance of the government in acquiring private land across a range of sectors.
Such transactions can be structured in the following 2 ways:
- After acquisition, the land can be transferred to a private company for a public purpose; or
- It can be acquired on the request of a private company for immediate use for a public purpose.
Requirement of consent
As the acquisition of land for the private sector is a highly contentious issue, the new Act carves out special provisions for regulating such acquisition.
Specifically, it stipulates that prior consent of 80% of affected families is mandatory for acquiring land for a private company. Similarly, consent of 70% of affected families must be obtained when land is to be acquired for a public-private partnership project.
This consent must be acquired in the prescribed manner.
While other requirements such as social impact assessment report, preliminary notification, issuance of public notice by the Collector, etc apply with equal force to land acquisition for government use or for use by the private sector, the requirement of consent comes into play only in the 2 aforementioned cases. The pro-poor and pro-farmer nature of this legislation finds expression in the strongest possible manner in this consent requirement.
Payment of rehabilitation and resettlement costs
When land is purchased by the private sector through private negotiations, rehabilitation and resettlement costs must be paid if the area of land acquired exceeds the limits set by the concerned state government. Such limits are to be determined by the state government after taking into consideration all relevant factors and circumstances that the state government deems worthy of consideration.
Moreover, Section 46 of the Act also imposes a duty on the entity purchasing the land to file an application with the District Collector containing the following information:
1. Intent to purchase land;
2. Purpose for which such purchase is being made;
3. Particulars of land to be purchased.
Interestingly, if a private entity purchases a portion of the land for a public purpose which exceeds the limits set by the concerned state government and asks the government to acquire the remaining portion of the land, the private entity will be required to pay rehabilitation and resettlement costs for the entire area i.e. the portion of the land purchased and the portion of the land acquired as a whole.
Advantages of this model
This new model, in accordance with which the government can acquire land for the private sector, seeks to streamline the process of land acquisition. In the 1894 Act, there were no separate provisions to regulate the acquisition of land for the private sector. As a result, the provisions in that act were often grossly misused by the government to promote the interests of the private sector.
This model has the following advantages:
First, it recognizes that it is the prerogative of the government to work closely with the private sector to usher in greater investment which is the sine qua non of infrastructural development.
Second, it legitimizes the role of the government as a facilitator for the acquisition of land for the private sector in pursuance of public objectives. It is hoped that this new model, with clearly defined goals and limits, will assuage the unease of those who have always frowned upon government assistance for the acquisition of land for the private sector.
Thirdly, and more fundamentally, this new model will make it easier for the private sector to circumvent the problems that India’s shoddy land record system poses. More specifically, it will allow the private sector to request the government to step in and acquire land on its behalf wherever the private sector determines that the title of any piece of land is unclear.
Finally, the Act unequivocally recognizes that it is simply impossible for a single company to negotiate with hundreds of farmers and collate the land and that the government is in the best position to do so when a public purpose is involved. This power of the government becomes all the more important when a specific piece of land is involved for purposes such as mineral extraction.
Disadvantages of this model
First, captains of industry have vehemently argued that the percentage of consent that is to be obtained for projects involving the private sector is unrealistically high. The new Act creates a framework, the argument goes, which allows individuals with vested interests to hold the process of acquisition hostage. These individuals can simply refuse to part with their land for no concrete reason and thereby create serious impediments in the path of industrialization.
Second, some thinkers believe that even though the term ‘public purpose’ has been defined capaciously, its validity has to be determined by multiple authorities on a case-to-case basis, and, therefore, many private sector projects may not receive government support for acquisition. They also argue that government intervention is indispensable, especially in the manufacturing sector, for ensuring proper acquisition of land. The absence of said intervention would have a negative impact on both land owners and industrialists.
At the opposite end of the spectrum, many social activists vociferously argue against any kind of acquisition of land for the private sector by the government. Viewed through this lens, land acquisition represents a desire of the government to help the rich at the expense of poor land owners.
Proponents of this line of reasoning cite the example of Singur where the government agreed, in July 2006, to acquire 1,000 acres of land for the Tata Nano Project against the wishes of farmers and other land owners in that area.
Conclusion
As the land market in India is fraught with imperfections and complexities, the government has to play a constructive and meaningful role for ensuring smoother acquisition of land.
Reducing the role of the government in the process of acquisition will not serve the interests of any stakeholder; it will only exacerbate existing problems.
As many industrialists have argued, the role of the government as per the new Act has to be assiduously reviewed. If such a review is to be effective, it must take into consideration the fact that large industrial projects in India cannot properly take off without active government support and encouragement.
